No small change

8th Aug 2017

In the latest issue of Customer Focus, Eric Leenders, Managing Director of Retail and Commercial Banking at the British Bankers’ Association (BBA), explains that while service will always be critical, the need to innovate has always been a constant for banks.  Now though, the sheer pace of change is an entirely new ball game. Here are some of the biggest takeaways from his comments.

It’s time to think bigger

Leenders believes banking has now picked most of the low-hanging fruit of digital technology, meaning bigger change is on the way: “The first phase of digital innovation – compressing data packets so you can do the same things much more quickly and efficiently – is drawing to a close.

“The second phase is to think about where you can put that data to work. Retail banking is just one example of an industry that has recognised the sheer volume of data its customers have been producing for them, and discovered ways of using that data to deliver better customer service.

‘The phase after that is innovation,” says Leenders. “It’s about what different and new ideas can be provided that improve service and are economically sustainable.”

Lifespans of services might be shorter

Some relatively new technologies are already on the way out. Usage of internet banking, so recently seen as the future, is now in marked decline in favour of smartphone apps.

‘The first generation of apps told you your balance,” Leenders recalls. “The next introduced limited payment functionality, and now there are some where you can apply for credit. Going forward, apps that carry budgeting tools, with prompts and alerts that you can pre-set to encourage you into different kinds of spending, will be commonplace. They’ll also undertake a degree of monitoring, not just giving you an alert if you’re going overdrawn.”

Competition law could instil a collaborative approach

Soon, Leenders predicts, legislation and competition remedies will prompt banks to co-operate more closely with others to bring customers new services.

He says: “We’re moving to an environment of open banking, where the transaction history on an account will be available to help others find ways of using the data to assist customers – marketing, budgeting, or a whole raft of different things.

“You might end up with almost a ‘bank-manager-bot’, looking for best offers and opportunities. These could become more and more sophisticated – moving from searching for the best rates to understanding your buying habits and suggesting the best times to buy certain things.”

Human interaction is still important…

Importantly, Leenders argues, digital innovation is not replacing human interaction, but is amplifying it. Customers now have access to features and services that were previously exclusively available to those at the higher end of a bank’s portfolio. Technology has enabled a multitude of joined-up services for customers, while also cutting expenditure.

“Some banking customers now have access to video call technology with a customer representative. This has meant that even if they’re not close to a branch, banks remain able to provide better levels of customer service and customer satisfaction.”

…but empathy is imperative

Personal interactions really matter – because, as Leenders points out, efficiency alone will never be enough to ‘move the dial’.

“There are hygiene factors and there are moments of truth,” he says. “The hygiene factors are “does my salary go in and do my payments go out when I want them to?” There are billions of those transactions – trillions of pounds moving around the system with metronome efficiency – and that would only ever deliver satisfaction, because that’s just the level of expectation.

“If something unfortunate happens – like a bereavement – and the bank is empathetic and makes everything straightforward at a difficult time, then that will demonstrate empathy and understanding for those difficult and exceptional events. There are very different dynamics that you have to unpick; there’s a more gentle slope than if you have lots of interactions.”

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