UK financial services firms are seeking growth against a challenging economic and political backdrop, with an emphasis on new revenues. Our Profitable Customer Growth in Financial Services podcast series explores the role of innovation and the disruptive technologies that will enable firms to transform and optimise their businesses for growth.

In our first podcast, I was joined by journalist Lindley Gooden and Jason Maude—Head of Technology Advocacy at Starling Bank—to discuss how financial services firms can deliver customer excellence by serving “a million markets of one”. The debate is essential listening for firms seeking growth and new revenues against a challenging economic and political backdrop.

Today’s customers expect more than ever from their financial services providers—including timely and relevant information and recommendations, based on an ability to understand and anticipate their needs as individuals. Clearly, digital technologies can help firms meet these demands through faster, more convenient and more tailored services. But they also bring a risk of removing the vital “human touch” from the relationship, leading to a customer-provider disconnect.

So the challenge for banks and insurers is to blend digital and physical services in ways that reduce friction and increase convenience while also enhancing the human touch—thus differentiating them from the competition. This raises the key issue of how much customer engagement does differentiate financial services firms.

Lindley Gooden kicked off our debate by asking this question—and it’s certainly a highly topical one. Financial services customers used to pick their provider based on things like value for money rather than the experience they’d receive. But Accenture’s recent research – the 2019 Financial Services Consumer Study – suggests a third of millennials are switching financial services provider because the experience isn’t good enough. This generational shift means any financial services firm that fails to focus on the customer experience may not be in the marketplace for long.

Any financial services firm that fails to focus on the customer experience may not be in the marketplace for long.

Jason Maude picked up on this point—saying that Starling and other challenger banks are actively trying to differentiate based on experience. “This used to mean what sort of service you got when you rang up customer services when there was a problem,” he explained. “Now it’s much more about what day-to-day features you get offered. Things like the aggregated spending data that Starling Bank provides: that’s a differentiator. We can say, ‘we have that, and other banks don’t’.”

Blending physical and digital for a frictionless experience

From there, our discussion ranged across the entire spectrum of issues involved in building customer engagement through digitally-enabled experiences—including how banks can maintain a personal touch while delivering relevant personalisation. And a key part of the answer is blending the human and the digital experience into one holistic story.

To do this, firms need a holistic organisation where all the different parts are well connected, so a consistent experience is provided throughout—including by human representatives. Customers still want a human involved in the relationship: 70% want to speak to a person when they have a complaint, and two-thirds when they’re opening an account. So—certainly for the next few years—there’ll be a definite need to seamlessly blend the digital and human elements.

Again, this was confirmed by Jason’s experience at Starling, which showed that making personalisation happen in practice was about two things. The first was taking customers’ data and reacting to it in ways that help them. Like sending a customer a notification saying, ‘You’ve got a payment scheduled to go out tomorrow for your electricity bill, but you don’t have enough money to pay it right now’. The second was providing customers with the option to personalise their own financial experience. Jason explained: “For example, Starling has a roundup feature which allows customers to say, ‘round up every transaction I make to the nearest pound, or double it, and stick that money in a savings pot so I can save up for a holiday”.

Given offerings like these, are we at the point where the market of one really exists? In my view, the answer’s yes: with the data and analytics tools available to providers today, we can make every experience unique. Jason agreed: “A lot of this comes back to the customer’s ability to transfer their financial data between different financial providers, especially with the advent of Open Banking.”

We closed by looking at where all of this take us. As Lindley observed, maybe the key is ensuring customers don’t feel they’re just interacting with a machine that can’t respond to them in a human way. He was spot-on. Customers still worry about the “computer says no” reaction made famous a few years ago by the Little Britain comedy series. So, it’s vital to maintain the distinctive nature of interacting with a human. The good news is that with technologies like AI handling the number-crunching, the opportunity to have a human touch is increasing.

 “In the moments that matter, people still want to talk to people. We’re going to have to build multi-channel experiences, integrated channel experiences that join up the way that we engage, to make sure we don’t lose the customer by providing something that is inhuman.”

The message is clear: as financial services go digital and personalised, it’s vital to keep the humanity in the experience. That’s key to serving a million markets of one—and driving profitable customer growth in challenging times.

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