Banks are involved in a customer-centric digital transformation, which means using technology to provide the best possible service to the customer. They do this to retain customers through better service, but also because of the cost aspect. We interviewed four experts about this trend, who view it from completely different angles.
You see the same thing everywhere. The contact between banks and their customers is omnichannel. They prefer digital contact with their customers and encourage it. Digital communications are the most convenient for the customer and the cheapest for the bank.
"But you can see that personal contact remains important, especially when it concerns large transactions," says Timo Span, a partner with Deloitte, who works a lot with banks. "Banks, therefore, struggle with the question of when they want to and when they can speak to the customer in person and when this is not necessary.”
However, it is important that the different channels also connect with each other, Span continues. "Go to a bank branch. They often will have to check and verify you, while digitally you are well known to them. Of course, there are many reasons for this, such as compliance, security, and privacy, and those make it difficult for the banks to really put the customer first. They need to learn to see the customer side of it and really zoom into that. This is enormously important for them to keep a good place in the changing ecosystem they find themselves in.”
The Account Is Central, Not the Customer
Rui Pereira, a co-founder of low-code platform vendor OutSystems, also works a lot with banks to help modernize their legacy systems. He points to the same challenge and then goes one step further.
"Everywhere I go, reinventing the customer journey and improving customer interaction is at the top of the agenda. The large banks have formal digital transformation plans for this; others do not, but everywhere they talk about the consumer.”
He points out that banks do indeed have different channels, such as branches, call centers, apps, and a website. And indeed, everyone is trying to lead the customer to the self-service channels. "But all apps are the same and are based on what customers have always done," he concludes with a hint of desperation. "The banks simply have no idea how to reinvent the customer journey. And that's because they put the account first, not the customer!"
Pereira is well aware that it is difficult for banks to be radical. According to him, banks have to be careful with regard to safety, continuity, and compliance. "But they should try more. I think they can isolate some radical moves! Yes, they have all kinds of prototypes, incubators and the like. But when you open the apps, you see the same thing everywhere."
Speed Before Everything Else
According to Pereira, banks should really do more and dare to do more, but they are hampered by their culture and DNA. This does not apply to fintechs, the small startups in the financial world that use new technology to respond quickly to the needs of customers. That's why we spoke to John Robinson, founder of UK based fintech Bluezest. He also says that it all starts with a good picture of the customer. From there, you can improve the customer journey.
With his company, he focuses on one of the most complex issues in the banking sector, for which there was no digital solution yet: the quick assessment of high-value secured loans.
"People who want to take out loans from banks to buy real estate, for example, sometimes have to wait three months before their application is complete," he says.
All kinds of checks must be done. The value of the piece of property must be verified, the legislation that applies to it must be assessed, the creditworthiness of the applicant, and so on. "Suppose you want to buy a house for an agricultural purpose. The bank also has to check the influence of the regulations, including all complicated cross-links. This is extremely complex.
As a result, the customer sometimes has to wait for months, which is certainly not customer-friendly. Robinson's commitment at Bluezest is to ensure customers can start and finish this process at any time, from any device, from anywhere and get a reliable indication of the answer within half an hour.
A Secure Loan in 30 Minutes
For this purpose, all kinds of databases must be consulted in real time. There has to be proof of who owns the property, what it is worth, what the costs are, what legislation applies to it, what the creditworthiness of the applicant is, and so on. With Bluezest's new technology platform, built in a short time using inexperienced developers with the help of low-code platform OutSystems, it only takes 30 minutes. And it is completely self-service.
"This is possible because all kinds of checks happen in the background while you are still filling out the form," says Robinson. "Once you have provided your name, address, and date of birth, a credit check is carried out immediately and other information is obtained from a multitude of third parties as the process proceeds.”
Via APIs, information of all kinds is automatically collected from national databases and this is quickly combined. "We receive this data in real time, passing it through the Bluezest decision engine, so we can execute the decision making very quickly. That's good for us and good for the customer."
Asking Too Much Due to Legislation
This could never have been developed so quickly at a bank, Robinson thinks. "There are banks that are working on this, and some of them promise to have an answer within 24 hours, but they can't deliver."
It's not surprising that these banks cannot move as fast, says Marco Witteveen, COO of the Dutch branch of Garantibank, a Spanish-Turkish merchant bank that deals with financing companies and trade and commodity transactions. According to him, it is quite a task that the banks have received from the legislators. He points to the race against evildoers, such as money launderers and the financiers of terrorism, for which the banks play an important role as gatekeepers.
"These people are very creative," he says. And that's why the bank has to gather and verify all kinds of information and double-check them before they can even onboard people. Garantibank has to deal with human representatives from its customers in different roles, for example, UBOs, PEPs, and POAs. And as far as they're concerned, a lot has changed in recent years, Witteveen emphasizes.
"There is a lot of regulation these days, so we overcharge our customers. That takes a lot of spontaneity out of the relationships. We have to screen people before we can do business with them. Are they, for example, known from offshore leaks such as the well-known Panama papers and other screening lists? Do they have commercial real estate and what is their source of wealth? Why do they want to bank with us in the first place? We have to investigate all this before we can onboard them.”
All this information is needed, and that is why it's important to make the process as transparent as possible, says Witteveen. "We will shortly launch a self-service portal so customers can make changes to it themselves. Then they can also see what we need, so they can proactively upload it. This is how we speed up the process. We have to automate it because if we do it all manually, we will lose them."
Caught Between Compliance and Customer-Friendly
That's how banks always sail between Scylla and Charibdis. On the one hand, there are the fraudsters, legislators, security, privacy, and also their own legacy IT environment. On the other hand, there is the customer who needs to be helped by the best means possible. This field of tension is well defined by Witteveen. "Yes, we have to remain customer-centric, but we also have to be compliant, because if we make mistakes in this area, there will be immediate sanctions and fines in return.”
From what the four experts have told us, it is clear that the customer should be at the heart of all initiatives, not the existing products or processes. What do customers want and how do they customer work nowadays with all their different devices? How do they contact the bank, when do they purchase products? What questions do they have and how can they solve them as quickly as possible? If banks set up their entire organizations and their IT landscape to put the customer first, they can look at the future with confidence.