“There is no such thing as a fixed
360-degree view of the customer; today’s consumers are nomadic and, as a result, data mining and insights are constantly in motion.”
Today, customer success is measured not only on outcome but on the entire end-to-end journey. CX is evolving fast, shaped by customers’ interactions with data-rich bigtechs that are offering truly personalised experiences (think of your algorithm-built Spotify playlist or Google Maps’ hotspot recommendations). Customers, indeed, are no longer satisfied with a single good interaction – each and every experience, no matter how small, is now seen as part of a whole-of-life conversation, enriched through always-on, omnichannel, and increasingly predictive frontend services.
FST sat down with Alberto Sessa and Gavan Carroll, part of Oracle’s CX thought leadership team, to explore key innovation trends in customer experience (from digital assistants, eKYC and the evolution of the online form), the pressures of pandemic on current frontline services, and important lessons for FSIs in tailoring their services around customers’ most defining life events – those moments that matter.
FST Media: Financial services organisations have been quick to embrace many bleeding-edge CX innovations of digital leaders, particularly in bigtech. Yet, try as they might, they are still left in the dust of these digital pioneers, not to mention many fintech and neobank rivals. In an era of interconnected, omnichannel, and predictive services, what to you defines a successful customer journey within an FSI today?
Sessa: For me, customers are the real innovators, and their expectations are set by their day-to-day technology-driven life – from ordering an Uber to building a Spotify playlist. Brands need to focus on that to help differentiate themselves. In financial services, we know those customer needs are driven by life events especially; these are what we call the ‘moments that matter‘ – they’re moments that define everyone’s life. For example, when you go to university, you might need a student loan or a car. Perhaps you’re growing a family and you plan to buy a house next year. Maybe you’re going to travel again. In a few years’ time, hopefully you might retire. All of these ‘moments that matter’ in life are driving very important life events that FSIs need to track and leverage.
Now, there’s a catch, because these customer journeys aren’t linear and they’re not predictable. We know the stages of a mortgage origination process, for example, but it’s hard to determine what moment and through what channel the next interaction will happen. For instance, 43 per cent of consumers whose expectations are not met in a customer service exchange will stop doing business with that brand. But there is a clear opportunity here because 41 per cent of consumers are willing to pay as much as 20 per cent more for a better and more impressive customer experience.
In my view, to deliver a real-time customer experience, brands need to do three things. Firstly, they must make marketing more contextual.
Marketing today is more of a negotiated conversation
rather than a blast of brand messages.
Making the marketing part of it somewhat invisible is a concept we’re bringing forward: we might call it ‘invisible contextual marketing’. The second is service. Customer service must be proactive: we need to anticipate service needs before they become frustrations. And the third area where we believe brands need to invest is digital selling, both online and through sales representatives. Selling must be about configuring choices and giving customers the freedom to buy how they want. This is my vision for a successful customer experience journey.
FST Media: Do you feel there is a particular roadblock getting in the way of FSIs achieving this ideal CX state?
Sessa: It’s not an easy task addressing the broader aspects I’ve just described; there are several dimensions. Traditional banks and insurance carriers are challenged by new players that are leveraging the latest technologies and the power of digital to propose differentiated, innovative, and outstanding experiences that are driven by new business models. If you think about companies like TransferWise or Revolut for remittance-type services, or in Germany (where I look after several institutions) with N26 – a challenger bank that allows customers to create an account in a few minutes and receive a credit card at their door in 48 hours – these provide great examples that traditional banks and insurance carriers should try to follow. In the insurance space, Lemonade, based in the US, allows customers to insure contents on-demand for just for the time that they need. This is a good example of a new and innovative business model enabled by technology: with a few clicks, you can log a claim from your smartphone and get it approved and paid within a few hours. It’s very different from traditional insurance carriers’ services. The workaround in order to be able to implement something like that and to follow the same model is to create an open ecosystem – similar to how PSD2 drove the EU’s own open banking initiative.
In this context, I believe FSIs need to invest in frontend CX platforms to effectively differentiate their experiences, leveraging the power of first-party, second-party, and third-party data. They also need to gain agility by leveraging the power and flexibility of platform-as-a-service solutions. This will help to support their ecosystem and integration into legacy processes and systems – a burden that many incumbent organisations have. This two-fold process will allow businesses to achieve lower total cost of ownership and a faster go-to-market.
FST Media: After the fallout of Hayne and more recently the AUSTRAC AML breach scandal, customer trust in Australian FSIs has taken a substantial hit. As such, compliance has become a topline priority for the industry. How can the industry utilise technologies (or indeed regtech) to better enforce regulatory compliance and curtail employee malpractices or blunders that result in non-compliance?
Carroll: The Hayne Royal Commission has so far resulted in $1.5 billion in remediation being returned to customers, with that total expected to hit $10 billion. That’s a lot of money to say the least. What’s just as interesting is that, more broadly, $65 billion was paid out by US and European banks in 2014, a big year for fines due to breaches of regulatory compliance, which at the time were up 40 per cent year-on-year. And if you take a subset of compliance and look at AML, or anti-money laundering, you’re looking at $10 billion last year – double the amount from 2019 – in fines.
Having outlined the significant issues and punitive reprisal that can occur, we have to ask, what can the industry do about it? In my opinion, organisations need to more accurately reflect the rules of the regulators, especially as those rules change, and then to be able to do it quickly. What this means is that key components of your applications, to an extent, become subsets of the regulators. If you can get those business rules set up correctly and have those rules understandable by the subject matter experts, I think those fines could decrease significantly. Correct adherence to those business rules may not be all of regtech, as you alluded to, but it’s certainly a critical and defining part of regtech.
FST Media: Is there value then in looking beyond internal systems refurbs and seeking out regtech innovators who may be better equipped to enforce the watchdogs’ strictures?
Carroll: You can, but I also think there’s a lot FSIs can do within their own systems to make sure there’s more compliance and greater regtech functionality. There are probably niche players out there, but there are certainly business rules capabilities that can do a lot of what regtech players do.
FST Media: Looking to what’s currently blanketing news coverage, Covid-19. As the world faces the economic and social impacts of the pandemic and its aftermath, what can FSIs do to effectively adapt their services to a post-Covid reality?
Carroll: The impact of Covid-19 on the financial sector and indeed all sectors has been and continues to be quite extensive. From an initial response, lenders were scrambling to adjust their loan terms. And, to be fair, the banks, certainly in Australia, were quite helpful. As our recovery gets underway, there’s every chance there could be a recession, which means FSIs will need to continue to expeditiously adjust their product offerings while continuing to adhere to regulatory authorities, as we mentioned before. So, again, a flexible and business-friendly capability to harvest, maintain, and deploy those business rules is of paramount importance, perhaps more than ever. Things like loan calculators, origination, underwriting, subrogation, et cetera are all going to need to be more flexible than ever in the current climate.
FST Media: Do you feel in this current crisis organisations have effectively ramped up their services to meet surging demand?
Sessa: So far, so good. However, the reality is that many customer requests have not been addressed completely. We have some great examples where our organisation helped government institutions in the US address the requests of people in need. We were able to set up a solution in a matter of days and within a week government organisations were able to address an end-to-end process that went from a digital request from a customer – identifying the customers, specifying their needs, options, and eligibility – and addressing the provisioning and the fulfilment of the request through a process orchestration in the back office. It’s definitely not an easy task to achieve, but a lot that can be done with the proper technology in place.
FST Media: Which segues nicely into my next question on a relatively recent innovation in frontline service: chatbots and digital assistants. Despite their current limitations, these technologies have become an almost essential first-point-of-contact for FSIs. How do you see these technologies evolving within the industry?
Carroll: There’s no doubt the conversational era is here now and has been for a little while.
If you think about it, we’ve been on a journey: we’ve gone from
websites to apps, and now we’ve moved
into conversational experiences.
Websites and apps are great, but with a website, it tends to be up to you to find what you’re after. With an app, again, it’s up to you to download it and then use it; moreover, it usually only does one predefined thing. So, for example, an app for a particular bank, Bank XYZ, does everything I need to do at Bank XYZ, but little beyond that. As I said, however, it’s a new era. People want advice and determinations in the channels they’re in, like messengers and also voice. They also want different types of advice – they don’t just want to be restricted to what the app gives them. In other words, they want conversations that are non-linear; that means giving the assistant tasks that are both related and non-related. For instance, if I start talking about a loan, I might also want to discuss buying tickets to the football. And while I’m doing that, I might also want to know how much money is left in my account to spend on those football tickets.
This paves the way to the term ‘digital assistant’, which is something that’s evolved from the term ‘chatbot’. What’s the difference? Well, a chatbot tends to give advice about just one topic, whereas a true digital assistant is, as I described earlier, non-linear. It’s about helping me with everything I need to do at that point in time. And a true digital assistant also comes fairly well integrated with the concept of a ‘skill’. The skill is, for all intents and purposes, the chatbot itself. So a true digital assistant applies multiple chatbots performing all varieties of functions. What we can also do then is take those skills and use business rules that we’ve already put elsewhere in self-service. Again, as an example, you might have a loan origination flow that you’ve already built; what we can do is pick that up and place that in a digital assistant and that can surface through an intent when that particular person is wanting to originate a loan.
Sessa: Also, it’s worth noting that digital assistant technologies are not only there to drive better consumer experiences. They’re also there to help relationship managers, brokers, insurance agents, and customer service representatives do their day-to-day job better. So, same technology, different skills.
FST Media: You spoke earlier of loan origination – a process that almost always requires customers to go through the process of completing a multi-page form. While these forms have now largely been digitised, the field entry process itself remains overwhelmingly manual – and a bane for customers expecting a more seamless course. What are some recent trends you’ve observed with online forms?
Sessa: Around 48 per cent of loan applications initiated online are not completed. That’s a lot. Brands are leaving a big opportunity on the table. And while there are many reasons behind it, there are a few that stand out. Firstly, the experience is not smooth enough; things are too complicated. As we mentioned before, customer expectation is higher than ever before – as soon as you make things a little bit too hard, well, you’re going to lose that opportunity. Another is that prospective customers are shopping around, and simply using these forms to compare competitors’ rates.
The second is that 50 per cent of applications that are initiated online and that get to the final step of an online journey are completed by a sales representative in-branch (obviously prior to Covid-19 lockdowns), or now via a call or video conversation with a sales representative, which ultimately impacts end completion rates.
FST Media: You’ve hinted at the sheer complexity of these forms in dragging down completion rates. Could you dive a little deeper into why there is such a high rate of abandonment? What can FSIs do to improve these conversion rates?
Sessa: First of all, the experience needs to be modern, it needs to be engaging, and it needs to be intelligent and predictive. If I’m a customer, I don’t want to be asked the same question over and over, especially if I’m already a customer of the brand and I’m trying to buy a different product or service. FSIs need to be able to anticipate my needs. How? By putting together all the data that they’ve collected about me and using it in an intelligent way; FSIs, ultimately, need to create a comprehensive and actionable ‘customer 360’.
Second, you need to work on top of the funnel. You need to identify the right prospects rather than attracting the wrong people and not converting them because they weren’t the right fit. Brands need to invest more in filling the funnel with the right prospects. The customer needs to be ready to buy and to make a financial decision in those ‘moments that matter’. So intelligent, real-time targeting and digital ad optimisation are key to staying relevant and also being cost-effective.
And a third item I’d mention is centred on employees. Brands need to empower sales representatives (bankers, brokers, and agents) by filling in gaps between online and offline experiences. For example, a well-qualified mortgage sales lead created in real-time should provide a seamless follow-up task for a loan consultant. So, if a customer were to leave the website for any reason, you want to be able to retarget them, to leverage the momentum you have, and to assign them in real-time to an expert of the product in which they’ve shown interest. And, if the customer is a VIP or a corporate or private banking member, you probably want their relationship manager to make that call, to drive a more personalised and intimate conversation.
Carroll: In the case of forms, two words spring to mind: relevant and reflexive. Relevant has already been touched on by Alberto when he discussed the point, ‘If you know something about me already, don’t ask me again. What we can do is extend that idea: Once you already know something about me, ask me relevant questions about what I’m about to do. If I’m applying for a loan, and you know my age and you may know my salary, ask me relevant questions about my circumstances. That leads into this idea of being reflexive. We’ve all filled out paper-based forms where it says, ‘If you are this, go to section six’ – it’s very annoying. What we need and what we have are tools that, based on an answer you give within one screen, will take you automatically to the next relevant screen based on what you’ve said. That’s the reflexive part of it.
And finally, what we’re able to do with these forms is to report on where customers are within that process and how much time they’re spending on each of those screens. Once we learn that about our customers, we’re then able to design these forms even better and make them even faster. And when forms are more relevant, more reflexive, and quicker, you’re able to then put more information within them. You’re then also able to ask more questions and to do more calculations, and by absorbing more logic in a process involving a form, you’re going to get a better outcome for your customers.
FST Media: Looking back at customer acquisition again, we’ve seen a lot of fintechs and neos emerging as genuine innovators in this space, making ready use of eKYC to streamline the onboarding process. How can incumbents, as well as emerging challengers, effectively utilise innovations in customer verification to simplify onboarding?
Sessa: The Covid-19 pandemic is posing challenges across the globe. Particularly during this period of social distancing, self-isolation, and other disruptions to everyday business activities, things have been difficult. You mentioned AUSTRAC previously – they’ve introduced new guidelines to address the challenges posed by social distancing restrictions, using things like video calling technology to compare ID documents with a physical person on the other side as well as allowing phone interviews in lieu of physical interactions. These new guidelines are creating challenges for traditional financial services organisations.
Artificial intelligence-powered identity verification notification solutions help to address a key issue: that it’s not sufficient to deliver the end-to-end promise. A complete integrated solution is needed to address the aspects of the end-to-end onboarding process. And what are those building blocks? It’s a huge topic, but I see them as four separate goals: firstly, identify the right prospects that you want to on-board, and these refer back to the concept of ‘visible and smart, intelligent marketing’ I mentioned earlier; secondly, target customers with personalised messaging and attract them with engaging experiences; thirdly, orchestrate the communication and intelligently dispatch the onboarding request, considering the incoming volume and the available resources and skills (a particularly pertinent issue during Covid-19, which has seen call centres inundated with requests); and finally, execute video interactions, integrated with AI-powered identity verification technologies, and track and record them in accordance with AUSTRAC guidelines.
Another building block I’d add, which is very important once you’re able to perform those checks – and before the initial phase of digital origination with eKYC – is the ability to orchestrate downstream process management. This is about managing exceptions, verifications, and approvals without losing the context of the original customer request. Furthermore, it’s about leveraging each customer interaction to enrich the customer profile to provide better customer service, as well as to upsell or cross-sell.
FST Media: Finally, looking into the crystal ball, what do you rate as the next breakthrough innovation that will redefine how customers interact with financial services?
Sessa: For too long the technology industry has focused on the idea of a static and predictable customer journey. As I said before, those journeys are not predictable. Therefore, this view has to change if we’re truly going to understand the customer experience.
There is no such thing as a fixed 360-degree view of the customer;
today’s consumers are nomadic and, as a result, data mining
and insights are constantly in motion.
That’s why a unique data-first approach, one that can help brands eliminate their blind spots and make every customer interaction matter, is needed. Customer intelligence platforms (CIPs) are what we believe effectively consolidates online, offline, and third-party customer data sources into a single dynamic view of the customer. And it’s not just about intelligence: you’re making sense of a huge amount of customer data present within FSI ecosystems. It is also about deriving the smartest next best action or a more effective next best offer to take or propose at the right point in time on a customer’s preferred interaction channel.
Oracle announced a new CIP in 2018 called CX Unity. This CIP, with built-in artificial intelligence and machine learning algorithms, helps derive and deliver timely intelligence about customers so that those financial organisations can optimise their brand experience across marketing, sales, and service processes.
Carroll: I know it’s a little bit out there, but I think we’re going to see a lot more virtual, augmented, and immersive reality in the FSI sector. How’s it going to look? I don’t know right now, but I’m excited by the prospect of it. I’m excited about how these concepts will work and, like I said, they’re out there. It’s the next natural progression in that journey I talked about earlier – from website to app to conversational customers interactions and into the immersive world. I’m very excited to see where that takes us. ◼
FST was joined in conversation by Alberto Sessa, Senior Director CX Product Development (EMEA and APAC) and Gavan Carroll, Principal Solutions Consultant CX, from Oracle.