Containing the sprawl of CX tech
By Ganpath Thanumoorthy, SVP Customer Experience, Firstsource
Why customer experience design is the natural remedy for the tech hype in Financial Services
It doesn’t take much for today’s customer experience (CX) -savvy customers to switch providers or shop around for better deals if they’re unhappy with a brand. That’s why banks, insurers, and other customer-focused businesses are keen to quickly leverage new tech capabilities and keep up with expectations. The problem is: the noise in the tech market is making it hard to tell real value from hype. CX design can show the way.
A customer going through a frustrating moment with a brand today is just as likely to get in touch with customer service (CS) as they are to vent on Twitter. For many, CX has become an important differentiator. Having had their expectations shaped by the pioneers in the space, consumers often effectively dictate the terms – by calling out bad service on social media, or moving to providers who promise to make things easy for them.
This is true especially in “high-switch” industries such as financial services (as well as utilities, ecommerce, and others) where retention is a key concern for the balance sheet. And it explains why CX today is increasingly linked to brand value. Smooth, delightful experiences aren’t just a nice-to-have; healthy customer relationships directly impact the valuation of a business.
A noisy tech market
It’s no surprise, then, that businesses are keen to use new tech capabilities to provide better service, run more efficient operations, and stay on top of the CX game. There’s just one problem: the CS/CX tech market has spawned so many new products (agent assist, conversational IVR, chatbots, etc) in recent years that it’s becoming increasingly hard for CX leaders to navigate the landscape. Add to that the hype around AI-powered solutions, and it’s easy to see that businesses are in danger of falling for fashionable tech, or of choosing solutions that won’t deliver for them.
The truth is: assessing, procuring, and adopting new CX capabilities is hard, costly, time-intensive, and potentially risky – especially when you’re integrating them with legacy technology. But not modernising isn’t an option either: the benefits – higher customer satisfaction, better efficiency, cost savings – can’t be ignored.
Customer Experience Design to the rescue
So how can financial services organisations modernise their CX operations without breaking their systems – or, indeed, the bank? In my experience, the best approach is designing customer experiences on the principle of “CX Realism”: instead of being led by a hyped-up vendor vision of a shiny new omnichannel world, approach the customer experience (re-) design with radical honesty about the sort of business you are, the tech stack you’re working with, your appetite for change, and what you’re trying to achieve.
Here’s why, in my opinion, it’s the better approach:
- CX design starts with a solid assessment of the status quo. That’s never a bad thing. You may want to bring an independent, tech-agnostic consultancy in for this. They will speak with customers and agents and analyse your historical CX data. By identifying the bottlenecks, error-prone processes, and sources of frustration for customers and staff, they can help you develop a target operating model and ideal future processes.
- Vendor visions aren’t tailored to your business. Vendors, by default, lead with technology. That means that whatever your challenge, they’ll believe their piece of tech will provide the solution. But what works for a business, like Apple, is unlikely to work for you. Take WhatsApp for instance: while it can be a fantastic way to reach retail customers directly, it isn’t currently a trusted solution for business-to-business adoption. Technology is only a means to an end.
By starting with your goals – for your customers, your operations, your bottom line – you’ll establish the benchmarks against which new tech will have to prove itself. To illustrate: we worked with a challenger bank whose differentiator is that it fully refunds defrauded customers. This meant its fraud response had to be set up to minimise response times and reduce the stress on customers in this worrying situation. The solution design for such a setup will naturally be different from than that for a bank with another priority focus. It might want to simplify the quoting process for their customers, improve compliance, or speed up KYC.
- This means that ROI, too, is highly individual. CX design that’s aligned to business goals will help you prioritise new apps and systems that promise to deliver the best outcomes – not just in terms of money but also other KPIs – such as Net Promoter Score (NPS), first-time-resolution (FTR), average speed of answer (ASA), or another one of your priorities.
- Realistically, you’re working with an existing tech stack. Unless you have an unlimited budget and plenty of time (which, let’s face it, who does?), your job is to complement what you’ve got, not replace it all. This will impact many of your tech choices in the final solution design. You’ll have to work with what makes sense, fills the biggest gaps, integrates best, etc. Experienced CX designers can help you sift through a crowded market and find the best fit for you.
- Tech can do a lot, but it can’t do everything. Not all of your challenges are going to be solved by technology. Automation, for instance, which is often touted as the miracle cure for broken CX processes, works best for simple, standard requests. For complex, high-value interactions, a well-trained agent is still often the best option. It’s worth taking those nuances into account when planning for new tech, journeys and processes. Again, this is something that a specialist consultancy can support with – to help you make realistic decisions and ensure that the customer remains the focus of your change project.
Sounds full-on…is it worth it?
In a large organisation, any re-design project is likely to require a bit of effort and has the potential to ruffle some feathers. But businesses that follow the principles of realistic CX design are less likely to fall for the hype – and more likely to see measurable outcomes from their change project. Here are some that we’ve seen among financial service providers:
- A foreign exchange (FX) provider significantly reduced client acquisition costs by embracing automation opportunities during acquisition and onboarding processes. This resulted in $3M total direct cost savings for the business.
- A fintech managed to automate Know Your Customer (KYC) and got onboarding to down from 24 to four days. It took the time to fully understand its disjointed manual processes, and the delays they caused. The business then implemented an onboarding platform that brought together several legacy systems and made use of intelligent automation.
- A household insurer boosted renewals and NPS, helping it to retain revenue. It was moving to a new IT platform, which, in combination with its external finance provider’s system, caused unwanted customer issues (e.g., duplicate payments). For them, the solution lay in fully outsourcing customer service and sales, which helped them hit mission-critical KPIs (such as upping complaints resolution rates, reducing after-call logging time, improving FTR) and not just retain customers, but also acquire new ones.
These outcomes may resonate with you – or maybe your challenges lie elsewhere. In any case, it’s more than likely that there is technology out there that can help your business provide better experiences at lower cost, while delivering deeper insight to you. I would advise before you commit to any new tech, take the time to figure out your goals, and identify your biggest challenges. Listen to your customers and agents. Trust the process, it will protect you from the tech hype – and lead the way to better, more considered customer experiences and processes.
How to identify the signs that your IT department need restructuring
Eric Lefebvre, Chief Technology Officer at Sovos
For firms to execute transformations and meet their overall vision, it is crucial that their CIOs are able to recognise the signs that their department is in need of some internal change. In the current economic climate, CIOs working to fulfil their organisation’s priorities and meet business goals might hesitate to acknowledge that their IT department needs restructuring, never mind be able to identify the signs.
However, these problems rarely fix themselves and organisational restructuring requires conviction and determination from leadership for it to occur successfully. So, what are some of the key signs that CIOs should look out for?
Struggling to keep up with industry demands
CIOs unsurprisingly are working in an extremely demanding environment at the moment. Meeting these evolving demands is crucial for companies. When demands are not met and not handled properly, this can have a lasting impact on organisational goals and objectives, and even impact the way in which transformations are put into effect.
Depending on the organisation’s structure, the way in which being unable to keep up with demands manifests itself can differ. Despite double digit reductions across the industry, the search for talent across the tech world continues, project costs continue to rise as the cost of labour has increased and schedules have been disrupted by significant attrition. Many companies will also find business costs, such as that of third-party software, are higher than planned and technology debt continues to pile up faster than it can be sunset.
Whilst leadership teams might dedicate their department’s attention on the factors discussed above, they may find that their team will fall short when it comes to timely deliverables and helping maintain your organisation’s tech stack and guide its business transformations. Looking beyond the immediate problems of high costs and considering an internal reshuffle may be the solution for many IT departments.
Internal conflict within the team
Organisational designs with underlying issues can cause constant friction, especially when they go unacknowledged. An IT department that lives in conflict will certainly be reflected in results and less than successful tech transformations. CIOs will find that by adopting an organisational design which works through staffing issues, will better innovate, especially if they can all work together.
Department leads should have a strong understanding of their team’s work environment and guide them through any long-term or potential problems. When an individual is working in a demanding or complex industry, working well with your team shouldn’t be the main impediment to innovation. By acting quickly to eliminate internal conflict, CIOs can better lead and ensure their team’s focus is entirely on producing more optimal outcomes.
Delays are commonplace
When a large amount of your team’s time is spent setting objectives, budgets and timelines for the projects they are working on, it is vital that they are met. When delays are coming from the IT department, they will inevitably hinder the development of any business transformation, especially if it prompts teams to spend excessive amounts of time rearranging budgets and timelines and therefore hindering innovation.
IT departments are a crucial aspect in many different parts of a company’s transformations, so remaining on track when it comes to timelines and innovation is critical to operational plans. If delays have become commonplace in an IT team, and external factors are impacting projects, CIOs should look at restructuring an IT department to solve these issues.
The strongest team relationships do not happen by accident and are the result of good planning, strong leadership and a motivated team. CIOs can ensure this by providing vision and long-term strategy with clear goals and objectives to produce high levels of quality output.
When internal issues are noticed in an IT department, and are noticeably impacting team morale or productivity, this should indicate the need for departmental restructuring. Be that due to an inability to meet market demands, issues with productivity and meeting deadlines or internal conflict, these issues all risk a department’s functionality and an organisation’s ability to achieve its goals. In short, don’t overlook the warning signs!
Top banking trends of 2023 and global outlook of banking and fintech for the year ahead
Author: Professor Marco Mongiello, Pro Vice-Chancellor, The University of Law Business School
You’d be forgiven for assuming that the global outlook for banking and fintech will be dominated by the usual suspects:
Artificial Intelligence – AI plays an increasingly prominent role in banking and fintech by enabling personalised services, fraud detection, predictive analytics, use of chatbots and robo-advisors.
Blockchain and Cryptocurrency – the secure, decentralised and swift system for financial transactions that blockchain has brought to the fore a few years ago, is now becoming ubiquitous. An increasing number of transactions are recorded through blockchains technology, primarily in the cryptocurrency market.
Digital Banking and fintech – accelerated by COVID-19 pandemic, the adoption of digital banking is a trend that will persist as customers have become accustomed to the convenience and efficiency of digital banking. Moreover, fintech enables access to financial services for previously underserved populations in developing countries or less affluent social groups in more affluent societies. This includes mobile banking services, peer-to-peer lending platforms, and microfinance solutions.
Open Banking – another global trend is the use of open APIs (Application Programming Interfaces) that allow third-party developers to build apps to facilitate customers’ access to financial data and services from banks.
Nonetheless, the challenges posed by these rapid changes are reminders that banking, an industry that by its very nature needs to be conservative, risk averse and solid, wobbles on the unchartered grounds of fast and turbulent innovation, where entrepreneurship instead thrives. The underlying rationales of banking and fast digital innovation are not incompatible but do need solid operations and thought-through decision-making to avoid causing catastrophic collapses.
The recent examples of Silicon Valley Bank, Silvergate, FTX and Wirecard are stark reminders that digital entrepreneurship applied to banking doesn’t just bring to customers the visible transformation of valuable new services, but also dents (perhaps as an unexpected consequence) the rationale itself of the role of banks in the global economy. Moreover, the central banks’ ability to contain the effects of single banks’ defaults is no longer a certainty, as experienced just over a decade ago and more recently. The markets’ sentiments are hardly reassured by the commitments of even the most coveted players, such as the European Central Bank, the Federal Reserve, and the President of the United States himself.
Regulators are lagging behind and their attempts to catch up may cause further seismic shocks to the global banking system. For example, another trend that is emerging is one of artificial intelligence decision-centres (i.e., decentralised offices of banks which take autonomous decisions on behalf of investors) outside the most stringent regulatory environments, enabling banks to operate globally more efficiently and more competitively. And we can expect that regulators will close the gap either abruptly, as it is currently happening in China, where private banks are subject to an escalation of regulatory and monitoring restrictions, or more gradually as it is happening in Europe and in the US.
The questions we face, as individual or trade customers of our high street banks, as direct investors or clients of managed funds, are whether banking will become more user-friendly yet, for our daily use but riskier, too, or is it simply becoming more efficient, transparent and also safer.
I’m afraid that the answer is by no means an obvious one. Therefore, caution, level-headed decision- making and critical thinking have never been as important as these days. Whether you are looking after your family savings or growing your pension reserve, the imperative is that you keep updated about the providers of the financial services you rely upon as well as about the general regulations that apply to your financial transactions. This is where, for example, you need to be familiar with your rights in case of cyber fraud, as well as learning how to minimise the risk of becoming a victim thereof. Also, taking additional steps to evaluate the credibility, solidity and reliability of the online provider of that app that was recommended by a trusted friend, may prove a very good move.
Similarly, whether you are the CFO of a medium or large company, or are a sole trader wrestling with your own business’s finances, you need to reflect on what you really want from your bank in the first place. That is before you started to be swayed by the whirlpool of offers of ‘opportunities’ to multiply your financial investments. Chances are that your initial approach to your bank was dictated by either a need for financing your working capital, as per your budget and strategic plans, or to find a safe place for your temporarily idle liquidity. Perhaps you were also after some basic treasury services such as swift payments and debt collection. Maybe some other financial services closely related to your business operations, e.g. factoring. The advice is to give very careful consideration to services that are more remote from your business, because the trend for the next years is that more and more of those will be offered to you. But many new services will disappoint those who, sadly, cannot afford financial mishaps as they look to run and grow their business.
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