How banks can lead from the front with digital

The value is high to banks of continually adapting their digital toolkits to remain competitive and deliver consistently positive customer experiences.

By Bill Staikos

The rapid emergence of technologies such as artificial intelligence has significantly influenced various aspects of the customer experience, including within the financial services landscape. The implications of AI are impacting customer expectations and the interactions they have with financial brands. And in today’s rapidly evolving digital landscape, banks need to continually adapt their digital toolkits to remain competitive and deliver consistently positive customer experiences.

To stay competitive in the ongoing digital race, banks should proactively determine what is or isn’t working and take actionable steps to enhance their offerings. Taking a journey-based approach to their products and services, coupled with employing human-centered design, or HCD, through the journey, will enable banks to gain a competitive edge.

Leveraging data, analytics and HCD

Artificial intelligence plays a central role in developing a customer-led culture, as the technology gives banks an opportunity to prioritize understanding their customers’ needs, preferences and pain points. By leveraging data analytics and AI, banks can gather valuable insights on customer behavior and tailor their digital tools to provide personalized experiences. Offering intuitive interfaces, simplified processes and personalized recommendations can greatly enhance customer satisfaction and engagement, moving beyond traditional feedback surveys. Banks need to aggregate signals captured from digital behavior, unsolicited feedback from social media as well as operational and financial insights, which AI can help with by aggregating and deriving insights from unstructured data.

Moreover, data analytics and AI capabilities, along with HCD, should be embedded in the product organization and their milestones. By surfacing customer needs, preferences and pain points in a product team’s workflow, they can develop better user stories, optimize their backlog to match customer priorities and improve measurement of their objectives and key results.

Once these foundational elements are in place, banks should look at the beginning of their customers’ journeys to identify opportunities to streamline onboarding and account management. Simplifying the onboarding process is crucial because banks can benefit from creating seamless digital experiences that enable customers to open accounts, complete necessary documentation and manage their finances easily. Implementing digital identity verification, e-signatures and automated document processing can also expedite onboarding and reduce friction for customers.

Building trust and security protocols for customers

Data security, and knowing what banks are doing with customer data, is foundational to building a relationship based on trust. With the increasing prevalence of digital transactions, ensuring robust security measures is paramount especially during the onboarding process, which sets the stage for future customer expectations.

Advanced cybersecurity technologies protect customer data and prevent fraudulent activities. Implementing multi-factor authentication, biometric verification and real-time transaction monitoring can enhance security while maintaining a seamless user experience. In turn, this can prompt customers to feel more comfortable when sharing sensitive information, positioning their banks as trusted partners who can safeguard their most pertinent details.

Artificial intelligence can also play a crucial role in understanding customer behavior patterns, and deviations from those patterns, to identify potential fraud within a business and looking across business lines. For example, a bank can stop a mortgage customer from inadvertently sending escrow funds to a fraudulent account by observing fund flows across silos within the same bank.

Driving connected experiences that give customers more control

AI-powered technologies such as chatbots and virtual assistants can revolutionize banking operations and customer experiences. These tools can provide instant customer support, answer queries and offer personalized recommendations, giving customers greater control over their interactions. Automation can also streamline routine processes, such as loan approvals and fraud detection, improving efficiency and reducing manual errors. AI-powered capabilities can offer global underwriting of credit whether that is for a new credit card, auto loan or mortgage; these highly personalized offers can deepen the relationship across products.

Banks can also empower customers with tools that provide insights into their financial health and help them make informed decisions. By leveraging data analytics, banks can offer personalized budgeting, savings and investment recommendations based on individual financial goals. This can foster long-term customer relationships and position banks as trusted financial advisors. AI-enabled tools can also identify when a customer is ready for the next stage in the relationship, bringing them from a purely retail relationship into wealth management, as an example.

Additionally, customers expect consistent experiences across various touchpoints, including mobile apps, websites and physical branches. Seamless integration and synchronization between different platforms allows customers to start transactions on one device and continue it on another, without any disruptions. This creates a unified customer experience and fosters loyalty. For example, a customer may start out in a chat via their bank’s app but realize they need to speak with someone instead. Banks shouldn’t make customers “channel switch” by prompting them to stop the chat and call into a contact center. Rather, banks can use tools that give customers the capability to switch seamlessly from the chat to making a call within the app.

However, innovative tools and capabilities should not be solely pointed toward the customer. Employees at the bank can also benefit greatly from AI-powered technologies, driving greater efficacy in their roles. A bank’s contact center agents can utilize AI to access “whisper coaching” tips in real-time while on the line with a customer, which could help them to slow their rate of speech or offer insights on how to defuse an escalation. Bankers can also have “next-best conversation” specifics delivered to their inbox in advance of a client meeting, leveraging insights uncovered by AI. This can drive greater personalization and help the banker be more efficient, focusing their time on more value-add activities.

Fostering core partnerships to remain digitally competitive

Another key consideration in staying competitive is for banks to explore collaborations with fintech firms and other innovative players. Partnering with such firms can provide access to cutting-edge solutions and accelerate digital transformation. Banks can also leverage open-banking initiatives to integrate third-party services and offer customers a wider range of financial products and services. In prior years, the thinking was that banks had to compete with fintech companies and innovate more quickly than the these firms could scale. Yet in today’s world, collaboration is king, with both parties benefiting from partnership. The buy-now-pay-later product and trend is a great example of this, demonstrating where partnership and collaboration can drive speed-to-market.

The lion’s share of work lies in companies’ ability to take an agile approach to their work and how it relates to customer interactions. While personalization is a worthy outcome of a team’s efforts, it should not be the goal. A positive business outcome should be the goal, with personalized and differentiated experiences, enabled through advanced capabilities like AI.

Bill Staikos is SVP, evangelist and head of community eEngagement at Medallia. He previously worked in the banking industry.