As we look back on the past twelve months, we can say with certainty that banks and the financial industry as a whole were flexible, understanding and pivoted rapidly to help customers during the pandemic. Despite this, the industry has not been able to shake the perception that it is still focused on short-term profits over long-term strategy and relationships. The impact of this is clear in the trust and confidence customers have in banks and financial institutions with the Edelman Trust Barometer 2021 confirming a worrying drop of 10 points in trust in a few short months.
As a result, 2022 will be a critical year for banks and the financial industry to rebuild confidence and secure customer loyalty. The keyword here is confidence. While trust is often used as a brand’s key differentiator, confidence is different. Confidence measures the amount a customer believes their bank will deliver the experiences they want and need.
So how do financial brands and institutions go about rebuilding confidence? It requires a change of business strategy and culture where the customer comes first and products second. Monica Hovsepian, Global Industry Strategist for Financial Services, OpenText, shares her thoughts on how financial brands can build back confidence through data and technology
Delivering an omnichannel personalised and consistent experience
Banks will need to ensure they move away from inherently transactional business models around products and services and instead base their engagement models on an intelligent and proactive understanding of each individual customer.
Critically, that engagement and experience will need to be consistent regardless of how each individual customer engages with the bank or financial institution. If a customer banks on a laptop, computer, mobile phone or in person at a branch, the experience should be consistent and contextual based on both the relationship established and the behaviours of that customer over time.
The interesting shift we have seen most recently is around what customers are looking for when it comes to banks. At the start of the pandemic, people had to reassess their financial health and questioned what their bank did to help in this area. Then many reassessed all other aspects of their lives, including their finances. This has seen a shift towards values-based financial decisions, such as looking at the sustainability or diversity credentials of the financial company. What this means is that banks need to ensure they deliver the right experience to each individual; this encompasses everything from the channel they communicate through, the proactive financial advice they receive, to what information is shared about the business.
Embedding cyber resilience to reassure customers
The second critical part in how to rebuild confidence in customers is showing how banks and financial institutions are being proactive in tackling cyber-attacks. This is one of the biggest concerns for customers who are hyper-aware of the rapid uptake of digital channels during the pandemic. As a result, they are worried about how and where their data is being used or stored, and the potential of it being hacked.
There are now many new information security challenges emerging that impact upon cyber fraud activities. Take remote working for example; it has increased the potential for data leaks as employees are working with sensitive customer data on insecure home networks. This could expose their organisation and customers to fraud. Similarly, as Open Banking becomes more established, banks are using APIs to connect with partners and customers, exchanging information and broadening service portfolios. This increases the number of points of vulnerability. Furthermore, while banks might be well protected internally, their partners and vendors might not have the same levels of security. This could open a “back door” to the bank’s system – the so-called supply chain attack.
Unlocking customer confidence through data and technology
To deliver both the critical personalised experience as well as tackle cyber-attacks, banks and financial institutions require access to data and the right technology.
Access to the right data, at the right time, is key to understanding every customer and delivering the rich, personalised experiences they demand and expect. However, this is based on the permission customers give banks and institutions to use their personal data. According to an EY report, customers are willing to share personal data with their banks as long as they can see the benefit from this exchange. So, it is key that banks take this seriously and ensure they deliver deeper and richer experiences that don’t come at the cost of personal data privacy.
How do you deliver the right experience once you have access to the right data? It’s all about designing targeted digital strategies that leverage that data more effectively and you need a digital experience platform to do that. A digital experience platform will provide banks with a set of applications and tools that serve as foundation for continuous, connected customer journeys. These unified and integrated platforms will create, manage and deliver those individualised experiences across all digital channels.
In 2022, banks and financial institutions have an opportunity to build true confidence with their customers and cement customer loyalty. They can do that by ensuring they have the right technology in place, as well as access to the right data, to deliver personalised experiences and ensure cyber resilience. The time to act is now as building confidence stretches beyond just the provision of products and services.