Simon Rodway, pre-sales solution consultant, Entersekt
How an intuitive and secure messaging system can have an outsized impact on the bank–customer relationship.
Fierce competition in banking shows no signs of abating, but while cost-cutting and consolidation have characterised the industry for decades, a lot has changed in recent years, especially with the disruptive entrance of the social, retail, and technology giants. It’s not so much what you offer anymore; the game changer is how you make your offering available.
People expect from their banks what they enjoy about other digital services: highly relevant interactions that add value upfront and can be completed without much effort. To come out ahead in the next few years, financial institutions must go beyond simply “doing digital” and focus on the actual customer needs and preferences that self-service channels were intended to meet.
They must also communicate the value they can deliver through a more intelligent approach to technology and user experience design.
Stepping into the role of trusted advisor
Rich or poor, Boomer or Millennial, we can all benefit from a little expert guidance on money matters. Curiously, though, in the age of spam and robocalls, consumers say their banks don’t do enough to inform them of relevant products and services. Many people even express doubt about institutions’ commitment or ability to assist in financial decision-making and, ultimately, improve their bottom lines.
A trusted financial advisor is something missing in their lives, people insist, and analysts tend to see banks’ slow progress filling this gap as a serious missed opportunity. After all, traditional banks continue to score highly with consumers on trust and the security of their data, which is a necessary ingredient for a winning set of services promoting financial wellness. Data will determine what insights banks gain on their customers’ concerns and pain points; their grasp on the routes users typically take to complete tasks or make decisions; and the relevance and quality of their recommendations.
Some readers may have received notices from their bank that go something like this: “You have spent 30 percent more this year on entertainment than you did last year.” Although well-meaning, many of these messages are not terribly useful sent in isolation and without context. What if your bank coupled this insight into changing spending patterns with other data and diplomatically nudged you towards a savings vehicle, perhaps with a HD flat screen TV as a potential prize for early registrations?
This example may skate close to a sales pitch, I know, but imagine this communication taking place in-app with a call to action linking directly to a budgeting tool. That small addition might complete the experience in a satisfactory way.
By providing the accountholder with a fuller picture of their financial position and a direct route to the tools they need to make changes (if that is what they want), the institution signals that it takes their financial wellbeing seriously; that it is expanding its role from mere deposit taker to trusted advisor; and it invites them to engage more often on financial matters great and small.
It takes two to start a conversation
Adverts and marketing messages have their place, absolutely, but their formats don’t lend themselves to these more immediate interventions. They skew towards a different order of product, one that kickstarts an entirely new chapter in life: mortgage, retirement annuity, student loan. However jaunty the copywriting and light the design, they also feel different. They are less an extension of the moment than a break in it; less about everyday opportunities to make improvements and more about the faraway future; less about grasping an opportunity and more about a making a commitment; less about me and more about you.
In-app communications specialist Twilio has found that 89 percent of consumers want to interact with businesses using messaging services, broadly defined, with two-thirds preferring mobile-based services for that purpose. Eighty-five percent say they would like to reply to these messages or engage in conversations from that point – a markedly different experience to SMS or no reply emails.
The content of these interactions may have varied enormously in respondents’ minds, but the key words here are “interact”, “reply”, and “engage”. Consumers want a two-way communication channel that supports timely exchanges on matters that are important to them. It’s the difference between a welcome interaction and an annoying distraction.
Digitally engaged customers are happy and loyal customers. They sign on to more services, bring in more revenue, and are more likely to recommend their bank to friends and family. The effect is strongest on mobile. A survey by Citi has found that users of mobile banking channels felt better informed about their banks’ offerings and were more confident about their financial position in general than non-users did. This, said Citi, resulted in, “a more optimistic view that banks can help to better understand their financial situation, with 82 percent of mobile banking users feeling confident that a bank can truly help improve their state of financial wellness, compared to 62 percent of non-users.”
Nothing beats the mobile for a reliable, highly personal channel to the customer, one that cuts through the noise of daily life, can be securely accessed everywhere, and integrates seamlessly with self-service functionality in the banking app.
However, if financial institutions are to follow this new path, it’s vital they protect the sensitive transactions taking place across their various channels. Imperative to this is communicating prompts and actionable advice reliably and securely wherever a user might be. If they can guarantee this, over time they will invoke trust and reliance from the user, and significantly improve engagement rates, and make the bank-user dynamic simpler and safer.
HOW CAN BUSINESSES BREAK INTO MARKETS BEYOND THE EU?
Atul Bhakta, CEO of One World Express
The build-up and aftermath of Brexit impeded the long-term plans of businesses both in the UK, and of EU businesses trading to the UK. The heavily protracted negotiations induced a culture of uncertainty in business, with few able to adequately prepare for all the future trading landscapes left on the table.
Once a deal was struck, with just one week before the Brexit deadline of 31st January 2020, organisations were then left scrambling to improvise new processes to translate their operations to the new systems and avoid spiralling costs, shipping delays, and various other disruptions.
As a result, businesses both here and in the EU saw a substantial trading slowdown in the months following Brexit, with new rules on customs checks, lengthy tailbacks at ports, denser and knottier administrative rules and new limitations on visas for the workforce all contributing to a tense trading relationship.
Indeed, the Office of National Statistics (ONS) figures revealed a precipitous drop in trading immediately after Brexit, with UK exports to the continent plummeting 40.7% year on year to January 2021.
This is a striking decline, given the historically close economic and cultural ties between the UK and EU. Inevitably, this caused a lull in long-term confidence amongst UK businesses. Indeed, a previous study conducted by One World Express in January 2021 found that 25% of UK companies doubted that they would last until the end of the year.
Of course, Brexit is even now not a finalised issue – it will shift and evolve in significance and relevance as time passes and economies reshape; but the loss of confidence for businesses in UK-EU trade has been a tangible impact within the first year.
Accordingly, some organisations have begun exploring the scope for expansion into territories beyond the EU.
New opportunities attracting attention
As noted, the UK’s trade with the EU saw a sharp decline immediately following the formalisation of Brexit. While this decline has recovered steadily over the year, there has been an equally impressive parallel forming, as non-EU trade has remained mostly stable throughout.
Of course, UK imports from global markets have always remained at high levels, and when considering business growth and the economy as a whole, outward trade holds a heightened significance. On the export side of matters, ONS figures suggest that UK exports outside of the EU increased by 1.7% year-on-year to January 2021.
While a very modest increase, such figures indicate that international expansion could carry promise for business leaders, and hint at potentially lucrative opportunities within non-EU markets.
As 2021 progressed, it became evident that UK businesses’ appetite to explore opportunities further afield had grown. To take in the views of decision-makers, One World Express commissioned an independent survey of 752 business leaders in the UK, finding that 61% were either already operating abroad in some capacity, or had plans to expand into new territories over the coming year. More than six in ten (62%) reported Brexit as a key motivator in their decision to diversify beyond trading with the EU.
There was also some evidence that these plans were not solely in pursuit of the gains of modest uplifts in trade with non-EU countries. The survey found that more than two thirds (68%) of exporters had observed increased overseas demand for their products in the previous year, while 63% felt that markets outside of the EU were more willing to pay a premium for British-made goods.
The role of ‘Brand UK’ is significant here. For many years, products made in the UK have benefitted from the country’s reputation for high quality production and excellent service, which has driven a consistent rise in demand as emerging markets with high levels of consumer spending, such as India or China. In turn, UK businesses have found it easier than most to gain a foothold in new markets. Indeed, the majority (67%) of exporters reported their British brand had enhanced the reputation and demand for their goods and services when targeting international consumers.
Despite this innate – and highly welcome – competitive advantage, there are a number of factors UK firms must consider before diving in to unfamiliar markets.
The importance of planning
Many would be surprised to learn that a large number of businesses look to enter new markets with minimal planning in place. Notably, almost one third (32%) of exporters do not have such a strategy in place, which is likely to hamper the growth of British businesses abroad if left unaddressed. A crucial starting point for any international expansion plan lies in the research and relationship building.
Ascertaining the consumer preferences and audience behaviours in target markets, and forging appropriate connections with distributors, vendors, and ecommerce platforms, will allow firms to access consumers more easily, and in greater numbers, than marketing from scratch in unfamiliar territory. Encouragingly, according to One World Express’ research, 72% of exporters already include this in their plans.
UK organisations must also recognise the value of a robust and flexible logistics strategy. When products are being shipped to the furthest corners of the globe, there is a degree of risk if the finer details are not handled correctly. Delayed, missing, or damaged deliveries will erode consumer trust, and diminish the prospects of companies before they get off the ground. Accordingly, companies should ensure they have a transparent tracking system and efficient and user-friendly returns process. Investment in adopting the right software solutions to manage the shipping will create a streamlined and cost-effective process, affording firms the best chance at success.
Naturally, the EU will always be one of the UK’s most critical trading partners. However, as the dust settles on Brexit and the pandemic recedes into memory, the next few years present an interesting crossroads for the international prospects of UK businesses. With a tranche of new free trade agreements arriving in the near future, and international demand for Brand UK going from strength to strength, the scope for expansion into unfamiliar markets is growing apace. Provided business leaders get the finer details right, the rewards for bold investment in expansion could help charge a boom in the UK exports sector.
WHAT FIREFIGHTERS CAN TEACH FINANCIAL INSTITUTIONS ABOUT DATA COLLABORATION
Gabriele Albarosa, CEO, LiveDataset
Digital transformation can be difficult for any business, but in the financial services industry it can prove especially tricky. Replacing manual data processes is a big step, but in an industry so heavily regulated and audited, cohesive and comprehensive transformation is crucial.
Today, the challenge is no longer in convincing financial services organisations that they need to transform their processes and tasks; the vast majority understand the benefits of automating and streamlining their financial processes.
Instead, it’s about instilling the message that there is more to transformation than ripping out and replacing outdated technologies. A good financial transformation strategy must also take into account how these technologies are implemented, ensuring they integrate into an organisation’s culture, connect data and guarantee compliance, without completely demolishing the custom processes that employees want to use.
Little Fires Everywhere
While business transformation offers long-term benefits throughout an organisation, individual departments are often loathe to abandon the bespoke processes that facilitate day-to-day operations. Many organisations feel under pressure to transform quickly, and subsequently focus on how to get their employees onboard with a new solution rather than integrating every minute component of the old.
As a result, digital transformation efforts tend to bypass these disparate components, leaving small, potentially non-compliant hazards smouldering like little fires across an organisation.
These “little fires” don’t immediately represent a threat to business operations, but the lack of quality control, integration, and visibility of these manual workflows, means they’re inherently high-risk.
When a pressure situation hits the organisation, like a surprise audit, legal proceedings or new reporting demands, these processes become a highly combustible cocktail for non-compliance, lost data and human error.
Tackling the flames
Organisations need to tackle these little fires early on, rather than sitting back and hoping they will burn themselves out. But how can they be dealt with?
If you think of these small, unregistered processes as little fires, then your team needs to think like a firefighter — being fast, agile, flexible, and well-prepared for potential risks.
So how can CFOs, CXOs and Chief Transformation Officers bring this strategy to life?
- Be fast — don’t wait around for largescale digital transformation
There’s a common misconception amongst financial service organisations that before facing the issue, you need to wait until an overhaul of department processes or an in-depth audit. This could leave you waiting years for a solution that needs to be implemented in weeks, putting your department at risk.
Organisations must act with speed and address the issue head-on as soon as it has been spotted. Businesses don’t need to wait for largescale transformation; temporary or even permanent solutions do exist and can be tailored and installed immediately — targeting the issue before it becomes a bigger problem.
In my own business, we recommend a three 3-step approach to tackle these issue quickly: First, listening to an organisation’s business challenges to locate the most pressing fire. Second, build a working example for business leaders and decision-makers to evaluate. Finally, follow up with real-time collaboration to ensure that wider company processes don’t cause similar problems in future.
- Be agile and flexible — look for customisable solution that evolve over time
Organisations are ever-evolving, and so are the problems they face. However, some financial services organisations see the answer to these problems as a one-time, short-term fix. Working to put out these fires at speed shouldn’t stop organisations from considering how to prevent and deal with future ones. That’s why businesses run fire drills!
Financial organisations need forward-thinking systems that will work now and in the future, whenever they face their next data collaboration crisis. The ability to act in an agile way is fundamental to this sort of futureproofing.
Agile, flexible solutions will enable organisations to fight multiple fires, with the same systems, as time goes on. A one-size-fits-all approach won’t work here. Putting one fire to rest won’t prevent more from happening, and not all fires are the same (just try throwing water on a chip pan fire!) Every organisation has distinct needs and that means customised solutions.
- Be prepared — implement solutions before disruption occurs
To understand their weakness and subsequently prevent fires, financial service organisations must encourage employees across departments to hold an ethos of self-improvement. Preparation is key to success.
That means establishing a comprehensive understanding of the day-to-day routines of employees at all levels. It’s in habit and routine (one-off processes, keeping data on email, spreadsheets as systems, etc) where financial fire hazards thrive.
If new, more compliant technologies are to be installed, they cannot dismantle these existing routines. Flexible data collaboration solutions are needed that perfectly match the existing way of working. Achieving the goals of transformation without any of the disruption.
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