If you’re reading this article, you know all about digital. As of 2014, more than 99% of the world’s information was stored digitally. That’s astounding, considering we’ve only enjoyed around 50 years of a digital world. Here James Sheldon of Experian confronts the issue of individual engagement and the importance of user interaction in today’s markets.
In an addition, despite internet-based banking being first introduced in 1983, it took until 2011 for it to become a staple way for the public to engage with banks. There’s a lag between the introduction of new technologies and new ways of doing business whilst society gets to grips with it – but when we do, the whole world changes – fast.
This is why it is important that a digital approach is considered beyond the technology that delivers it. Equally, it is important technology isn’t generalised as ‘innovation’. Innovation is derived from formulating a response and journey from the customer needs; technology to deliver should be a secondary point.
It shouldn’t need to be said, but in a world of apps and widgets, sometimes innovation seems to happen for its own sake, and not focused on customer need. As more people engage online they become used to rapidly evolving processes and become fast adopters of new ways of working. Yet their fundamental needs haven’t changed. They still want support to manage their finances – perhaps in a more convenient way than they’ve been able to before.
Digital processes, interactions and transactions
It doesn’t need an in-depth focus group to know that customers want fast, responsive and personalised interactions. Financial organisations know this, and in order to deliver, use digital as the engine and technology as the way to serve it up. A key element to consider is the difference in both interactions served by digital, and transactions made by digital.
To achieve real-time, personalised interactions, there’s only one method that will enable a business to achieve the rapid pace and total awareness: A single customer view.
How do you tailor your communications and add value to any interaction? By understanding who your customer is, their needs and their wants. Further elements such as understanding an individual’s future propensity for product needs, or pre-qualifying customers, add new levels of personalisation.
Equally, transactions should be customer orientated. It’s easier to implement and manage your own and your customer outcomes with automation and process optimisation, which digital processes provide.
Experian found 70% of businesses would admit they are ineffective at delivering an optimised digital experience across all of their touch points. It’s clear that there’s a way to go before businesses are properly aligned to their customers.
What’s the result? More customer churn (35%), and more customers abandoning their journey mid-way (26%). So all in all it’s clear that optimising a process can add value; from pre-defining credit limits to identifying what the best channel of contact is at the right time.
When it comes to mobile, Experian and Forrester research showed that in 2015, mobile commerce grew 38% and mobile devices accounted for 37% of all website visits. More than half of millennials said they need constant internet access on the go, and spend about 9.5 hours a day online. Their perception is that everything will be facilitated by mobile.
For a business, mobile use can also enhance understanding of customers, from identifying device usage for fraud detection through to understanding more about the individual for marketing and customer engagement.
Competition, customer insights, and making change
When Open Banking is introduced in 2018 competition will ramp up. More data will be available and there will be greater transparency on customer benefits. It’s possible that new entrants and fintech companies can capitalise on their youth and ability to adapt. For these firms, just as much as any other, focusing on building trust should be a priority. Open banking provides a foundation to deliver fast and personalised information that supports the customer, their applications and needs. It will impact multiple areas and roles, but it will also change what customers expect, changing their journey will become the future.
To respond to the challenge of adapting to this new era of the customer, organisations must be able to:
- Deliver a 360 degree view of the customer across the lifecycle;
- Fight fraud without compromising the customer experience;
- Break traditional constraints to serve today’s non-traditional customer.
APIs are one area where businesses are benefiting from true technology-led innovation. Data can add value to any risk identification and functions like ‘pinning’ can enable organisations to pin data to an individual, giving a true single customer view that is validated from internal and external data.
Our recent survey conducted with Forrester highlighted that eight out of 10 businesses consider improved customer insight to be their top business priority over the next year. Growth, cost efficiency and data security are further top priorities.
It’s easy to see why. After all, it’s no secret that merging offline and online processes can lead to friction in the customer journey, increasing costs and leading to missed opportunities. Two thirds of organisations recognise their top business priority is to integrate physical and digital channels better. Getting it right will create a solid foundation for the future.
Be holistic above all
As businesses embark on transforming customer journeys via digital delivery, the danger is that it is done at the expense of other channels. Businesses should adopt a holistic, omni-channel approach to maintain focus across all channels, side-lining none.
Customers are more comfortable interacting with companies across a range number of channels. As a result, they are demanding a seamless and consistent approach across each. Companies with true omni-channel customer engagement strategies retain an average 89% of their customers, compared to 33% for companies with weak omni-channel customer engagement. Customers are also expected to have 30% higher lifetime value.
With any change, businesses need to consider flexibility for their ‘back end’. Agile, flexible systems will enable quick and efficient delivery that supports change instead of stalling it from the point of an idea. That way, whatever the next channel, or technology of the future, businesses can be ready to embrace their next opportunity.
And speaking of embracing, many organisations are looking at their partnerships and finding gaps. As a result, it might be that new partnerships should be formed to deliver the end-to-end solution that’s right for the challenge. Such partnerships may see the end of disjointed, legacy systems and encourage those involved to combine expertise, offering a fast and comprehensive solution to satisfy the changing needs of customers.