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Competition has never been more fierce in the banking sector. Digital disruptors and innovative fintechs are on the rise, enticing consumers with their intuitive customer experience and novel products. Expectations have never been higher.

These days, more and more customers are looking for a seamless omnichannel experience—yet only 27% of consumers consider their banks to be up to the task. Worryingly, however, a reported 55% of banks are said to “lack digital maturity”, with just 12% being considered “digital leaders”.

To survive, banks and other financial institutions must digitally transform. There are two primary reasons why this is so crucial: improving their customer experience, and safeguarding long-term revenue growth.

And this needs to be an organisation-wide, holistic effort—a reported 85% of banking executives believe their own corporate culture is the primary barrier to successful digital transformation.

To begin with, the first step is for banks to adopt a customer-centric mindset by mapping out their customer journeys. This will help them step into their customers’ shoes, identify potential problems, and begin working on novel solutions to make their lives easier going forward.

Let’s explore how and why banks should approach the process of mapping out their customer journeys.

The digital innovation imperative  

Innovation is all around us. The last decade, particularly, has seen the rise of the cashless society. And that’s not all. Nowadays, consumers can log in any time, at any place, to see their balance and manage their account—instead of waiting for their monthly statements to appear in the post or having to head into a branch.

But just because face-to-face interactions between banks and consumers are plummeting, that doesn’t mean that consumers care any less about their banking experience—in fact, far from it. It’s been reported that the average consumer has 17 interactions with their bank each month. Therefore, you need to make sure that each of these interactions is seamless, smooth, and makes your customers’ lives easier. In other words, they improve your customer experience.

This is especially important when you consider that 32% of consumers will walk away from a brand they love after a single negative experience—and that 75% of all banking consumers consider their customer experience to be the most important factor when deciding whom to bank with.

Moreover, the effects of COVID-19 mean there’s “no going back” for European banks, according to McKinsey. Enforced lockdowns meant that banks were forced to roll out innovative, agile solutions at speed, leading to a 72% uplift in FinTech apps across Europe. Having been engaged in digital services, consumers are unlikely to accept a return to the old, comparatively less agile, ways of working.

As a Senior Managing Director, financial services digital and analytics at Accenture, says: “If a bank does not have a credible digital strategy, it is unclear how it can grow its earnings or protect its margins. Digital transformation enables banks to reach new sets of customers with a modern product set that protects margins and also creates new revenue streams.”

Common hurdles 

Unfortunately, there’s a significant disparity between knowing that you need to digitally transform and executing strategies that have the desired impact.

According to Banking Hub’s study on digital transformation amongst European banks, 68% agree that top management has a clear understanding of both the challenge and strategy behind digital transformation—yet 30% believe progress is stalling due to a lack of focus, and 45% blame an insufficient implementation speed. Most worryingly, just 19% consider their managers to be digital leaders.This means that you can’t simply look internally for the answers.

We have seen changes in customer behaviors and experience due to COVID-19. There’s only one way you can begin to digitize your customers’ experiences: mapping out their current journeys and identifying potential areas for improvement.

Mapping your customer journeys

Every bank wants to be customer-centric, but few know how to do this. The first step is to make sure that you understand your customer experience.

By mapping out your customer journeys—whether this be the process to set up a new account, apply for a loan, make mortgage repayments, or recover a forgotten password—you’ll learn everything you need to know about your customers’ experience of banking with your organisation.

These maps will allow you to identify (and swiftly respond to) changes in your customers’ experience, guiding new product/service development going forward. They will help you answer several key questions:

  1. Who are your customers?
  2. What do they want from you?
  3. What do they experience when dealing with your bank?
  4. How do they get in touch with you?
  5. Where are the delays and hurdles?
  6. What makes them frustrated and what makes them happy?
  7. How is this changing?
  8. What problems they might be facing now and how can you help them?

Your customer journey map should clearly outline the entire end-to-end process for any given scenario. For instance, if you’re mapping out the journey for a new customer to set up an account, then this should start with the moment they walk in the door/visit your website/speak to an agent and end with the moment when their account is fully set up and ready to use.

If you’re unsure as to how this should look, check out this example below based around a customer recovering a lost/forgotten/stolen password

customer journey map

Image inspired by visual-paradigm.com – Source: Link

Analyse, identify, and plan

But it’s not enough to simply map out the process. Once you have a holistic view of your various customer journeys, you can then begin to analyse your existing processes: identifying what works, what doesn’t, and where there’s room for innovation, before devising a plan for the future.

When analysing your existing customer journeys, try to identify if there are any areas that could be digitised. For example, Lloyds Bank now has its own Amazon Alexa integration—meaning that consumers can now access their bank information by uttering a single sentence to their home’s smart device.

Or take a leaf out of BBVA’s book, which reinvented its customer experience by rolling out Bconomy. This one-stop-shop app enables users to set goals, track progress, receive spending suggestions, and compare their spending habits to people in a similar financial position. In its first 3 weeks alone, the app had received half a million downloads—showing just how popular it is among consumers.

It’s perhaps unsurprising that BBVA is at the heart of such innovative new product development given their reliance on continuous customer journey mapping. According to Pepe Ollala, Head of Business Development (and leading the bank’s digital transformation process): “BBVA Compass’ goal is to map customer journeys for every product, channel, combination of channels and for every product through every channel and then constantly improve them.”

However, as well as drawing inspiration from the above examples, you should also make sure to stay on top of all your own digital transformation by taking into account the latest trends in the banking/financial services sector.

For instance, consider that 68% of financial services firms are actively investing in SaaS solutions, more than any other type of technology—and that most firms are investing in solutions that also leverage artificial intelligence (AI) and machine learning (ML).

As the old adage goes, “Success leaves clues”. While it’s important to develop your own capabilities, built with your organisation in mind and designed around your consumers, that doesn’t mean that you shouldn’t take notice of what your competitors are up to.

The time to innovate is now

Banks cannot afford to delay their digital transformation efforts. If they want to beat out the competition, retain their customers, and protect their bottom line, they need to start innovating immediately.

The first step is to map out your various customer journeys. By doing so, you’ll begin to understand customers’ hurdles and prepare your business with new capabilities to interact with your customers in innovative ways.

If you want to hear more about how you can digitally transform your collections process, leveraging AI and ML for maximum impact, check out our collections management platform today.

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