Reimagining consumer engagement model in banking post Covid

The banking industry is set to undergo profound changes post Covid. The most profound impact will be on the way of engagement with the consumers. Digital transformation programs that were underway have seen massive acceleration. Banking executives are on record saying they have fulfilled nearly 3 years’ worth of desired digital transformation mandate in less than 2 months post Covid. Thanks to the already advanced digital infrastructure, banks could serve consumers in a seamless manner. All possible consumer touchpoints like call centres, teller machines, payments dealt successfully with the spike in volumes. The success of digital initiatives in dealing with one of the most devastating public health/economic crises in the known history will give banks great confidence to continue with vigour on their digital transformation journey. How much can be achieved by breaking down the silos and having an innovative mindset is now clearly visible. The move of banking from product centric, branch and legacy heavy to a new consumer centric model focused on personalization and ease of engagement is on the horizon

In view of the rapidly changing business, technology, and sociological trends, we can expect a sea change in the way interaction takes place between banks and consumers. Here are a few scenarios that might play out in near future:

Appointment led visits to the branches: Post Covid, banks discouraged consumers to visit a branch in order to honour social distancing norms and also to grapple with staff shortage since large number of employees were working from home. Therefore, large number of financial institutions introduced visits to branches through appointment. This is a significant development and can become a routine feature in the working model of the banks. Banks have already made headway in moving almost all the routine functions like check deposit, bill payments, account opening and fund transfer to the digital mode. Branches and bankers can become more productive if they know the precise purpose of branch visit of a consumer. Consumers can also look forward to a tailor-made solution in a time efficient manner to the issue at hand as they will be served by the best equipped banker. The granular data on precise needs of consumers can be useful in future reach outs them with relevant messages. The biggest pain point in customer engagement is generalized communication and it can be avoided by making the digital identity of consumers more robust through specific inputs on their needs and preferences — a proposition that can be served partly through the data generated from the appointment mode

Amazonification of banking: Very few brands can boast of customer engagement that mirrors Amazon. The key to success for Amazon was the appropriate use of data to drive customer engagement and the resultant competitive differentiation. Consumers don’t just want to consume product or service but want the brands they interact with to know more about them and offer them personalized experience. Consumers are getting increasingly comfortable sharing data with the service providers. As per Accenture study, 60% of consumers would be willing to share personal data, such as location data and lifestyle information, with the financial service providers if it results in lower pricing on products or benefits. Banks are sitting on mountains of data but unable to stich it together to offer personalization at scale. In the present context when consumers are craving for customized solutions for the crisis related needs, very few banks are able to offer customized communication. As per a recent research by Capgemini, only 26% of the banks claimed to be making good use of data, a serious lacuna that banks would definitely like to fix. Going forward we can also expect banks to make rapid strides towards open banking as they will definitely need more partners to come up with innovative offerings and solutions on the back of data

Contact centres in a new avatar: Digital self-service tools and virtual assistants have become a norm and routine banking transactions are being well taken care of by these channels. However, consumers always look to get a helping hand from a reassuring voice from the other especially in times of pressing situations. This trend has been in ample display in the ongoing Covid crisis where contact centres, in few cases have been forced to send messages to the consumers to call back in 72 hours on account of huge call volumes. As Accenture notes, over half of financial institution customers rank call support as their initial channel preference for flexible communication with an opportunity to ask, explain, reason or negotiate. This leads to a bigger issue at hand — how to envision the contact centre. High attrition rate, low motivation levels and inadequate monetary incentives have long plagued the contact centre capability. As we see shift of normal transactions to self-service mode, the contact centre needs to undergo a major transformation. First, it needs to attract talent, not difficult if better and specialized training is offered to the employees — why can’t they be seen and groomed as service experts, accompanied by good remuneration. Secondly, increased collaboration between contact centre and marketing will lead to better outcomes in terms of better customer outreach strategy and enhanced role of contact centres; the precise customer data collected by contact centres can be used for spotting trends, identifying risks in products & campaigns, and strengthen marketing efforts. Lastly, the virtual capabilities need to be improved to ensure flexibility for contact centre staff; they can be more productive if they are allowed to decide their work location based on the expected volume of calls

Banks need to be thinking about the best customer engagement options post Covid. Institutions that have focused on digital transformation are undoubtedly in a good position to handle the rapidly changing consumer expectations; however, a major rethink of the role of branches and contact centres is on the horizon. The ever-growing need for precise insights on the consumers to meet the personalization imperative will push banks to invest the resources more prudently in branches and contact centres. As per a Deloitte survey, maximum number of consumers will first reach out to contact centres for their most pressing concerns like theft of card, transaction dispute and filing a complaint, however paradoxically contact centres rank lowest in customer satisfaction among all the channels. In fact, digital intervention can make agents better at their job; US insurer Allstate is using a digital assistant in its contact centres to help agents better serve customers by having better understanding of customer sentiments and context. In order to do a better job in the consumer engagement, banks need to make bold changes to the way they measure performance. For the contact centres, instead of focusing mainly on the average call handling time, shifting the emphasis on effectiveness of customer service will help tremendously; Citizens Bank decided to minimize the number of calls it took for a customer to reach to a full resolution, targeting a “first-call resolution”. For branches the focus needs to shift from selling to the relationship building; Wells Fargo’s aggressive and unrealistic sales targets led to needless pressure and harmed the reputation as the executives mis-sold products to meet the targets. Finally, all out efforts need to be made to build a unique digital identity of the consumers that can capture the contextual nature of their life and help banks interact with them in a meaningful manner