The bar to meet customer expectations across industries has continued to rise. Digital innovation is changing how companies engage their customers in every interaction, particularly how they deliver information as well as products and services.
A McKinsey survey looking at the banking, auto insurance, retail energy, health insurance, and mobile communications sectors found that the quality and availability of digital interactions have a significant impact on customer satisfaction. Adding digital offerings is crucial to what consumer-facing companies must do to remain competitive in the face of increased customer expectations.
However, some organisations still only offer basic digital services, and not all have created integrated, omnichannel experiences. Companies that use technology to transform customer experience have increased customer satisfaction by 15 to 20%, reducing cost to serve by 20 to 40%, and boosting conversion rates and growth by 20%.
As consumers have come to expect the same experience of their financial services providers that they have elsewhere in their lives, traditional financial institutions (FIs) are increasingly looking for ways to improve customer service and deepen engagement. For many, optimising the digital experience for customers is a priority. From leveraging omni-channel communication strategies to creating more personalised experiences, the goal is to deliver the right message, at the right time, in the right channel.
Fintech firms have been faster to innovate. Many, in fact, were born to address consumer dissatisfaction with traditional financial services providers.
These incumbents - including Barclays, Goldman Sachs, Rabobank and National Australia Bank - are increasingly turning to the cloud as a way to accelerate their digital transformation. Shifting away from legacy infrastructures and towards cloud eliminates the undifferentiated heavy lifting that takes up precious time and resources, giving the institutions more opportunity to focus on responding to customers' needs and achieving greater elasticity, flexibility, and cost-effectiveness.
Finextra Research has spoken to Amazon Web Services’ Lynne Zeldenryk, Digital Innovation Program for Financial Services, and Andrew Levy, Business Development for Digital User Engagement, about the growing role of cloud to help meet dynamic customer expectations. This includes enabling a more holistic view of the consumer, quickly and easily implementing digital solutions at any scale, and making it machine learning and artificial intelligence more accessible for surfacing insights.
What does digital user engagement mean for traditional financial institutions?
Digital user engagement (DUE) has evolved from simply interacting with customers via an online service to anticipating and understanding their needs based on their actions and behaviours. As a group, FIs have faced persistent challenges that slowed advancements in this area.
“The past and present state of digital engagement within the financial services industry has been largely focused on expanding the number of engagement channels,” says Levy.
“This is no longer enough.”
Whilst many fintech players such as TransferWise and Robinhood have harnessed mobile-first services to acquire and scale new customer bases quickly, consumers today do not consciously separate digital and in-person experiences. They have grown accustomed to real-time access to information from any device, any location and at any time. As a result, they expect “right-time” information and customised offers to fit their needs.
Originally published by
FinExtra | June 26, 2020