The customer-centric evolution of consumer banking.

Our client-side partners are bravely battling all sorts of outside forces. From trying to meet high customer expectations, to defending traditional service offerings from ambitious startups, the services of established organizations are being challenged on all fronts.

This industry used to run on “banking hours”, opening from 9:30–4pm, with little service outside of those hours, protecting their customer’s hard earned money in physical locations, fraught with long line ups, and paperwork-heavy interactions. Today, most financial institutions are rethinking their purpose, shifting towards a customer centric model, and relying heavily on technology to find efficiencies in process and how they engage their consumers.

Challenges aside, it’s an exciting time for an industry that historically has been slow to adapt. For consumers, banking and financial experiences in general are starting to see a renaissance—they're improving, and consumers are raising their expectations as a result. For us on the design consultancy side, there are all sorts of exciting business problems to tackle, from how to use emerging services like voice and chatbots, to how machine learning can improve the services once provided exclusively by human financial advisors.

This past September, I attended the Global Digital Banking Conference in Toronto’s financial district. The conference was hosted by RFI Group with attendees mostly from large Canadian banks and FinTechs. The theme, “Winning the Customer of the Future,” addressed topics such as disruption in financial services, and understanding the state of trust and digital financial advice. We wrote this post to share what we learned at the conference.

New customer expectations

In the past, before digital banking, banks primarily focussed on strategically locating branches to provide services. It was about providing convenience. Today, banks understand that the smartphone is essentially the new branch. They recognize that there’s a big shift in how customers want to access and use financial services and the priority of physical branches is diminishing.

Some of the contributing factors include: the rise of mobile devices and social, an expanding younger and more digitally savvy demographic, and innovative FinTech offerings that are beginning to reach consumers. These new expectations represent a gap for banks in terms of technology and user experience. The most forward-thinking banks see these gaps as opportunities and, working within a highly regulated vertical, are aggressively addressing them by:

Embracing a customer-centric approach to offerings Adapting/replicating FinTech approaches Partnering with or acquiring FinTech Creating new agile teams (or labs) to incubate and test new ideas Upgrading legacy technology and creating APIs to integrate with modern systems Understanding and embracing technology advances that can help customers Leaning on digital agencies and consultancies to help with any and all of the above

A changing landscape

The financial services space continues to evolve as banks look to reduce costs. Many banks are looking to outsource portions of their service offerings to partners. For example, JPMorgan Chase recently extended their partnership with OnDeck, a small business lending company. The online lending product is Chase’s, but the underlying technology is provided by OnDeck. OnDeck’s technology makes it possible for customers to receive a loan decision in seconds and receive the funds as early as the next day.

Meanwhile, banks are starting to offer their services to third-party platforms. Financial platforms aggregate services from many providers helping customers see all of their options. Intuit’s Quickbooks service allows customers to compare loan offers from different financial institutions. This is great for customers, but it has the potential to make banks “just another provider.” Many believe that multi-provider platforms will become a primary channel for financial services.

Banks also face a threat from large technology firms. Ubiquitous platforms, such as Amazon’s Alexa, are entrenching themselves in the daily lives of customers. These platforms bring together many disparate services and provide a seamless customer-centric experience. While some banks provide Alexa support, this still relegates them to being "another provider." Who will become a platform and who will become a provider? Nobody knows yet, but providers will face stiff competition, and there will be only a handful of winners.

To fend off the large tech threat, banks are making a real effort to replicate these tech firm capabilities in house. This requires banks to work and operate in new ways, which can prove to be an incredibly difficult task in such a highly regulated space. It also requires an army of new resources from data and design to devops, creating a new battle for top talent.

Where to begin?

So, how do financial services firms move forward? How can legacy organizations invigorate internal teams to shift towards a culture of innovation? Internal innovation labs are becoming an asset for firms that have the resource bandwidth and leadership to explore and ship new product and service offerings alongside their core business. But even these teams tend to get bogged down with the broad needs of large scale financial services. And when innovation becomes a priority, what happens to the improvement needs of legacy systems? Let’s face it, product evolution and customer centric thinking doesn't always require ground up innovation thinking; sometimes it just takes new focus to “clean things up a bit.”

It’s difficult to get to that big picture view, but when you get it, the entire ecosystem comes into focus. This is when organizations begin to clearly understand the complete end-to-end customer experience. And herein lies the challenge that most organizations face – Many don't know where to focus because they don't yet have a clear understanding of the big picture, and some aren’t quite sure where to start.

To get there, consider two integrated tools and methods:

1 – CX Planning - as a primary tool in our toolkit, we look to research and customer journey mapping as a means to help teams understand how consumers engage with an organization and its offering across each stage of engagement. Remember, the customer doesn’t differentiate your brand across touchpoints. There is an assumption that all things are connected and all things are integrated. Moving from screen to screen, or from online to offline, means little to nothing to a consumer. The objective of undertaking a Customer Journey Mapping exercise is to understand the current state of the customer experience, highlight complexities, gaps, and roadblocks, and focus on areas to improve and possibly innovate.

2 – Roadmapping - with the insight gleaned from Journey Mapping, teams are put in a position to prioritize both the near-term and longer-term opportunities or issues that require resolution. Imagine a Journey Map that identifies a high percentage of your customers are unclear of next steps when registering for a new financial service. This in turn leads to a high abandonment rate for the service. Perhaps the solution is as simple as better messaging. Or perhaps it would be better to roll that service as a feature into another existing product. Of those two options, one is simpler and quicker, and could create an immediate uptick for minimal effort. That’s what we look to identify by first Journey Mapping, and then Roadmapping.

The future

We’re excited for the future of financial services. New products and services continue to come to market, helping invigorate an industry that until recently, was in need of new energy. As we continue to support our own global clients in the financial services space, we continue to see new opportunities to use technology and design to make improvements to the way our clients serve the needs of their customers.

Want to learn more about our financial services experience? Interested to understand how Customer Journey mapping can work for your Financial Services business? Get in touch, we'd love to hear from you.