Banking needs to find the right balance

Digital is sweeping across industries, and pushing senior decision makers to rethink how they operate in the new business landscape.

Banking needs to find the right balance

The financial industry is no exception, with the rise of online banking services creating a real change to the traditional banking model. Major banks reported that 90 per cent of customer contacts were through digital channels in 2016, up from 80 per cent the year before, and with this shift in consumer behaviour, many are being forced to close branches.[1] However, despite the surge in demand for online services, the majority of customers continue to desire face-to-face contact when making long-term financial decisions and large transactions, such as getting a mortgage.

Online banking is routine for most customers, with the majority of transactions and queries completed without any human interaction. In contrast with their fintech competitors who are building their service around this technology-first model, banks have the opportunity to stand out by leveraging their experience of face-to-face service.

In-person engagement between the customer and an advisor gives banks the opportunity to offer other value-adding services that reach beyond completing a specific account request. Digital should not seen as a means to replace these interactions, but should be utilised as a way to facilitate outstanding customer service and to make face-to-face services more efficient and sustainable for banks. Companies should look for next generation technology which empowers their advisors, encouraging a fruitful relationship between the customer and bank.   

As digitalisation continues to catalyse the closure of bank branches, banks should be acutely aware that even millennials – the so-called ‘digital natives’ – still desire the human touch when making a big financial decision. More than half of all millennials want mortgage advice face-to-face with just one in four indicating that they would use robo-advice.[2] Banks and financial services firms must now implement technology that will create a human-digital future for the industry. This begins with streamlining the current role and relationship between humans and digital innovations in order to improve efficiency and profit.

There are a wealth of simple digital solutions that create flexible and convenient services that are centred on human interaction, and which offer a more sustainable model than the increasingly cumbersome branch banking set-up. Adopting video chat, which allows bank employees to set up face-to-face calls directly with a customer at home, is the most straightforward way of exploiting a digital and human interfaced hybrid service. Virtual reality technologies are an excellent starting point in achieving the face-to-face interaction that the majority of customers crave, but this is not the final piece in the industry’s puzzle.

Retail banks need to look out for tools which rebalance the impact of technology towards the back rather than front-end of customer service.  This is not all about automating workflows or structuring data: it can also look quite different. Uber-like scheduling tools, for instance, help to restructure the way in which a bank’s employee network is organised.

These tools empower banks to manage an entire mobile workforce of advisers and customer assistants. Typically, these kind of systems are used for healthcare companies that provide services at home. Instead of using people onshore to call nurses once an appointment is booked, applications that use the Uber model track the process from start to finish, once a nurse has accepted the request. Similarly in the banking world, companies can quickly and efficiently assign individuals from their mobile network of advisors to carry out appointments with local customers at a location that is best suited to them. Using this scheduling system, companies can also respond to customer requests for face-to-face meetings almost immediately.   

The cost of providing out of hours service can be greatly reduced and logistics significantly improved. Providing that advisers are willing to adapt and adhere to customer based convenience, meeting them at a time and location that is convenient for them, they will quite literally change the face of banking services.

The role that technology plays in this industry must be focused on empowering human service with digital innovations, in order to provide stand-out services that are sustainable and cost-efficient, and that get the most out of employee expertise. If retail banks are willing to revise the underpinning rudiments of their business model, they can couple digital innovations with the attractiveness of in-person expertise long into the future.