Digital transformation fuels great customer experience
Digital transformation fuels great customer experience.
Digital transformation may sound like something that affects the internal workings of an organisation. But, when it comes to Fintechs in particular, IT is where the customer is. Get your digital journey on track and it’s your customers who will reap the rewards, as much as your business. Put simply, the marrying up of emerging technology with seamless network infrastructure may not sound sexy. But, it has enormous power to ignite customer experience or CX – and therefore your growth. And that’s exactly what we are going to delve into in this article.
CX: your North Star
75% of financial organisations named digital banking transformation as their top priority in 2021, followed by customer experience improvements (51%), according to The Digital Banking Report. But, is this the right way round? We would argue that the two are intrinsically linked. Customer experience should be the driving force behind your digital innovation and at the centre of your technology transformation strategy. CX should be your North Star. It’s best to start with your customer needs and demands - and work back.
The C word
And those needs have certainly transformed at pace over the last few years. We all long for the day when Covid-19 won’t feature in every conversation. But, when it comes to talking about Fintechs, digital transformation and customer experience, glossing over the pandemic would be a huge oversight. With customers unable to go to their High Street branches for vast swatches of time, new Fintech products and platforms sprung up seemingly overnight. While traditional banks disrupted and digitised at meteoric speed.
Banks under pressure
The inevitable demise of traditional bank branches, combined with the introduction of sophisticated digital banking services, is continuing to shape customer attitudes and expectations of banks. And it’s a highly pressurised environment.
According to Bain & Company, who surveyed about 56,000 consumers in 11 countries in 2020 : “Banks’ steady improvement of their mobile apps and websites paid unexpected dividends for customers during the Covid-19 pandemic. As branch visits dropped, many consumers turned to digital channels for all kinds of transactions, including purchases of banking products. […].Respondents most frequently cite affordability of a competing offer, they also cite better digital tools, a simpler purchasing process and convenience.”
According to Bain & Company, who surveyed about 56,000 consumers in 11 countries in 2020 : “Banks’ steady improvement of their mobile apps and websites paid unexpected dividends for customers during the Covid-19 pandemic. As branch visits dropped, many consumers turned to digital channels for all kinds of transactions, including purchases of banking products. […].Respondents most frequently cite affordability of a competing offer, they also cite better digital tools, a simpler purchasing process and convenience.”
Savvy consumers
Customer expectations are certainly higher than ever – hot on the heels of seamless, personalised experiences that we’ve become accustomed to, thanks to the likes of tech trailblazers Amazon, Uber and Deliveroo. Although we are talking about Fintech for the purpose of this article, these customer demands transcend industry and sector. Today’s customer is savvy and easily switched-off. In a post-Covid 19 world (can we say that yet?) switching to different providers is easier than ever.
Switching it up
The Current Account Switching Service (CASS) has seen an upsurge in account migrations based on service quality, rather than cash incentives, with challenger banks profiting from the trend. Nearly a quarter of a million switches (248,902) took place between October and December 2021. That’s a staggering figure. The main reasons for this? In order: better online banking facilities, sophisticated mobile or app-based banking systems and improved customer service. Loyalty, it appears, can easily wane, if these factors aren’t up to scratch.
Knowledge is power
For Fintechs, the amount of data generated by credit card transactions, ATM withdrawals, credit scores, and other financial tools is mind boggling; a veritable smorgasbord of often untapped or underutilised customer information. The more you know about your customer through this data, the better you can understand them and meet their needs. And then you can make your offerings more personal and targeted. This in turn can increase engagement and conversion, improve loyalty and retention – and boost ROI. With this in mind, Fintechs need to prioritise customer centricity. And it’s emerging technologies and data transformation that’s making that possible.
Cloud, first
In order to do this though, you need to understand your customers’ entire life cycle. How you collect this data in the first place is critical. The undoing of physical data centres and data transfer to cloud servers can be expensive. But the cost to maintain the data is lower in the cloud, and the response time is faster—meaning customer-facing apps can be launched quicker.
In the words of our Technical Director, Nick Bridgeman, “There's a move to virtualisation, especially with cloud technologies; being able to virtualize some components and offer them out quickly in terms of standard designs. What we're seeing is that IT decisions are no longer just made by IT. Decisions are being influenced by the end user. And some of that is because the end user is actually more aware of technology than say five years ago.”
A word on segmentation
Fintechs have created borderless financial services that allow for real-time data transfer. This data can then segment customers in different categories, creating even more valuable information about what products would meet the needs of your customers. Segmentation can include things like customer demographics, family, employment, financial information and online behaviour. It helps identify the high-value customers; an extremely useful tool for Fintech marketers.
Internal inefficiencies
Back to customers, and specifically CX, of all the enhancements we’ve mentioned so far – none will succeed if there is employee frustration about what it takes to maintain customer experience. Behind the scenes, there’s often wasted or misplaced time and resources, or a lack of expertise in emerging technology within Fintechs. There are all sorts of moving pieces that make up the customer experience jigsaw from within: security, integration, access and support. When systems, processes and internal teams are not singing from the same song sheet, there will be inevitable disconnects – that customers will in turn feel.
As our Technical Director, James Williamson, explains: “The Fintech sector has always been driven by innovation. And yet, recent Gartner research shows that talent shortages are a rising and significant challenge for successful adoption of emerging technologies. 64% of IT professionals asked said that talent availability is the largest challenge to emerging technology adoption. There’s great excitement about new tech, but the skillsets are lacking to allow them to fire on all cylinders. And this can have a knock-on effect on customer experience.”
Digital transformation is customer experience
Digital transformation can require changes to operations, data and technology infrastructure, customer touchpoints and other aspects. And it can seem like a big undertaking. But it’s one that will supercharge Fintechs into their next era of growth.
According to McKinsey: “The challenge they [bank CIOs] face is significant: in a competitive environment of rising cost pressures, where rapid action and response is imperative, financial institutions must modernise their technology function to support expanded digitisation of both the front and back ends of their businesses.”
Digital transformation is therefore not just for customer experience; it is the customer experience. The true judges of its success will not be Fintech CTOs or CIOs – but their customers, who are on the receiving end. The two paths are therefore simple: Face their wrath and turn-off? Or make your Fintech business customer-centric by design? You decide…
Hi. We’re BestPath. The unsung heroes, working quietly and competently behind the scenes to inspire and empower our Fintech clients. Combining curiosity with innovation we deliver agile, secure and trusted network infrastructures that enable Fintechs to deliver exceptional services and outstanding customer experiences. Let’s chat about how we can do just that, for you. info@bestpath.io
