Article by Publicis Sapient Senior Director of Financial Services, Adam Flesch.
Australian banks have made progress in improving their customer focus. They responded quickly to the COVID-19 pandemic and have all started implementing new technology that will improve customer service, save time and reduce costs.
But even as banks improve, customers demand more.
Customers have become accustomed to having seamless mobile and digital interactions with businesses in other industries every day, such as Google, Amazon, and Apple. They expect their banks to match these experiences.
Nonbank financial institutions and fintechs have stepped up competitive pressure on banks, giving consumers more choice in their banking operations. These challengers have been able to anticipate customer needs and deliver the right products and services when the customer needs them.
The success of these newcomers has been their adoption of technologies such as artificial intelligence (AI), machine learning, and behavioral sciences.
These smart tools allow businesses to extract insight from data and processes so they can forecast customer needs and tailor their offerings accordingly.
Incumbent banks are exploring ways in which AI can add value to their customer experiences and be safe, secure and unbiased.
COVID-19 has rapidly increased customer expectations of product and service providers, making apps and experiences even more important to winning and retaining customers.
Forrester’s Australian Banking and Pension Customer Experience Indexes (CX Index) for 2020 highlight the effect of a positive customer experience. Among customers who feel valued by their bank, 78% would advocate for their bank, 75% plan to spend more with the bank, and 66% plan to stay with the bank.
The importance of a customer’s thoughts and feelings when interacting with a product, service or brand is not a new concept.
In February 2007, Andre Schwager and Chris Meyer wrote in their Harvard Business Review article, Understanding Customer Experience, that customer satisfaction arises when the gap between customer expectations and their subsequent experiences is closed.
But with ever-increasing customer expectations, bridging the gap between expectations and reality requires staying one step ahead of customers and competitors.
There is a large financial institution in the area that achieves this goal. The bank pioneered mobile banking in Thailand, launching its Bualuang mBanking app in 2014. But recently, commission revenues have declined, costs have risen, and competition from other banks and fintechs has intensified.
The Thai bank has redefined and redesigned its mobile banking experience and created a new kind of personal banking app.
Built using a mobile-centric technical architecture, the app could be launched quickly and updated regularly as the bank tests and learns with its customers. Within two months of its launch, 90% of customers had adopted the app.
Likewise, Australian banks must anticipate the needs of their customers and stay ahead of their competitors.
Australian banks have a head start over other types of businesses in achieving this. Together, local banks have 19.3 million customers on their books, according to data collected by the Australian Banking Association. They can grow by fostering and expanding existing relationships.
Banks can use “anticipation banking” tools such as AI, machine learning, analytics, and behavioral science to better understand their customers.
They can use AI analysis and technology to extract and interpret large and complex data sets from internal and third-party sources to identify what customers want. The information derived from this data can help customers make smarter spending, payment, and budgeting decisions.
Banks can also use their findings to resolve potential customer issues before they arise. For example, by identifying queries that commonly arise at a certain point in a customer’s journey, banks can provide an easily accessible explanation at that point. Data can help predict who will need a service and deliver it before they realize they need help.
Using natural language processing, banks can analyze call center contact records to better understand customer issues. The AI can then be used to identify who resolved the call. Tying the problem to the resolution can help direct future calls, so the next customer gets help faster.
The application of technology enables banks to anticipate the needs of their customers, create value and exceed customer expectations. Supported by organizational change, this will allow banks to maintain their relevance and offer customer experiences comparable to those of major consumer brands.