Within today’s connected, digital environment, bank executives realise that customer satisfaction standards must stack up not only to those of other firms providing financial services, but also with non-industry businesses that consistently keep consumers engaged, satisfied, and loyal.
These days, any organisation can leverage technology to create new customer delight benchmarks that influence the financial services paradigm and bank customers’ expectations.
According to the The World Retail Banking Report (WRBR) 2019 opening remarks from the authors the report examines the successful customer experience approaches of various innovators and breaks down the challenges faced by retail banks when it comes to customer experience. The observation is that banks have the right products, but they are lagging behind and giving ground to non-traditional players in the last-mile customer experience.
As popularised in supply chain management and logistics, last mile is what individuals experience and remember. In banking, a positive last-mile experience is the result of personalised product packaging and seamless interactions – connections between processes, internal departments, partners, channels, and product delivery.
Friction in banking interactions and less-than-robust omnichannel solutions drag user satisfaction metrics down, according to Capgemini’s Voice of the Customer 2019 survey of more than 8,000 consumers across 20 countries. Meanwhile, BigTechs and challenger banks are capturing the last mile of the banking value chain by swapping the conventional rule book for offerings designed around customer needs.
Now, more than ever, banks must integrate seamlessly into customers’ lives to meet demands for intuitive convenience. Open Banking can help banks to expedite this journey, but the survey finds that most banks have yet to drive open banking initiatives effectively. Before firms can harness the full potential of Open Banking, legacy stumbling blocks – siloed infrastructure and traditional mindsets – must be overcome.
Customers demand a more comprehensive and personalised banking experience, but banks struggle to deliver a delightful last-mile experience
- Positive customer experience perceptions are at a low level across various banking interactions and channels, making the availability of omnichannel engagement critical.
- New-age firms, the FinTechs and BigTechs, have raised the bar around expectations for Gen Y and tech-savvy customers, who want more from their banks when it comes to meeting individual financial preferences.
As BigTechs and challenger banks redefine the financial services paradigm with a customer-centric focus, they are capturing customer mindshare in the last mile
- More than half of customers are using or are likely to use BigTech or challenger bank solutions in the next three years in payments, cards, and retail banking accounts.
- It is becoming imperative for banks to address the last-mile challenge in banking by re-packaging the banking experience around the customer’s holistic financial wellness than discrete banking products.
Open banking will play a vital role in transforming the customer banking experience but is characterised by false starts and missed expectations
- While open banking can power banks’ ability to quickly provide innovative solutions that enhance the last-mile experience, less than a third of banking executives surveyed say implementation of open banking initiatives were effective and just 21% say they achieved desired results.
- An improved approach towards addressing the last mile challenge by leveraging the ecosystem is necessary to harness the full potential of open banking and to industrialise its benefits.
As the inevitable future-state Open X era approaches, banks need to overcome legacy mindsets and evolve as inventive banks to remain relevant
- Within the Open X ecosystem, winning banks and other players will need to shift mindsets from product to experience, compliance-only to data, ownership to shared access, and build/buy to partnership.
- Bolstering their collaborative capabilities at each of four critical pillars (People, Finance, Business, and Technology) – across all stages of collaboration – will be essential to ensure banks’ relevance in the Open X environment.
- As part of Capgemini’s Open X Collaboration Readiness Index, only a handful of banks have climbed to its North Star quadrant by acing preparedness across all pillars and leveraging collaborative relationships.
By strategically leveraging collaboration while also maximising traditional strongholds, banks can create a powerful advantage in the Open X era
- Banks can strategically choose partners that complement product portfolios, enhance service delivery, boost sales – and work collaboratively.
- Banks must lay the groundwork for collaboration readiness through commitment, change, and catalysing the shift to Open X.
- At the same time, they should look to maximise traditional incumbent strongholds such as regulatory compliance, omnichannel capabilities, and cross-product synergies that are difficult for new entrants to replicate.