“SERVICE” – Our Last Name, Our First Priority!
“SERVICE” – Our Last Name, Our First Priority!

Why Digital Banking Should Include A Human Component

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As digital technology continues to ease consumers’ lives, it is important not to forget the human aspects that can drive engagement, loyalty and brand satisfaction.

Technology has vastly revolutionized the way we communicate both personally and professionally. According to the latest statistics published by Statista and Hootsuite, the number of Internet users exceeds 4.1 billion globally. The number of mobile phone users is forecast to pass five billion by 2019 .

Not surprisingly, most of the growth can be attributed to the increasing popularity of smartphones, with over 50 percent of mobile users owning smartphone in 2018. With such a significant reach, it is no wonder that businesses are desperately trying to transform themselves digitally to capture the attention of their ever-evolving customers. Being digital-first is no longer a nice-to-have, but a must-do in order to survive.

In the new digital era where consumers live a continuously connected life, they expect information to be available when they want it and how they want it. Financial services is no exception.

Missing the Mark

However, successful enterprise transformation must go beyond front-end digitization. As Celent noted in their recent blog post, “The bulk of digital-banking activity has been around facilitating a growing variety of convenient, low-friction transactions. Investments have been aimed squarely at making the experience faster and more convenient.” One could argue that this focus should have had been table stakes from the beginning of any digital transformation effort as well as a (renewed) focus on improving customer experience and acting a trusted advisor.

Hope is not lost; as the customer was on prominent display at Finovate Fall in New York City. Of the seventy-eight startups presenting, customer experience was the most noticeable theme. Consider the following startups – each which were among the five best of show winners.

Bond, based in Arkansas, is a human-centered conversational artificial intelligence (AI) platform that seeks to understand consumers’ financial goals, and help them get there by optimizing spending, savings, and investment. UK-based Meniga, seeks to help banks personalize the digital user experience and develop sustainable meaningful engagement. When it comes to the human aspect of financial services, the most remarkable of all is Golden, a fintech startup focused on improving financial well-being of older adults through inter-generational solutions.

The Winning Strategy

Just as technology can help to improve operational efficiency and bottom line, it can also be leveraged to provide personalized products and services that benefit the customers. To not risk becoming a dumb pipe and losing customers’ trust and loyalty, banks and credit unions must commit to a new engagement model that focuses on the human touch and solving real problems.

The bar has been raised, thanks to competition from both inside and outside of traditional financial services ecosystem. Today’s consumers are expecting the same simple, personalized, and seamless transactions from their financial institutions as they do from big techs such as Apple and Amazon. Fintech startups, on the other hand, are gaining momentum as they focus on customer-first and providing consumers with relevant alternatives to traditional banking services.

New entrants such as Boston-based Envel seek to disrupt the incumbents’ business and engagement models through transparent offerings and a laser focus on improving consumer financial well-being leveraging artificial intelligence (AI) technology and behavioral insights. The momentum brought by the startup ecosystem could further spark the industry to rethink how best to service their customers through agility – from technology and operations, to culture and corporate mindset. It will also require a focus on the basics of financial services: customer-centricity.

Act as a Trusted Guide for Consumer Financial Well Being

Mobile technology allows consumers to gain greater awareness of their financial situation. But the buck doesn’t stop there. By leveraging data analytics and AI, financial institutions can proactively provide insights and take actions to improve consumer financial well-being.

Through techniques such as gamification and principles of behavioral science, the industry can extend beyond their traditional role of being the keeper of assets, and provide trusted advice – to help steer consumers towards positive behavior with long-term, more significant financial impacts on savings, investments, and the proper use of credit.

Leverage Partnerships to Provide Personalized and Holistic Experiences

Creating and sustaining meaningful relationship with consumers will require financial institutions to rethink their engagement model. Through open banking platform, banks can partner with different organizations so that to act as the “intelligent hub” for their customers’ entire financial life and cater to different needs of their customer base.

While banks may own a lot of customer data, being able to leverage the information to create meaningful experience will require innovative thinking, system enhancements, and human-centered design. Some of these experiences will extend beyond financial services leveraging Open Banking potential.

While effective implementation of digital strategy is critical for banks and credit unions, human interaction cannot be ignored. Technology can be used to augment the human experience and empower both customers and employees.

A most common example is customer service; while chatbots and AI can be deployed to address most of the use cases, we must ensure that there are options for humans to intervene when needed, as well as human touchpoints throughout the customer journey to build trust and rapport.

Bots need to be trained to learn how to empathize, and understand regional and generational differences. After all, such technology should reflect a brand’s identity and can positively (or negatively) impact customer perception.

“Human & Technology” as the Foundation for the Future

At the end of the day, technology is just a means to an end. The winning formula is not about more or less shiny new toys – but rather, leveraging appropriate technology to meet the needs of customers. The future of finance is also not about having a pretty user interface or making small incremental changes.

Innovation in modern day financial services is about unlocking potential previously deemed unattainable, and serving demographics previously considered undesirable. It is about empowering individuals to take control of their financial lives, and creating opportunities to enable society as a whole to prosper – leveling the playing field for economic opportunity for everyone, not just profitable segments. It is ultimately about humans – and our quest to leverage the powerful combination of human and machine power to create a more equitable future that we can all aspire to.