The Future of Customer Experience in Financial Services

The Future of Customer Experience in Financial Services

CIO INSIGHTS

The Future of Customer Experience in Financial Services

The ubiquity of mobile devices and the continuing

increase in global connection speeds have

drastically transformed the way the world does

business, and mobile banking is one of the leading

examples. In 2016, the U.S. Federal Reserve

reported that 53% of banking customers who own

smartphones were engaged in mobile banking, and

the momentum to mobile is certain to continue.

The financial services industry is in full

transformation mode in response to changing

customer expectations and government

regulations, but the road is steep and the

competition fierce. Stricter consumer privacy

regulations add layers of complexity to digital

initiatives. Meanwhile, digitally native fintechs are

rewriting the financial services playbook. FSIs need

a laser focus on enhancing customer relationships

and experiences, redefining value propositions,

and optimizing business models and processes.

The Future of Customer Experience in Financial Services

Powerful customer engagement via mobile and other digital channels has become table stakes in financial

services. The need to support high-performing mobile sites and apps is a given when 77% of the adult

population owns smartphones. Financial services institutions (FSIs) must master mobile channels and

continuously evolve their full scope of digital initiatives to fend off competition from fintech upstarts in an

environment where customer experience trumps loyalty to traditional brands, especially among millennials.

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We greatly improve performance for marketing sites and storefronts, we significantly Pressure to perform

The financial services industry is

in full transformation mode in response to

changing customer expectations

and government

regulations ”

“

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The Future of Customer Experience in Financial Services

Businesses must adapt to changing consumer habits and expectations

Businesses that transform the digital customer experience get results

Today’s customers expect near-instant gratification and resolution. FSIs have a real opportunity to reinforce

their value and improve retention rates by delivering seamless experiences across mobile devices and

other channels (e.g., web to mobile). That means providing intuitive platforms and apps, self-service

capabilities, and click-to-call/chat communication, among other innovations. To prevail against nimble

competitors, FSIs must continue to leverage cloud-based technologies that enable the kind of experience

customers prefer: safe, seamless, reliable, and fast.

• Fewer than 50% of millennials see themselves

staying with their current financial services institution

over the next few years.

• Two-thirds of millennials (67%) are open to trying

financial services from brands they trust, like Nike,

Google, and Apple, that don’t currently offer

financial services.

It’s not enough to provide exceptional experiences just

for basic online activities. FSIs must prove themselves

by offering complex activities, such as applying for

a loan or configuring products. As institutions offer

ever-more complex digital transactions, the focus

on performance only increases. The reality is that

today’s engaged consumers—influenced by their daily

interactions on social media and other platforms—

expect all sites and apps to be high performing and

lightning fast.

In financial services, fintechs are promoting a

vision of a world without banks. Blockchains and

cryptocurrencies are funding transactions without

paper money or credit cards. Robo-advisers

are providing portfolio management without

managers. Mobile payments are turning phones

into credit cards. The ability of upstart companies

to provide high-performing web experiences is

not hindered by legacy infrastructure—or legacy

business models.

Customers have made their expectations clear:

They want a fast, seamless, immersive, cross-

channel digital experience that satisfies, and even

anticipates, their needs. This is especially true of

millennials, a generation quickly becoming the

dominant demographic. Combine millennials’

expectations of brands in general with their

fundamentally different banking and investing

habits, and it’s clear that FSIs must adapt:

customers. Fully engaged banking customers also

maintain more products with their bank — from

checking and savings accounts to mortgages and auto

loans — and keep higher deposit balances in their

accounts than less engaged customers with the same

products.

With a sharp focus on identifying and satisfying

customers’ preferences, FSIs can use mobile

and other digital channels as a springboard

for growth. Consider that in the U.S. retail

banking industry, Gallup found that fully

engaged customers contribute 37% more annual

revenue to their primary bank than disengaged

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The Future of Customer Experience in Financial Services

Hyper-diverse environments make performance and security a challenge

• Using multiple data sources to assess risk,

Atlanta-based Kabbage has developed an

underwriting process that enables it to lend

small businesses and consumers up to $100,000

in minutes.2

• When customers of Germany’s Fidor Bank apply

for a loan, they find out in seconds if they are

approved. The bank also enables customers to buy

currency online and make payments in a variety of

currencies through Currency Cloud — a multicurrency,

regulated e-wallet.3

Incumbent and startup financial institutions

that have committed to mobile and other

digital channels have achieved superior results.

For example:

• In the Netherlands, SNS Bank redefined the

branch concept by creating a network of

advisory-focused, cashless banking shops that

serve as a physical extension of the web. These

shops feature a “consultant style” mobile sales

force specialized in selling complex products

from both the bank itself and other providers.1

Businesses face considerable technological

hurdles, however, in creating compelling mobile

and web experiences, due to the challenges

inherent in service and content delivery via the

Internet. These challenges center on:

Device diversity: Fragmented audiences make

it difficult to deliver the right experience to

the end user based on device characteristics.

The sheer number of devices, browsers, and

operating systems available has resulted in

significant fragmentation—approximately 24,000

mobile device types (and counting) access

Facebook every day. In today’s landscape, there

are countless permutations of users accessing

content, with each user expecting the same

high-quality performance.

Connectivity: Location impacts connectivity, whether

via hardwired, broadband, Wi-Fi, or cellular networks.

Connectivity issues are particularly acute for mobile

customers, who endure the limitations of the so-called

“last mile.” These include poor cellular throughput,

dropped connections, and limited handset processing

power and memory.

Security risks: Not only do FSIs need to be concerned

with delivering exceptional experiences reliably and

quickly, but they must also leverage powerful cloud-

based tools to protect the customer and themselves

during a time when cyberattackers are targeting the

financial services industry more aggressively than ever.

What it takes to power digital engagement

Building and supporting the digital experiences

that cater to this fragmented and constantly

evolving landscape can be costly and

complicated for in-house IT teams. To deliver

mobile experiences that are secure, fast, and

reliable, FSIs need to leverage an intelligent,

scalable, distributed cloud delivery platform

to serve content while optimizing performance and

providing sophisticated security. Here are three key

components to meet customers’ mobile expectations:

Make it seamless. By gathering data from cross-

channel and multi-device interactions for analysis, FSIs

can recognize recent activity and deliver personalized

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1 McKinsey & Company, “Banking on customer centricity: Transforming banks into customer-centric organizations”2 Ibid3 Ibid

The Future of Customer Experience in Financial Services

real-time optimizations for device, browser, and

network settings.

Mitigate cybersecurity threats. Today’s online threats

continue to grow in size, frequency, and sophistication,

putting FSIs at tremendous risk of reputational

damage, diminished IT productivity, and revenue loss.

With distributed denial-of-service (DDoS) incidents

and web application attacks gaining scale, financial

institutions and their customers need reassurance

that their data and digital properties are safe. Security

measures must be applied from a global-scale cloud

platform that has the capacity and intelligence to

protect FSIs from formidable external threats.

services, offers, and promotions in every session.

Cross-channel consistency is critical for meeting

(or surpassing) customer expectations and

cultivating loyalty.

Ensure high performance. An advanced cloud

delivery platform will ensure that websites and

apps are always available and that every

customer will enjoy optimal performance,

regardless of location or device type. This

requires the presence of web and application

servers located around the world, close to end

users and the content they need, along with

FSIs that optimize performance and availability, while satisfying expectations for high security, stand the

best chance of retaining customers and attracting new ones. The task is too large for institutions to tackle

alone; they need to partner with a cloud delivery platform provider that can help manage the risks and

complexities inherent in digital service delivery.

Conclusion

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The Future of Customer Experience in Financial Services 6

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to change without notice. Published 05/17.

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