Choose a country

United KingdomEnglish
South AfricaEnglish

Can retail banks compete with fintech on cx?

25th July 2017

I don’t remember that Bill Gates once called retail banks ‘dinosaurs’, but I was reminded of his statement by a recent article in the Harvard Business Review. The article explored the glacial progress in improving the customer experience for most bank customers and laments that only 7% of credit products can be processed end to end without human intervention.

I’m sure that 7% figure varies from one market to another, but the underlying truth is that retail banks have found it very difficult to change their business model. They have large legacy technology systems that underpin their business processes and services provided online need to be mirrored across a physical branch network. It’s not easy to be agile when one new service may require training for thousands of employees.

But now the banking industry is changing faster than ever before. The HBR research points to financial technologies (fintech) presenting banks with an existential threat. How can they possibly compete with fintech startups that can design their service entirely around customer needs?

But a trusted brand and a large existing customer base still count for something so it’s not over yet. It’s true that the fintechs have an enormous advantage in agility, ability to design services around customer needs, and the lack of legacy systems or branches, however there are steps that the banks could take to leverage on the fintech approach. This feature on the American Marketing Association website highlights three key areas where banks can focus:

  1. Integrate apps and humans into an intimate customer experience: if banks can offer great apps, but always allow the option to reach a human at any time then the service will be seen as more helpful.
  2. Design a personalised digital customer experience: using information on the customer to create a highly personalised experience.
  3. Achieve an automated customer experience: automating as many simple and basic procedures so customers only need help with complex queries.

This advice may sound obvious, but I think that it does strike at the heart of what banks need to do to fight their more agile competitors. Banks have trust, they have experience, they have a large amount of existing customers, but they face an uncertain future because the fintechs are designing services that customers really want.

However, if they can follow these basic rules and automate anything simple, use their knowledge of your banking history to create a highly personal service, and tightly integrate the online and offline experience they have a good chance of retaining many existing customers. It will all be about the customer experience.

I do remember reading The Road Ahead by Bill Gates in 1995 and he accurately predicted Spotify and Netflix long before anyone could imagine what a streaming service would look like, so perhaps it’s worth going back to see what else he said in the nineties. He got it right for music, movies, and banks. What else did he say back then? If you have any views on my article then please do leave a comment here or get in touch directly via LinkedIn.

Leave a Reply

Your email address will not be published.Required fields are marked *

Helen Murray
Article by: Helen Murray

News & Insights

Recommended for you
Service Provider
Solution Designer
Technology Enabler
Ronald Van schijndel appointed CEO webhelp the Netherlands

Ronald van Schijndel has been appointed as the new CEO of Webhelp the Netherlands. Ronald steps into this role following the unexpected passing of our dear colleague and former CEO Gert-Jan Morsink with whom he’s worked closely on the development and growth of the business since 2012. Thanks to his experience and passion for organizational development Ronald has been a key influence in shaping...

Brits Are Looking Forward to a Traditional Family Christmas

  Electronic devices and computer games don’t make it into top 10 of gifts   With Christmas just days away, the majority of Brits are looking forward to time with friends and family this festive period, according to the latest consumer research from customer experience expert,...

Speech Analytics: Improving the Customer Experience

This week’s #techenabler vlog. Chris Bryson, Global Analytics Director at Webhelp, discusses about the importance of speech analytics in customer experience. Speech analytics delivers rapid insight into a range of improvement opportunities, based on an analysis of a large number of customer...

The Spring of B2B Marketplaces : Modelling the impact of B2B Marketplaces strategies

Following the presentation of The Spring of B2B Marketplaces at the Marketplace Summit by Mirakl, we are pleased to make this fascinating study available to you! This study covers the state of B2B marketplaces today, and is proudly co-created by Roland Berger, Mirakl and Webhelp Payment...

Case Studies
Post Office Limited®