In the world of the ever-present bigtech, how have customer demands and behaviours evolved – not only in the retail banking space but also for those at the top end of town? What defines a great customer experience today? And, how do the wants and needs between banking customers and insurance customers truly differ?
We take a look at the final discussion featured at FST’s Banking Summit 2022, with panellists weighing in on the changing dynamics and behaviours of customers, including an unmet demand for greater self-service, how online retail experiences are fast bleeding into the institutional banking space, and why, in the battle to entice customers, incumbents should take a leaf from fintechs’ rapid service innovation cycle.
- David Rosenthal, Head of Customer Solutions, Transaction Banking, ANZ
- Nita Prakash, Head of Customer Service & Operations, BaaS, Westpac
- Sid Baidwan, Head of Strategy, Suncorp
Moderated by Luke Hannon, MC.
Hannon (Moderator): Start at a somewhat high level, let’s talk about customer behaviours. How are they changing? What have you seen that’s different?
Rosenthal (ANZ): So, by way of background, we’re in the institutional part of the bank and cover a wide range of different transaction banking needs. My area of focus today is covering that mid-market to larger listed companies’ space. There’s a lot happening in terms of changing customer behaviours. To a point made a little earlier, which resonated a lot…
[A]utomation is really front and centre in terms of what we’re seeing with customer behaviour.
Treasury operations are a very complex space, a lot of manual handling of payments, receipts, reconciliation and stuff like that. We’re seeing a real push from customers to get away from anything manual and really get through to that straight-through processing, having a direct bridge between their own back-end systems and our back-end systems, [enabling that] direct engagement.
There’s also a real push for us to get through to not only talking to the Treasurer about their priorities, but actually looking through to our customer’s customer and how are those needs and behaviours changing. We traditionally used to talk only to the Treasurer at large corporates and institutions; now we talk more to the sales team and customer experience teams.
And the question that we get challenged by is, ‘How can we make payments and receipts of payments almost invisible inside the customer experience?’
If we think of a rideshare app, you open your phone very quickly and you jump in the car, you jump out of the car. You almost don’t realise that you’ve made a payment. That’s what we’re being challenged to get to with a whole range of different industries.
Prakash (Westpac): For some context, I think Dave [Rosenthal] and I are going to cross over a little bit, because in the BaaS space, or business banking-as-a-service, we work with institutional partners and end-, or retail, customers.
What I’d say, particularly for retail customers, is that customer needs haven’t changed. They’re very clear about what they want: they want simple, they want accessible, they want convenient, they want the ability to reach out for help as and when they need it, and they want personal. What has changed, particularly in the last couple of years – and it’s a word you all know very well – is digital adoption. We’ve really seen that acceleration towards digital across all demographics. This isn’t just about our younger demographics who are digital natives, it’s across all demographics.
And as a result, the stakes increase, because customers expect a certain level of availability and convenience and everything at their fingertips, and to self-serve. One of the interesting things that we’ve seen come off the back of that is this trend towards what we describe as ’embedded finance’.
And embedded finance is really playing into that customer desire for convenience and seeing financial services and products presented at a point in need rather than the traditional, ‘I’m going to go into the branch and ask for my transaction banking account’ or whatever that might look like. An example of that is something like WeChat. So, WeChat’s got a huge messaging service, but if you look at what they do, they do payments and a whole range of other things embedded into that customer experience. Or even Apple Pay, which, if you had said to me ten years ago that I was going to be paying for everything on my phone – and actually I leave home now with with my phone because I can! – that’s another really great example of embedded finance. So, we’ll just continue to see the industry shift around that.
Baidwan (Suncorp): I think the WeChat example is addressing China’s very unique ecosystem. I’ve spent a lot of my life in that part of the world; I think that’s something that’s really tough to replicate. What I would agree with, though, is on the point of personalisation – ‘What’s right for me?’; there’s a continuum here. We’ve gone from ‘Give me the right product or service. Give me give it to me at the right price. Give it to me through the right channel.’ (The truth is incumbents struggle with it, and the ‘right channel’ is an incumbent issue. It’s not a digital tech start-up issue anymore, it is the default). But that’s all in the past tense.
What’s the future tense? Being right the first time. That’s really tough to get.
The customer wants resolution, they want product service right the first time, in the first interaction.
Traditionally, we’ve interpreted contact centres as being able to resolve things, but now it’s going to be artificial intelligence. How do you get AI-empowered tools always right the first time? And the same thing with the right journey; the last thing is going to be the right engagement, but it’s about the right meaningful engagement, because customers don’t have time anymore.
The biggest challenge in this conference for the three of us [on stage] is competing with your phones right now. And that’s true for every bank and every financial institution. So, how do you get that right and meaningful engagement? To me, that’s the threshold beyond the Rubicon. Honestly, it’s past tense; if we can’t resolve that in 2022, we have a problem.
Hannon (Moderator): I love the ridesharing example from David [Rosenthal]. You literally don’t know you’ve made a payment and things that are complex for our customers need to be simple.
Sid [Baidwan], I might stay with you with this one, because insurance is something that the industry has worked very hard to simplify. But how do you make the complex simple, both for the organisation and the customer?
Baidwan (Suncorp): It’s a challenge for the industry, and for insurance, a really big challenge. To me, a lot of it has to do with two things. One is pace over perfection. You’ve got to try out a few different things with customers, because you don’t really know sitting at an insurer or a bank in an ivory tower what’s going to work. Start-ups, what they’re good at, the famous ones, is understanding that they’re built on the failures of all the past ones. In insurance, one of the things we try to mimic – but we aren’t there yet I’ll be honest – is pace over perfection. And the second one is…
[While] the fine print in banking might hurt the customer, the fine print in insurance really hurts them.
When you have a customer calling from Lismore on the back of flooding and then you’re trying to tell them, ‘Sorry, you aren’t properly covered,’ believe me, that hurts deep, deep inside. So, in making insurance simpler, the one good thing is, if you put the customer at the heart of everything you want to do, you lead your workforce and yourself to make the right decisions, whether it’s in communication or, as I said, in pace over perfection.
Prakash (Westpac): I’d absolutely echo that. The one thing I’d add from a customer lens is in empowering the customer. So, for us, one of the things we look to do where we work with partners is really, ‘How do you help customers help themselves?’ And that means making functionality available, it means responding to feedback quickly and having that culture of continuous evolution, and really building on that ‘pace over perfection’-type concept you’ve just talked about, Sid [Baiwan].
Rosenthal (ANZ): That self-service piece, I think, is really, really important. And it’s something we grapple with very, very frequently.
For us, when a Treasurer or an operations manager is looking to cancel a cheque or do something very manual, the last thing they want to do is sit on the phone for an hour before someone picks up.
They want to be able to troubleshoot that in their own way, whatever’s going to be convenient for them at the time. So, giving people the ability to self-serve in a way that’s convenient to themselves is where we need to get to.
Hannon (Moderator): David [Rosenthal], for your business, especially being institutional, how are customers’ expectations changed based on their Amazon or their Netflix or their ridesharing experience?
Rosenthal (ANZ): I think a lot of the institutional space has been impacted just by the way we consume technology ourselves in our private life, personally.
The way we order our shopping online, the way we order rideshare, it’s very slick and very easy. That is now translating into the institutional space.
And the expectation is that the way that a Treasurer can engage with the bank is very slick and very simplified, in the same way that they order an Uber, for example. The analogy that we sometimes think of is parcel delivery. When you’re on Amazon and you order a parcel and you’re waiting for it to arrive, you can quite easily check exactly where that is at any point in time. Now, it might not always be exactly accurate and it normally arrives a bit later than we would have liked, but you’ve got that transparency.
What we’re seeing in the institutional space is an expectation that, when I make a global payment and I hit send and it disappears into the international network, that I can actually see where it is at any point in time before it’s going to land.
That’s something that hasn’t been there in the past, but the expectations are evolving in that space.
Hannon (Moderator): And from a Westpac perspective, customer demands and customer expectations, how is that changing retail customer banking wants and needs?
Prakash (Westpac): Your point’s absolutely right in terms of that expectation, because even if you work for an institutional organisation, and everyone in this room is in that category, you’re still retail consumers. And, so, that blurring between the boundaries becomes more and more apparent.
For us, what we found, ultimately, is that it still comes back to that end customer. And, so, working with the iconic partners that we work with, or focusing entirely on the end retail customer, ultimately everyone wants to deliver the right experience, that right service, and the right outcome for the customer. As long as you’re clear on the objectives that you’re looking to achieve, and you achieve that together, then you will get there. It’s just a question of the how and a real commitment to how you prioritise to make that happen.
Hannon (Moderator): Sid [Baidwan], this is a big question, but what components need to be in place to be able to deliver a great personalised customer experience? What do you build upon to do that?
Baidwan (Suncorp): I would say two things. One is the purpose of the organisation. If the purpose isn’t aligned to the customer, it’s really tough to motivate an organisation. I recall an interesting anecdote: Microsoft is probably one of the best turnaround stories in the last five or seven years, and the CEO spent five months creating just 13 words. Getting your purpose right is so, so critical, because that’s going to galvanise the organisation.
The second piece is – and I love to use an analogy – that any transformation consists of the heart, the head and the hands. So, getting your ‘heart’ aligned, that’s essentially a bit on purpose.
But the second thing I’ll quickly add is that very often people conflate doing the right thing for the customer with ‘customer obsession’.
Doing the right thing for the customer is perhaps making sure the fine print is read out. Customer obsession means really caring about the customer; that’s the hard part, and not conflating the two is critical. The ‘head’ part is, What is the galvanising metric? Is it NPS? Sure, it’s slightly dated, but it’s still a good metric. Is it customer value, which is a more forward-looking one, but the industry, both banking and insurance, is struggling with how you actually define it? And then the ‘hand’ is, How do you operationalise those metrics? So, a person sitting within ops or in DevOps would think, ‘Well, that NPS is not within my control’. So how do you break down that NPS into episodic NPSs, and say, ‘That’s the one that really drives the behaviour as a customer, which gives us this NPS?‘ So, to me, it’s solving those three things.
Rosenthal (ANZ): I would just add, I like that piece around customer obsession. It’s really critical to personalising the offering.
In our space, what we’ll often see is our ability to succeed is really our ability to understand the key drivers of what the customer is trying to achieve better than anybody else that goes and talks to them.
Really, what’s core to their strategy? What are they trying to achieve? It’s very rare that we’ll take a generic offering off the shelf and just pass it to the customer. We’ve really got to understand what their strategic drivers are and how we can tailor our offering to their needs. And one of the ways we do that is by understanding their industry or their ecosystem really, really intricately. What’s coming over the horizon – in a regulatory sense, in a technology sense, in all the different variables – that’s going to impact their business, and how can we be on top of those better than anybody else? To us, that’s how we bring personalisation to the table.
Hannon (Moderator): I like that we’ve got institutional and retail [representatives] on this panel, because one of the things I wouldn’t mind unpacking further, and you’ve scratched the surface, is in tailoring the offering individually.
How do you tailor on a mass scale? What’s the magic dust to take that more individually managed approach to a portfolio managed business?
Rosenthal (ANZ): It’s a tricky balance, isn’t it, trying to keep things tailored but also scalable? One of the ways we can attempt this – and it’s been mentioned a number of times today I believe – is just using data analytics in a much smarter way and institutionalising the tools and techniques that we use to understand a customer’s business, but do it over a much bigger scale, so that we can do it right across the portfolio. How can we have tools that scan the external environment and actually provide signals to the bankers, ‘Hey, this might be worth discussing with the customer!’ That’s something that is very personal, but hopefully scalable as well. But it’s not an easy problem to fix.
Baidwan (Suncorp): This is one of the greatest paradoxes, at least in the consumer space, because personalisation doesn’t necessarily mean a personalised product – and marketers would love to call it that; ‘Let’s have a million versions!’. But, honestly, most of us would have a mortgage or credit card here or an insurance policy; you can literally list the ten potential variants of these. The challenge is in finding out what it means for the customer. Go back to the right engagement or the right price. So, pricing can be individualised? Yes. The interaction can be individualised. Sure.
But in the institutional space, because of its nature, there is something to be said about customising products, whereas in a mass market, it’s less about creating a million variants and then struggling with the technology or the cost consequences from the CIO department on it; it’s more about the delivery, and really finding the one or two things that matter to the customer.
In the mortgage space, the biggest concern is turnaround time. If you can personalise that to a broker’s need versus a customer’s need, you’ve won a lot of the market. That’s an important nuance in retail.
Prakash (Westpac): From a retail customer perspective, for us, the magic really sits in that customer experience layer. The experiences that you create that a customer sees and using data strategically, it’s really picking those key points out which go, ‘I know you. I know who you are. I know what relationship you have with us’. And, for us, one of the things we think about in our business is also, when you talk to a human and you are interacting with someone, that you’ve got someone on the other end who knows exactly who you are, who’s gone and got that information and has it at their fingertips quickly and conveniently.
But it’s about delivering that experience in the moments that really matter to a customer. Because a lot of the time, particularly if we’re talking self-serve, a customer has that information at their fingertips. And that’s table stakes in terms of the expectation that they have. But it’s when they interact, that’s when you’re expecting to see that little bit of magic come to life. ◼
This is an edited extract from the Driving Meaningful and Personalised Customer Interactions in Banking panel discussion featured at FST’s Banking Summit 2022.