APAC Leads in Digital Banking Adoption
TIBCO Software SVP EMEA and APJ Erich Gerber says customer expectations are quickly reshaping the banking industry. Gerber argues that client centricity via digital banking is a must if traditional banks want to remain competitive.
By Erich Gerber
As consumers, our expectations of banking services have evolved far beyond traditional services. In fact, our experiences with big tech companies and fintechs that are adept at blending physical and digital experiences are strongly influencing the banking model for traditional banking institutions.
Capgemini found that customers prefer financial products from big tech firms with three fourths of tech-savvy customers, reporting that they use at least one financial product from one of these firms because of the lower cost, ease of use and faster service.
While traditional banks still enjoy an advantage today, KPMG argues the status quo is quickly changing.
S&P Global says regulatory requirements began to change in Asia-Pacific countries including China, Hong Kong, Taiwan, Australia, Singapore, Japan, Korea and India, to allow more digital banking entrants; traditional banks are now realising the need to improve the focus on the customer and embrace digital strategies to stay competitive.
The Asia Pacific region is leading the world in digital banking adoption and driving mobile technology investments, according to Deloitte.
Higher customer satisfaction, reduced customer churn, and increased revenues are clear benefits to creating great customer experiences. Indeed, removing friction from the customer journey was cited as the top trend in 2020 by banks, credit unions and the supplier community globally.
To create exceptional customer experiences, banks in Asia must take a holistic approach to change. This means developing strategies that come from an understanding of how customer value is created, adopting technologies to let customers interact on their own terms and fostering a corporate culture from the top down that is focused on fully supporting customers.
Discovering what your customers want
Banks must begin to transform their organisations with a strategy that is based on a full understanding of what drives and motivates their customers, as well as what keeps them from using competitor services.
Too often, business leaders assume that they know what their customers want and do not see any need to learn more, but it is important to understand their actual experience at all stages of their journey to get a full and accurate picture. This insight will help banks take advantage of what helps them stand out from competitors and enable them to prioritise the transformative activities that will extend this advantage.
Based on a survey of consumers, Accenture outlined four distinct personas beyond traditional demographic segmentation that can help banks effectively engage customers with personalised services. In the Asia Pacific region, consumers in mainland China, Indonesia, India, Malaysia and Thailand outpaced the global percentage of pioneers (i.e. risk takers who are tech-savvy and hungry for innovation). Conversely, consumers in Hong Kong, Japan and Singapore have high percentages of skeptics (i.e. people who are tech-wary, dissatisfied and alienated). Having a more robust understanding of customers will have a profound impact on the types of services banks prioritise.
Banks must make significant changes to how they organise and go to market to deliver an improved customer experience. Customers must be central to business planning and operational effectiveness to make customer experience a differentiating factor for organisations.
Selecting the best tech solutions
Technology is constantly reshaping and expanding the ways brands interact with their customers.
Consumers can drive their own journey as brands expose back-office processes to them. These innovative and connected digital products allow consumers to interact when and how they want. For banks to provide these same capabilities to their customers, they will need to rethink their processes and ensure that the journey stays within organisational frameworks.
Banks need to have the capabilities to understand insights, map and mine processes, deliver personalisation and relevance, conduct real-time calculation and delivery of engagements, and gain continuous feedback of customer experiences to adapt and optimise services.
There are great examples available on how technology can be used to create great customer experiences with the help of advanced analytics and machine learning. For example, the rise of mobile adoption in Asia is changing customers’ expectations of one-to-one engagement with their financial institution. Through real-time monitoring of “data in motion,” banks can also identify fraud earlier to lower losses and discover customer service issues and opportunities faster to drive higher conversion rates. Banks can also refine their understanding of customer behaviour and preferences when data is unified from multiple sources.
Realigning the culture to support customers
Top customer experiences are not possible without an internal culture that is completely committed to creating great experiences. That commitment starts with leadership. Without a strong vision from the top, attention to customer experience can be diluted by competing priorities.
Leadership must also work to ensure that all employees have a full understanding of their customers. This means empowering employees with data analytics tools to help them make decisions and take actions that will positively impact the customer experience.
A culture of agile decision-making also fuels quick innovation, as the contributions from decision makers will help to make products and services better. Banks that wait to get it right the first time miss opportunities. These cultural changes require open lines of communication so that data can be analysed, decisions can be made and ideas can be tested.
Customer expectations are quickly reshaping the banking industry. In order for traditional banks to retain a competitive advantage, a strategy for digitalisation is required that puts consumers at the centre of operations.
Technology can enable banks to understand their data and make better, faster decisions to fuel the customer experience. It also helps to create connections with customers and puts them in control of where, when and how they engage, which improves their overall satisfaction.