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CX trends fintech and financial services firms can 'bank' on

Banking trends illustration

With the 2010s focused on earning customer loyalty, the 2020s will be about elevating the customer experience in the financial sector. A recent survey by Adobe found that 40% of financial services and insurance organizations cited keeping step with constantly evolving customer expectations and behavior as a key challenge, while 63% of financial services organizations placed customer experience (CX) at the top of their priority list.

Better CX delivery is being driven by the advancement of technology and its increased proliferation in the market. Innovations in artificial intelligence (AI), robotic process automation (RPA), and data analytics, as well as the sophistication of chatbots, voice technology and blockchain, are fostering a high-tech, high-touch CX atmosphere. Concurrently, cybersecurity and transparency have been driven to new peaks.

The intersection of these innovations will continue to propel the industry forward, says Ron Shevlin, author of the book Smarter Bank and managing director of fintech research at Cornerstone Advisors. “When talking about voice, AI, chatbots and personalization, there are definitely some things that are unique to each of those three circles, but I very much envision them as a Venn diagram that overlaps.”

The decade ahead is about much more than simply ‘keeping up’. For fintech and financial services firms, it will be about continually experimenting and innovating all aspects of their customer experience. And it all begins with understanding the trends.

Digital wallets will move to the fore

The evolution of CX expectations in other industries will continue to creep into the financial services realm. Take the loyalty industry for example: Having done away with plastic cards in favor of digital, consumers have gotten used to using mobile apps to complete transactions.

In 2020, $503 billion is expected to change hands through mobile payments in the U.S., according to a Business Insider forecast. Further, more than half (56%) of the U.S. population says it expects to use digital wallets. But a digital wallet will be more than just a storage device for loyalty cards and bank accounts.

“To me, the idea of the digital wallet is that it doesn’t just store the information. It provides some intelligence to help you make smart decisions at the point of interaction,” says Shevlin. “It’s a trajectory we’re only at the start of,” he adds.

Market sharing

On the whole, the same sharing economy model that disrupted the travel and transportation industries is poised to impact banking.

“By 2020, consumers will need banking services, but they may not turn to a bank to get them. Or, at least maybe not what we think of as a bank today,” writes PwC in its report Financial Services Technology 2020 and Beyond: Embracing disruption. Uber, for example, is building out financial services and products for drivers and customers via its Uber Money division. This will include everything from bank accounts and debit cards to a mobile banking app.

It’s not just the sharing economy companies that are inching into financial services. A throng of fintech newcomers and tech giants alike are offering services like robo-advising, payment transfers via social media and P2P lending to match providers with users of capital.

Rather than losing market share, financial institutions will likely capitalize on the up-welling by finding ways to reinvent the CX around borrowing, and partnering with investing upstarts.

Defining CX through personalization

The financial services sector — banking institutions in particular — has been looking for ways to use data to tackle customer needs on a more personal level for the past decade. According to analyst firm IDC, the banking sector is one of the top investors in Big Data and business analytics.

Data has helped drive marketing initiatives like customized offers. However, Shevlin sees the future of personalization in “the ability to have relevant conversations with customers appropriate to the type of relationship they have [with the company].”

Financial services firms will be able to create 360-degree profiles of consumers from the pool of client data made up of current products, call history, and customer analytics and deliver relevant experiences that allude to “hidden links.” That context will help personalize the experience.

“It could be a sales call with a real person, or it could be a completely automated process,” says Shevlin. Regardless of the channel, the interaction “will take different avenues and angles based on what the customer says and who the customer is and (adjust) the language and the tone and the content of the conversation [accordingly].”

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Automate and augment

As tasks related to loans, financial advice and teller services become automated and augmented by improvements in AI and machine learning, humans will be free to focus on the higher-value, personal touch elements of CX.

Robotic process automation will help banks slash the time it takes to tackle things like compliance, credit card applications and mortgage processing, making it almost immediate.

Shevlin notes that we’re nowhere near the point of removing the human element from these exchanges, but instead that advanced technology will help streamline what he calls “the hand-off” moment when the customer is transferred from human to machine, or vice versa.

Voice matters

The next decade will see the proliferation of conversational voice technology — specifically, its use to transfer funds and make deposits as a result of improved voice recognition.

“Everybody is very much focused on creating (apps) for voice interfaces like Siri, Alexa [and] connecting the devices to their banking infrastructure,” says Shevlin. According to Mercator, 67% of smart-speaker owners said they are comfortable using conversational interfaces for banking transactions.

Banks are already responding to the trend. Bank of America, for instance, launched an AI-empowered digital helper in mid-2019. Within six months it had six million users, doubling the bank’s daily client engagement. Voice is likely to play an even larger role in the decade ahead, says Shevlin.

Transparency is trust

The past 10 years have largely been spent grappling with cybersecurity and trying to keep up with the influx of new technology, analytics, personal data and the security concerns that it creates. Trust is a keystone in CX, which makes security a key component of any CX strategy conversations.

Where consumers used to wish for complete transparency about how their data is being used, in the future it will be expected. There is a growing consumer trend that shows consumers dealing exclusively with transparent companies. Shevlin says this will help drive the adoption of blockchain-type solutions as part of major financial services firms’ strategies. The technology could also help eliminate processing hiccups and lower transaction costs to further improve the overall CX.

For example: “As property titles become blockchain-ized, that’ll help speed the process by which your mortgage is determined,” says Shevlin. “It could help cut weeks of interaction into an immediate exchange.”

That said, Shevlin cautions not to get too excited about blockchain. “From a retail banking perspective to customer experience, we’re still 10 to 15 years out before we’re going to really start to see its impacts.”

The future

There’s no question that the “Age of CX” is in full swing. Between evolving client expectations, advancements in machine learning, RPA, AI, voice technology, data and personalization, the industry will look completely different by the end of the 2020s. While the future is never 100% certain, there is little doubt that these trends will provide exciting avenues for the financial sector to better connect with their customers.

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