Rob McElroy, CEO Sopra Steria Financial Services
Before the pandemic financial services providers faced an uphill battle to drive digital adoption amongst their customers. But since Covid-19 paused all physical interactions such as face-to-face meetings, customers were left with no choice but to embrace the newly implemented digital solutions replacing them.
Understandably, most financial service providers adopted a ‘one-size-fits-all’ approach to the digital customer journey because of the urgency to provide services to their customers. However, for many customers, these digital solutions will not be fit for purpose in the long term since they do not take into consideration individual customer needs across different times/moments in their lives.
As we emerge from the pandemic, one of the biggest challenges facing the financial services sector is: how do they build a digital experience that is accessible, inclusive and responds to the personal circumstances of individual customers?
Understanding and identifying vulnerable customers
Some of the latest thinking to guide financial services firms strategy comes from the FCA. According to its Treating Customers Fairly report published in February, a staggering 27.7m adults in the UK displayed characteristics of financial vulnerability during the pandemic. The guidance here is that providers must consider whether a customer is in, or about to be a vulnerable situation and respond appropriately, ensuring that each customer has the opportunity of a good and fair outcome.
The difficulty in identifying whether a customer is in a vulnerable situation are the characteristics and/or reasons behind them. A specific situation could make one customer vulnerable, but not necessarily another. It is therefore important to not only understand the specifics of a situation but also the context surrounding the situation for each individual customer.
There are two ways organisations can work to build up an overview of a customer’s vulnerability characteristics in a digital environment:
- Asking them directly through the digital journey to self-identify whether they have personal circumstances which may indicate they have the characteristics of being in a vulnerable situation. Some characteristics can be more obvious than others, for example a recent death in the family or job loss will represent a life event which put the customer in a vulnerable situation.
- Data is another way to identify when a customer has characteristics of vulnerability and can also be used to predict future potential risk of harm. As an example, transactional data from open banking can provide insight into a customer’s spending patterns and warn them against late payments, or expensive overdrafts. At an aggregated view, data could identify a provider’s customer base with low-income households and therefore potentially at risk of suffering from poverty premiums.
Once providers have a deeper understanding of the individual characteristics surrounding their customer’s personal situation they can adapt their products and services to provide a suitable, fair and good outcome for each customer.
Five steps to build an inclusive experience
How can banks and building societies create this inclusive digital banking experience ready for the future? Here are five key considerations:
- Understanding customer diversity – providers need to take the time to really get to know their customers and identify how they interact with their services. It is no longer good enough to apply blanket personas across a specific age group or demographic. Each customer’s needs and personal preferences must be considered in isolation and in turn presented with a service that meets their specific circumstances.
- Supporting around the clock, through multiple channels – providers must be able to support and present the same information via in person, mobile, and online channels allowing customers to pick a support mechanism, format and time that suits them best. Banks should take a proactive, preventative approach and adopt the attitude that if the customer asks for information, it is probably too late.
- Designing for all – banks need to make sure products and services are open to all customers, regardless of age, disability, background, or intellect. This will ensure everyone can receive the same positive outcomes across any channel they choose to interact with.
- Improving accessibility – Digital has provided increased access to products, services and support to many customers, but at the same time introduced new ways to exclude others. For example, algorithms in digital journeys and online decisioning tools can lead to providers inadvertently excluding others from certain products or presenting higher lending terms. Financial service providers need to review their ethical principles and identify where potential biases may exist. The more banks understand about their individual customers, the more they can measure the impact of their accessibility polices, and will be able to uncover whether a product or service is truly accessible via digital, phone or in person channels.
- Collaborating with the SME/FinTech market – banks and building societies who are open to collaboration and building their eco-system of partners are able to present digital tools or micro-services to certain customer groups and offer a more rounded, specific service offering to meet their needs and engage at the appropriate level. This can avoid a one-size-fits-all approach and means that the service and product offering can evolve over time in parallel to the customer’s individual needs.
Looking forward
For much of the population, the pandemic has caused significant concern around personal health, emotional and financial well-being. Moving forward an incremental approach to improving accessibility to products and services combined with a supportive partner ecosystem should be adopted. This will enable customer experience to become better over time and consider the different digital adoption needs of individual customers.
Ultimately, those banks and building societies who take the time today to examine their customer base and think about how they can deliver true personalised customer journeys aligned to their digital banking ambitions will find they are well placed for the future.
