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HOW TO GIVE CUSTOMERS A SEAT IN THE BOARDROOM

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By Fabrice Martin, Chief Product Officer, Clarabridge

 

When a bank or financial services company directly uses customer feedback to make decisions at the executive level, it’s almost as if that company has given its customers a seat in the boardroom; however, just because a business is open to using customer feedback in this way doesn’t mean it has successfully done so.

 

Companies may think they’re listening to “Voice of the Customer (VoC) data,” but they must make sure their information is truly representative of the customer voice. Failure to address this subtle yet critical nuance can result in an organisation making decisions based on a limited understanding of the customer perspective.

 

If a company uses misleading data to make important business decisions, it will not be able to understand what the customer really wants. This reality can have devastating effects on a business’s ability to maintain a compelling value proposition and can put it at a disadvantage if competitors succeed in more effectively using the data.

 

To mitigate the risk of failing to consider customer input, businesses must first understand why certain metrics may be misleading and then understand how to turn accurate insights into action.

 

Understand when the data doesn’t show the full picture

Many executives in the financial services sector believe that relying on metrics such as NPS or CSAT provides a comprehensive view of the customer experience. In fact, an article in the Wall Street Journal states that the term “net promoter” or “NPS” was cited more than 150 times in earnings conference calls by 50 S&P 500 companies in 2018. But, as the WSJ article points out, this statistic fails to tell the entire story.

 

By relying on a single metric to capture the complexity of the end-to-end customer experience, senior executives can miss important data that impacts the bottom line. Businesses often measure NPS through surveys, but the results only reflect the views of those actually completed the survey and may be more likely to reflect the perspectives of those who had an especially good or bad experience. Therefore, the findings may not represent the views of customers outside of those categories, causing the company to overlook a potentially huge portion of its customer base and sacrifice relevant insights that could increase profit.

 

While executives may be mentioning NPS frequently, a sole reliance on this metric offers a very shallow and incomplete picture of how customers actually feel.

 

Listen to multiple sources of data

In order to broaden the types of metrics used to examine the customer experience, companies must look beyond the survey. Customers are using a variety of channels such as email, chat, calls, surveys and social media to interact with banks and financial institutions regarding issues ranging from checking an account balance to arranging a mortgage. They’re also sharing their experiences and communicating with other customers on blogs, forums and review sites. Regardless of the channel, it’s imperative that customer-centric organisations analyse them all.

 

By including feedback from multiple channels, businesses can access the unsolicited feedback their customers are offering and review insights that reflect both structured and unstructured data.

 

Through the process of analysing multiple sources of data, companies can ensure that the voices of all their customers are heard.

 

Integrate findings and enrich your insights

Once a company establishes a process for ingesting feedback from a variety of channels, it must integrate the findings from those sources. By looking at a single, aggregate view of the data, the business can begin to identify the areas where customers are satisfied and those which they feel need improvement. Then it can begin determining recommendations and action items.

 

Using this approach, a large banking customer determined that customers were finding one of its investment options to be confusing, and employees were also unclear about the product offering. The company promptly updated the employee training process and rewrote the product brochures to eliminate confusion and drive product adoption.

 

This example illustrates the importance of considering metrics beyond NPS and CSAT when identifying opportunities to create a better customer experience. It’s necessary to enrich the data by measuring characteristics such as sentiment, effort and emotion to really understand the entirety of the customer experience.

 

Insight into customer engagement, emotion, effort and sentiment also serves as a strong predictor of loyalty, which is vital for any bank. For example, research from Gartner shows that solving problems quickly and easily is the most successful way to build customer loyalty. The research also shows that 94% of customers are likely to repurchase after a low effort experience. By enriching the data and examining more nuanced measures of CX, companies can begin looking at the leading indicators of loyalty and satisfaction instead of the lagging ones.

 

Demonstrate a willingness to act on insights

After identifying accurate insights, banks and financial services organisations must act upon that information. By listening to customers at all touchpoints and integrating the findings, they’ve already taken the first step toward giving the customer a seat in the boardroom; however, it’s imperative that they demonstrate their commitment through action.

 

By putting a spotlight on initiatives that highlight the insights-to-action process, companies will encourage customers to trust that they are truly listening. This technique will also add an element of authenticity to the brand by sending the message that the company cares. It’s important for the business to incorporate some degree of visibility into the process and communicate its efforts to customers in order to enjoy maximum business and brand benefits while creating a better CX.

 

It’s always more effective to show customers that a business cares than it is to simply tell them, and customers will show their appreciation with revenue and loyalty.

 

Conclusion

To truly give customers a seat in the boardroom, banks should look beyond basic metrics, consider data from every channel, integrate findings and act upon the information. If an organisation follows these steps, it will make significant progress toward improving the customer experience.

 

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Business

Ransomware chokes COBRA: How AI-powered data analysis can support financial services’ plight

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By Toby Butler, Financial Crime Solutions Manager at Ripjar

 

Ransomware attacks are on the increase in the United Kingdom. Most of the British Government’s COBRA meetings have been convened in response to ransomware attacks, showing how cybersecurity breaches are as pressing as national emergencies and crises. The National Cyber Security Centre’s (NCSC) annual review found this year that the country was hit by 17 ransomware incidents that were so impactful they “require a nationally coordinated response”. That extends to the financial services sector, which saw an increase of ransomware attacks with 55% of organisations hit in 2021.

Where does this leave the sector and how can artificial intelligence and machine learning be instrumental in understanding the risks companies face against future ransomware attacks?

Toby Butler

Company information is being stolen and sold to different threat groups, who prey on the individuals in that organisation who are more likely to pay them. The UK is one of the most cyber-attacked countries in the world and the Government has been criticised for being “ill-equipped” to deal with this exponential rise of fraud cases.

 

Ransomware-as-a-Service

Ransomware is one of the most common forms of cybercrime. Fighting it has become one of the biggest problems that organisations today face during their everyday operations. For instance, Malware (malicious software) encrypts the files of a single computer, then works its way through an entire network to reach the server and inflict maximum damage. Company information is being stolen and sold to different threat groups, who prey on the individuals in that organisation who are more likely to pay them.

When these attacks occur the victims, more often businesses, are left with minimal options. If they have substantial backup solutions already in place, they can attempt to restore the encrypted data to their servers. But if that data isn’t already secured elsewhere, they may need to pay a ransom to the criminals behind the attack. Thereby allowing the business to function once again and restoring their reputation. The cost of paying the ransom will feel considerably smaller compared to starting a business again from scratch. Sophos’ State of Ransomware in Financial Services 2022 report found that 52% of financial services organisations paid the ransom to restore their data, the average remediation cost in financial services was US$1.59M.

Cybersecurity Ventures estimates that ransomware is set to cost global businesses more than $256 billion by the end of 2031. By that token, organisations need to be extremely mindful of the potential threats they may face. Businesses need to understand the methodologies these hackers use, to address the weaknesses within their domain and take measures to isolate and prevent further ransomware attacks from happening again.

 

The rise of WAMs

According to a recent report by security firm CyberSixgill, 19% of the 3,612 cyberattacks that took place in 2021 were traced back to Wholesale Access Markets – or WAMs for short. WAMs are, in essence, underground internet flea markets. These markets are where aspiring attackers come to purchase network access from threat actors – the individual or entity involved in carrying out the cyber-attack. Types of threat actors include insiders, cybercriminals, rival organisations, or even nation states stealing data.

WAMs sell access to multiple compromised endpoints (or pathways) for around 10-20 dollars. Researchers found that WAMs listed access to approximately 4.3 million compromised endpoints in 2021, which include access to both provider and enterprise software (for example, an organisation’s Slack channel) up to 180 days before the attack itself took place. This shows how long these compromised endpoints remain undetected without proper internal analysis.

 

How can Financial Services stay ahead of the curve?

The use of Artificial Intelligence (AI) and machine learning is undisputed across modern businesses and sectors, and continues to revolutionise processes across the board. AI is a significant player in the financial services industry, building the ‘cyber-wall’ against nefarious users. It gives organisations optimal insights into reducing the likelihood of a ransomware attack in the future.

Namely, AI and machine learning collects and analyses vast amounts of messy (structured and unstructured) data from disparate sources. The challenge for the sector is to understand the volume and variety of the raw data collected from any source to build better protection in the future.

Structured information could be best understood as the clear data we see in a table. For example, the following attendees made a business meeting: first name – Joan, surname – Smith, age – 46. But unstructured information is information presented in a complex manner. For example, ‘there were five people who attended the business meeting, one of whom was forty-six and called Joan Smith’. Naturally, due to the complex nature of the prose, it would be more difficult for a machine to process that data into a digestible format for further risk analysis. This is where AI continues to prove invaluable.

AI uses natural language processing to understand the information provided on the web. As the software continues to evolve, natural language processing reads the information in a way a human would to extract the key information from the text. By incorporating AI and machine learning within an organisation’s IT infrastructure, companies operating within financial services can be better equipped to handle cybercrime.

These tools are flexible and adaptable, they can be configured to analyse different types of data from different sources to curate key insights. This collated information provides a better analysis of the organisation’s exposure, allowing them the opportunity to get upstream in preventing future attacks. This kind of approach is essential to processing listings on WAMs.

The power to analyse data to identify weakness is vital in the battle against cybercrime. It gives organisations a better understanding into what they could expect to see in the future. Hosting the correct data, and with the analytical skills, financial organisations can gain a better understanding of the methodologies and weaknesses in-house that attackers use and exploit to hold them to ransom. Organisations can then use this as a reference to pinpoint compromised endpoints, giving them a chance to reduce access before this route can be exploited and ruin their business.

With cybercrime and ransomware continuing to remain prevalent, it’s vital that financial services companies understand how they can get ahead of the curve and build a robust security platform within their IT infrastructure that can withstand an attack. In 2022, a ransomware attack occurred every 40 seconds. The mindset for the sector needs to be one of when, not if.

Organisations need to be thinking about an attack now – before it’s happened. Pre-planning and preparing for the worst possible outcome from future threats and adversaries. The introduction of AI and machine learning in the fight against cybercrime is a must, and the sooner the industry gets behind in implementing AI, the safer it will be through the next decade.

 

 

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Business

SVEA BANK ACQUIRES AREX’S FINTECH OPERATION IN FINLAND

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AREX Markets, the data-driven FinTech company that drives financing costs down for SMEs and enables them to get paid quicker, has announced the sale of its Finland operations to Swedish payment and financing institution Svea Bank.

With the deal, Svea will further strengthen its position as a corporate financier, as AREX’s c.1200 Finnish customers and partnerships in the areas of financial management and financial management software will be transferred to the bank’s portfolio. The Finnish operation of AREX has financed over EUR 500M worth of invoices.

AREX’s Spanish and UK operations remain unaffected and remain focused on building embeddable financing products for third party platforms. Customers in Finland have been informed of their transition, and their contracts and service details will port across to Svea.

Svea is reshaping the playing field of corporate finance in Finland, and taking on the operations of AREX in the region is a natural step to strengthen their own business and at the same time offer AREX’s partners and customers an easy path to a wider range of services than before.

“Over the years, Svea has grown a lot also through business transactions, therefore acquiring AREX’s business operations in Finland was a good and natural solution for us. In addition, the deal is pleasant for us at Svea because the focus of our activities is to help partners and customers succeed – offering AREX’s partners and customers a wider range of services is exactly that,” says Pasi Väre, country manager of Svea in Finland.

The deal also brings new opportunities for AREX to focus on the UK and Europe in its roll out of embeddable financing products, which can be white-labelled by neobanks, ERPs and accounting software alike. The business is seeking to bridge the liquidity gap faced by most small businesses in the face of a recessive economic climate.

UK SME’s can continue to access AREX’s core invoice financing product through the Xero marketplace.

“For us at AREX, this is a great step: we are developing a stronger presence in the field of embedded finance, which is underpinned by our sophisticated marketplace software, our strongest point,” says AREX’s CEO, Airto Vienola.

“For the AREX team it was extremely important that we find the best possible corporate financier to take care of the business’ customers and partnerships in Finland. Svea convinced us with their customer and partner-centric approach”, adds AREX’s co-founder Perttu Jalkanen.

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