By investing in partnerships to help with technology challenges, financial services companies can increase customer retention
As everyone knows it’s the fine margins that often determine whether you win or lose, whether that is in sport or business. Attention to detail can be the difference between winning or losing a deal, or the amount of margin you get on a sale. Understanding the machinations, the stuff behind the scenes that can influence the outcomes is important and can often nurture that winning edge.
For banks this has never been more relevant. Retaining customers and winning new ones is only going to get more difficult. As banks continue to embark on digital transformations in the face of increasing disruption, it may be good to know that they are doing it all for the right reasons. According to Couchbase research, it is the pursuit of amazing customer experiences that is driving change and certainly, banks need to change.
How to cope with disruption
Last year PwC’s Global Fintech Report revealed that out of the 1300 plus financial industry executives it polled, 88% said they feared their business was at risk to standalone financial technology companies in areas such as payments and money transfers. Disruption in this sector has been rife for the past two years, so what about 2018?
This year we will see an acceleration due to more sophistication primarily in data analytics. Machine learning and robotic process automation will start to drive back-office functionality, taking care of the daily mundane tasks and helping to improve efficiencies.
However, it is still in mobility that we will see the biggest changes, as workplaces continue to evolve with digital transformation. A large part of this is how the workforce wants to manage expenses and payments. As banks look to improve customer retention through increased satisfaction, they have to embrace customer change too, reflect customer demands through their own digital transformation and partnerships. There is no quick fix and no bank can fill all the digital service gaps through acquisition or organic development.
5G and customer experience
This year we will see businesses start to prepare for what 5G has to offer. The increased data management and low latency capabilities promised by 5G means businesses can start to envisage how mobile working will dramatically improve, with increased reliability and bandwidth. For banks, this is an opportunity to develop a strategy of their own. How can the 5G network be utilised to improve business customer experience?
While mining and analyzing data to understand customer habits and needs is already important, how will banks integrate data from mobile services? How will they ensure security and react quickly to changing demands?
Banks need to partner more closely and embrace established and secure fintech ecosystems. There has to be greater synergy between services, with no more fragmented data structures that are difficult to manage. They have to look for partners with APIs to enable software and systems to work together through the ecosystem.
As services grow, so the complexity of the data will demand increased automation, not just for improving customer services but also to ensure compliance and reduce risk. Understanding customers will be the number one strategy for 2018, but as banks look to compete with challengers and make happy customers, only partnerships with fintechs will ensure they can rise to the challenge.