Retail banking transformation: what does the future hold?

8. January 2018.

The positivity was palpable at Marketforce’s 2017 ‘Future of Retail Banking’ conference, and it was easy to see why. Despite 12 months of turbulent geopolitical change, the industry has grown, contributing £35 billion to UK public finances — up from £34 billion last year. And the key to this resilience is adaptability. From open banking to blockchain trading, the industry has created a range of tools to move with rapid digital evolution.

At multiple sessions delivered by speakers from major firms such as HSBC, Nationwide and Google, this year’s discussions covered how digital development will affect banking in 2018, with a heavy focus on the innovative technologies transforming customer communications.

Here are my top four takeaways:

Navigating the multi-channel times

As advanced technologies have become increasingly integral to everyday life, the way banks communicate with customers has changed. In just a few years, the industry has gone from printed messages to email or web-based notifications, which enable individuals to access documents whenever it suits them. But smart tech has altered expectations and individuals are calling for interactions to be tailored and dynamic, as well as delivered in real time.

Consequently, financial institutions are facing a communications conundrum. While one-way email messages fail to offer personalisation or the opportunity for conversation, traditional two-way interactions — such as in-branch consultations — do not fit with the highly digitised habits of modern consumers. Clearly, banks need tools that allow them to combine the best of the old and the new worlds; entering into unique dialogues with customers across many channels.

Some have found the ideal solution in connected devices. For instance, as tools that allow consumers to reach any channel in real time, smartphones are gaining recognition as a medium that banks can harness to deliver flexible communications, be that via apps or social media chats. Similarly, emerging tech such as wearables and smart assistants are also paving the way for banks to provide a wider communications spectrum; such as chats with Alexa, augmented reality mortgage services, or smart-watch balance updates. What remains crucial is choice: consumers want control over how they interact with banks, so it’s vital to provide online and offline options; including physical branches, mobile, and smart gadgets.

Keeping experiences seamless

Although varied communication is now essential, managing it efficiently can be a tough task for banks. The average consumer interacts with their bank 17 times each month1, which is great news for engagement, but can make individual journeys difficult to track. This is largely because most businesses (finance-based or not) tend to store insight from different channels and devices separately. For example, data from email interactions is often held away from insight about telephone conversations.

Yet from the consumers’ point of view, such siloed data handling can make for a disjointed and frustrating overall experience, where information often needs to be repeated and issues take longer to resolve. Thus, retail banks must gain a holistic view of customer activity, and it seems the simplest way to achieve this is by consolidating data sources.

Through adoption of platforms with the capacity to remove data silos and create a complete picture of individual consumers, banks can considerably improve the quality of omni-channel services. What’s more, they can also measure how individuals respond to messages across several touchpoints and screens, and adjust their approach for maximum impact.

Making conversations personal

With banks starting to explore emerging tools as avenues of communication, there is one important factor they must bear in mind: personalisation. Research has found that for 86% of consumers, personalisation plays a crucial role in providing better customer experience2. As a result, communications delivered using chatbots or smart assistants provide more than automated question-and-answer sessions. Instead of fielding queries with generic responses, tech should be able to hold bespoke conversations.

To do so, it’s vital for banks to integrate new channels with their existing communications stack and processes — not leave management to the IT department — and ensure content is fuelled by a consistent flow of real-time insight. For example, interactions with intelligent voice assistants must be based on up-to-date and meaningful information, including details such as the balance of an individual’s current account or their latest mortgage estimate.

Optimising communications efficiency

Last but not least is the growing role of efficient communications systems in driving business productivity. In particular, organisations are increasingly using sophisticated tools that allow them to lower operational costs and boost reach by streamlining communications strategy. For example, by deploying tools that can instantly adapt messaging, banks can reduce time spent maintaining extensive template libraries and scale-up efforts. In fact, studies on the effects of system upgrades reveal organisations have been able to significantly enhance their output: producing 20 million communications the year after implementation, and 80 million communications 36 months later. And it doesn’t stop there. Research demonstrates that an automated system can shrink IT costs by 38% and — when interactions are switched from paper to digital — save 46% of the amount spent on postage and paper3.

Moreover, as long as systems are powered by data that facilitates tailored omni-channel conversations, there is evidence they can improve performance on key metrics too, such as customer satisfaction, retention, and brand recognition.

Above all, the central message at the ‘Future of Retail Banking’ conference was that success in 2018 depends on further adjustment. Consumers’ love of smart devices shows no signs of abating, and for retail banks, this means communication methods must be modernised to reflect current needs and trends. Personalisation, flexibility, fluidity and interactivity are now standard expectations that banks must incorporate into their communications if they are to secure a sustainable, and profitable, future.

Simon Tindal is CTO at Smart Communications.

1. Accenture Strategy, Banking Customer 2020 Rising Expectations Point to the Everyday Bank

2. Infosys Study: Rethinking Retail

3. Forrester Total Economic Impact™Study commissioned by Smart Communications April 2017

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