Guest
Customer service at the front desk

Enable a Shining Customer Experience in Retail Banking

nada-mackinney-40x40

by Nada MacKinney

Digital Transformation, Cisco

In retail banking, customer experience reigns supreme. Bank executives place top priority on a customer-centric model, and their investments back that up. In a recent PwC report, 61 percent of bank executives positioned a customer-centric business model as “very important.” Seventy-five percent of banks are making investments in this area.1

Additionally, banking leaders know that a customer-centric model necessitates digital products and services. Deloitte noted that 93 percent of banks with a digital strategy stated that their objective is to enhance customer experience and engagement.2

Retail banks are offering omnichannel digital experiences that provide ever better customer experiences. According to a recent Cisco survey, bank customers favored offerings that deliver better advice (virtual financial advice, virtual mortgage advice, automated investment advice, etc.) and valuable mobile services (mobile interactions in the branch, mobile payments, etc.).3

Banks are also investing in virtual tellers and connected and targeted advertising.  Some are moving to white-label services. The possibilities for digitally enhanced customer interactions are almost unlimited. When combined and recombined, such interactions can drive powerful customer experiences that add convenience and efficiency—and ultimately lead to competitive new business models.4

Digital initiatives for retail banks are diverse, yet at the core is a common element: digital-ready infrastructure.

For banks, digital can be a balancing act

For banks, digital can be a balancing act

Digital transformation, digital business, digitization, and digital disruption are terms reverberating in boardrooms. There are many ways to phrase it, but this shift boils down to this: When digital technologies enable new business models, that’s digital transformation. For banks, it goes hand in hand with digital products and services to delight customers.

But the adoption of ever-evolving digital products and services requires a balance of interactions. On the one hand, banks strive to roll out functionally rich, user-friendly digital products, rivalling or surpassing their competitors’ offerings. Customers want to open an account online in less than 15 minutes, speak to an advisor from anywhere, and make a payment at any time. Customers want to conduct their business digitally—with no complexity, no hassle, and no surprises. 

On the other hand, banks strive to deliver best-in-class customer service that is a clear differentiator. If a digitally engaged customer has a problem, that customer wants to speak with someone who solves the problem immediately. That’s the balance of digitization with human interaction. The ability to find this balance determines which banks stand out from the crowd.

What does “digital-ready infrastructure” have to do with it?

What does “digital-ready infrastructure” have to do with it?

Peel back the exterior of the digital capabilities, and you will notice a common element. Digital infrastructure enables IT and operational effectiveness—in the call center, branch, or data center.

It is infrastructure expanded for hyperawareness.  It sees what is happening throughout the organization and in the marketplace. It promotes efficiency and opens revenue opportunities by simplifying operations, optimizing transactions, and tightening cybersecurity. It understands patterns of behavior among customers and staff, giving bank representatives the insights they need to act quickly.

A digital-ready infrastructure should have four main attributes: security, automation, intelligence, and simplicity.

"If one bank does not inspire confidence in security, customers will switch to another. This can jeopardize millions in revenue. "

Security

The threat landscape is changing extraordinarily fast. The growth in connected devices creates exponentially more targets.  Attacks are growing in sophistication. A bank gains enormous value through the expanding range of digital products. Despite these benefits, the potential exposure to risk grows as well.

The staggering costs of a security breach are undisputed. However, the cybersecurity perspective noted in a recent survey of finance executives, “Cybersecurity as a Growth Advantage,” stands out for two observations:

  • Customer trust is a precious currency.

    Lost business stemming from the erosion of consumer trust is the most feared consequence of a breach.5 The Cisco 2017 Annual Cybersecurity Report noted that of organizations that experienced a breach, 38 percent saw “substantial” loss of revenue (20 to 100 percent of annual revenue). That is sobering but not surprising. The surprise may be that 39 percent saw substantial loss of customers (20 to 100 percent of customers).6

    Financial institutions are built on customer trust. If one bank does not inspire confidence in its security, customers will switch to another. This loss of trust can jeopardize millions of dollars in revenue.

  • Cybersecurity can be “growth enablement.”

    Rather than looking at cybersecurity through a purely defensive lens, some banks see it as a differentiator that supports agility, innovation, and growth. Thirty-one percent of surveyed financial executives view the primary purpose of cybersecurity as growth enablement. Forty-four percent consider cybersecurity a competitive advantage.5

    Cybersecurity from this vantage point becomes a strength rather than a source of uncertainty.

"By 2020, 20 percent of operational processes will be self-healing and self-learning, minimizing the need for human intervention or adjustments. 7"

Automation

Banks are rolling out digital capabilities to be proactive, agile, and responsive to rapidly changing market demands.

Underlying these customer-facing services are millions of endpoints, thousands of virtual machines, and hundreds of applications being connected—even as IT staffing remains flat. It is becoming almost impossible for IT to manage anything manually because of the scale and complexity of banks and their networks and real-time response expectations.

To make the most of all these connections, banks need an IT infrastructure with extensive automation. An example of automation is policy-based networking. It can help ensure levels of service that would be expensive and difficult to achieve manually.

With policy-based networking, large volumes of data, voice, and video traffic automatically get the availability and bandwidth needed to attain stated business priorities. Policy statements can specify that the network automatically deprioritize or reroute lower-priority traffic to help ensure that customer-facing traffic delivers top response times. Automation like this increases the bank’s ability to provide excellent customer service levels and respond to market changes.

Intelligence

A primary benefit of digital transformation is the ability to unlock in-depth insights and intelligence from business processes to improve the customer experience. When you gather data from the people, processes, and things on your network and enrich that data with analytics, you can identify emerging customer needs, uncover trends, and innovate faster than competition.

A digital-ready infrastructure is the foundation, and embedded intelligence is a vital attribute.  It provides contextual awareness of customers, applications, and threats. It aggregates data from across the infrastructure to unlock business insights and predict failures. 

BforBank, an online bank launched by the Crédit Agricole Regional Banks, saw the direct benefit of such intelligence. The bank faced recurring IT performance incidents that negatively affected customer experience. BforBank struggled to pinpoint the source and nature of these malfunctions.

An application performance solution, AppDynamics, provided real-time analysis that illuminated precise details on bottlenecks, their locations, and their impact. This intelligence enabled the bank to make the right decisions at the right time to maintain excellent customer experience.8

Simplicity

As the Internet of Things (IoT) marches forward, banks are in the thick of it. They are connecting millions of endpoints and disparate data sources to fashion digitally rich customer experiences. Additionally, their infrastructures are becoming more dynamic and distributed with cloud, edge and mobile capabilities woven into bank operations.

All this leads to complexity. In the face of this, forward-looking banks are integrating processes and information flow and seeking ways to simplify their infrastructure.

Consider that a typical company has as many as 30 vendors for security alone. Rock-solid security is vital and justifies intense focus. Yet managing so many products brings added complexity. Today it is possible to extend connectivity from the data center and cloud to the network edge and every device—with both required levels of security and simplicity. 

Customers simply cannot look away

Because IT infrastructure undergirds superior customer experience, many banking business executives are working closely with their IT executive colleagues. They are forging a single conversation across business and IT with a shared vision of desired business outcomes. This single conversation reinforces that a digital-ready infrastructure is built for security, automation, intelligence, and simplicity. Moreover, this conversation reinforces that a digital-ready infrastructure is fundamental to creating an experience so compelling that customers simply cannot look away.

Explore this e-book to spark your thinking about jump-starting your digital journey.

Sources

  1. Retail Banking 2020:  Evolution or Revolution, PwC, 2014
  2. Digital transformation in financial services: The need to rewire organizational DNA, Deloitte, Deloitte Center for Financial Services, 2016
  3. The Advice Advantage: How Banks Can Close the “Value Gap” and Regain Customer Trust, Cisco, February 2015 
  4. Digital Vortex: How Digital Disruption Is Redefining Industries, Global Center for Digital Business Transformation, June 2015
  5. Cybersecurity as a Growth Advantage, Cisco, 2016
  6. Cisco 2017 Cybersecurity Annual Report, Cisco, 2017
  7. IDC FutureScape: Worldwide Digital Transformation 2016 Predictions, IDC, Nov. 2015
  8. BforBank case study, https://www.appdynamics.com/case-study/bforbank/

Explore

Digital transformation

Build your business' digital future with technology that helps you innovate.

Digital value in retail banks

Digital value in retail banks

Retail banks have strong opportunities to drive their own disruption and capture value.

Cloud for hybrid IT

Reimagine your cloud for a hybrid IT world.