Only CX can save banks from the rise of the fintechs
Every bank is aware of the rapid growth of the Fintechs (Financial Technology companies). These innovative startups have been carving out slices of...
Recently, DBR Media in the US published their digital banking report. This research analyses the impact of technology on the financial services industry and in particular how banks need to adjust their service offering to meet the challenges of new competitors.
The latest report is focused on how to improve customer experience (CX) in banking, but when I read a summary of the research in the online banking journal, I was shocked to see some of the findings. To say that banking needs a wake-up call appears to be an understatement.
First, let’s look at the positive message from this summary. All financial companies involved in the research acknowledge that customer experience is a priority and most have a three-year plan to increase their focus on CX. However, that’s about it. Only 37% have any formal CX plan, smaller banks are not really taking CX seriously, and most of the companies surveyed are finding it a challenge to take on data analytics, omnichannel and creating a single view of the customer.
This research is US focused, however the US is a mature banking market and it might be expected that the demands of American banking customers might be forcing banks to take CX more seriously. With the growth of financial technology (fintech) alternatives to banking services – such as using an app for a loan – there is not only a major new wave of customer-centric competition, but the expectations of banking customers are changing rapidly too.
If this research is an accurate reflection of how financial institutions are managing CX in the US today, then a wake-up call is required. Banks have to get this right because technology is entering their market. Apple now has a payment system. How long will it be until Google or Facebook launches a retail banking service, perhaps integrating bitcoin to make the first global currency that can be used anywhere? 37% of banks already planning to improve their customer experience may be the only ones that survive in this new ultra-competitive world of finance.
What do you think about these research insights? Please leave a comment here or get in touch on LinkedIn with your views on banking and CX.