When it comes to the digital experience, most banks have fallen behind other industries. We live in a world where I can pull out my phone, push a button and somebody shows up in a car to drive me somewhere without me having to say a word. Not to mention, when I get out of the car, the payment process is invisible and frictionless. This is the customer experience financial institutions must compete with.
Last summer, I spoke at the American Institute of Physics (AIP) Conference about how financial institutions can sustain the shift to digital channels in a post-pandemic world. I want to reiterate that at this point, we can’t afford not to. Customer needs are evolving, competitors are raising the bar with new services and traditional financial products are not enough anymore.
Banks are notorious for short-term decision making that have caused them to miss out on the benefits of consistent tech investment. They budget on annual cycles, decisions are based on old ROI models and roadmaps are prioritized based on what will deliver an in-year return. In addition banks are a case study of Conway’s Law, which states that organizations design technology that mirrors their organization and communication structure. Financial institutions are organized in silos, which means it’s not uncommon to see duplication of systems across silos. As financial institutions add new products, or complete new mergers and acquisitions, more silos are created, which is reflected in the organization’s architecture.
This makes every change more difficult, more expensive and more complex. Financial institutions need to break out of the product silo centric mindset and assume a genuinely customer-centric view throughout the organization. Increasing the pace of change is the only way to sustain the shift to a truly digital culture, which can leverage Artificial Intelligence (AI).
Reimagining the customer experience with AI
Customer propositions can no longer be static and one-size-fits-all—they should be intelligent, tailored, and go beyond banking to address customer needs that may involve both banking and non-banking products and services. Financial institutions that leverage AI and analytics to deliver these type of intelligent servicing propositions and superior experiences will be able to increase customer satisfaction and loyalty, and ultimately generate higher revenue.
Financial institutions can achieve this by addressing the following three areas:
1) Shared data across the organization
A real time, enterprise-wide data infrastructure that captures all the data points for a given customer’s relationship with the organization’s various divisions. This creates a unified customer view and encompasses all channels, journeys and products.
2) Consolidation of data on a central platform
For these enterprise data sets to be leveraged effectively and widely across teams, banks using AI should aggregate the data captured from multiple internal and external sources into a central customer data platform.
3) Appropriate data governance
The only way to get intelligent, highly personalized interactions with customers is to make sure that the appropriate data is available for decisioning, at the right time and in the right form, to the various AI models used by teams.
Creating customer experiences in the digital and AI era requires a new set of skills and capabilities centered around design, data science and product management. The types of data, analytics and AI skills required to build these new customer experience and propositions are not traditional to most financial institutions. The war for this type of talent remains one of the biggest challenges for financial institutions and it requires a comprehensive plan for recruiting and retaining the right people. This strategy should also define which capabilities can and should be developed by the bank to create competitive advantage and those which can be gained through partnerships with technology partners.
The advancement of AI and its ability to help reimagine customer experience is ultimately about humans. To realize this vision requires not just the right kind of product and tech talent, but agile ways of working, and the very human capability to manage partnerships.