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The future of banking: frictionless and data-fuelled

Carla Petersen Senior Business Consultant
David Spencer Senior Technology Consultant

Situation: competition heating up, consumer expectations rising

Hailing a ride from Uber, sending money online via PayPal or buying a coffee with Apple Pay are frictionless, personalised, on-demand experiences that have defined the customer experience benchmarks for companies in every industry—and that includes banking. Behind their slick interfaces, disruptors from Netflix and Uber to Amazon and Facebook set themselves apart through their masterful use of data to deepen their understanding of people and deliver a more personal and relevant experience.

These evolved consumer expectations imply that banks must shift their focus from:

  • products to customers
  • channels to experiences
  • campaign thinking to always-on execution

However, traditional banks—bogged down by organisational siloes, legacy systems and fragmented data and processes—are struggling to keep up. Though the capital requirements and regulatory barriers to retail banking remain high, banks cannot afford to be complacent about the prospect of more digital competition, be it from digital natives like PayPal and Amazon or from nimble fintech companies.

Digital channels, combined with regulatory interventions like the UK’s Open Banking, mean that it’s easier than ever for an unhappy customer to switch and that there are more opportunities than ever for disruptive companies to target them with enticing offers. Banks that do not build a truly modern digital marketing capability face the prospect that their market share will stagnate, their customer satisfaction will drop, and the value of their brands will be slowly eroded as they struggle to remain relevant.

The successful bank of the future will put data at the heart of every decision it makes.

Those banks that take control of their data, put the associated intelligence and insights to work to deliver a superior customer experience, and provide a unified and consistent service across channels, platforms and products will be able to extend their market share and position themselves as the winning banks of the future.

Implication: banks must truly put customers in the centre of their business model

The shift to a digital world has changed customer expectations of banks in at least five key ways.

  1. Customers want banking to frictionless: People want banking experiences that are as simple as one-click buying on Amazon—no complex menus and no inconsistent interfaces across different channels.
  2. Customers want more options: They want a consistent and convenient experience spanning branches, call centres, apps, and the web.
  3. Customers want transparent, responsive customer service: Customers expect on-demand, 24/7 services—no matter of the channel they choose for a transaction or interaction.
  4. Customers want to be understood with messaging and offers that are truly targeted to their needs.
  5. Customers want great value from their financial products and services: Customers are willing to exchange their personal data for good deals and discounts. Herein lies an opportunity to acquire and retain customers.

Three priorities for future-ready banks

The successful bank of the future will put data at the heart of every decision it makes. The better it can understand market and consumer dynamics, the more it can innovate and re-design its value proposition for the consumer. Here are three priorities for banks to focus on as they reorient their operations and systems around the customer.

1. Active use of customer data
Many banks have vast pools of data at their disposal but are not exploiting this powerful resource to its full potential. They should thus focus on transforming and integrating disparate data sources—currently siloed around products, channels and departments or business groups—into a usable asset, that supports a personalised customer engagement strategy. Banks need to blend their accurate, consolidated data that into a single view of the customer.

We recommend a three-step approach to data-powered decision-making:

  • Apply a customer-centric approach to solution architecture
  • Implement an automated audience segmentation engine that responds in real time to new customer behaviours and learns dynamically over time
  • Develop a measurement framework and put insights at the heart of business decision-making

2. Developing the right technology stack
The bank of the future will need to build marketing technology infrastructure that supports a data-driven customer engagement strategy. It will need to take ownership of its advertising and marketing technology stack to ensure consistency and integration across its systems and platforms. The flow and aggregation of data between these systems is the key to breaking down operational and data siloes across paid, bought and earned media, between channel siloes, and between different bank products.

Some steps along this journey include:

  • Selecting a unifying platform for central segmentation (audience) management.
  • Optimising technology investments through standardisation and consolidation.
  • Developing an integrated marketing technology architecture spanning the enterprise.
  • Building digital touch points along the full purchasing pathway.

3. Get the culture and the organisation into gear
Building the tech and revamping the data will not be enough to drive success—banks will also need to drive the right organisational and culture changes to become digital, data-driven businesses. Some of the key elements of success include:

  • Strong change management, backed by executive sponsorship.
  • Cultivating an agile culture of rapid iteration and non-stop learning to keep pace with the digital customer.
  • Appropriate key performance indicators and metrics to reward the right behaviours.
  • Alignment of company culture and relevant organisational design.
  • Identifying data champions to articulate and support a data vision and strategy.

We can help you to become future-ready

To remain competitive into the future, banks need become adaptive organisations that are ready for constant change at massive scale and rapid speed. Consumers and digital disruptors have set a new pace for banking—but banks that act now to create frictionless, data-fuelled customer experience can themselves be the next market disruptors.

About The Authors Carla Petersen - Senior Business Consultant

As a Senior Business Consultant, Carla works with clients to bridge the gap between marketing and technology. She draws on her deep experience and understanding of the digital media industry to articulate strategic insights for clients

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David Spencer - Senior Technology Consultant

David is passionate about the application of technology and has been working within IT, software development and digital marketing since 1998. He has broad expertise in web development, database design, solution architecture and system integrations.

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