Banks are fully cognisant of the fact that in order to remain relevant and competitive, they need to be on a flight path to a completely customer-centric operation. The key to achieving this is a comprehensive and effective programme of banking innovation, focused heavily on optimising and digitising banking operations.
There are two fundamental prongs to these initiatives:
Operational redesign and innovation to upgrade the customer experience
Upgrading the customer experience is essential to remaining competitive in the modern banking market. Customer needs are changing at a rapid clip and banks are racing to keep up with the pace of change. This evolution in customer demand means that banks are competing based on customer experience and the leaders in this field are already pulling ahead of the pack, with ease of service being cited as the top reason for both choosing a bank and sticking with them. Customer experience has to be both the starting point and the focus for process design and operational innovation.
Operational innovation to boost profitability, increase ROE and free up resources
Innovation in operations offers several advantages. Firstly, it provides the potential to grow revenues by providing new, better and differentiated products and services for customers. Secondly, operations consumes large chunks of banks’ annual budgets and the efficiency gains achieved through the use of digital technology reduces costs while freeing up financial resources that can be reinvested in digital innovation.
How To Rise To The Challenge
The major challenge in operational innovation is tackling historic operational models that are typically tied to products and have been designed with an internal focus, to meet the needs of the banks themselves. Innovation requires a complete change in approach, reinventing banking operations from the ground up to support customer-centricity. There are two essential strategies to support this.
Tapping into the power of automation to streamline customer journeys
Banks can roll out seamless, end-to-end digital journeys by automating workflows and removing the need for manual intervention, for example during onboarding or loan origination. This will lead to a more positive customer experience and at the same time deliver operational efficiencies that mean customer-facing teams will have to focus less on processing transactions and doing administrative tasks.
Developing or adopting new tools to transform how teams support customers
With automation freeing up staff time, they will have the scope for a greater attention for higher value tasks. With the right tools, they can advise customers on the best financial products, boost loyalty through tailored engagements and provide a more bespoke and engaging service. With the right platform capabilities, teams will also be able to develop new products and services, launch new journeys, refine the customer experience without the need for massive time and budget consuming technology overhauls. You can partner with a fintech to accelerate this platform approach, rather than having to start from scratch in an area that doesn’t play to the core strengths of your business.
The Pace Of Change Has Never Been Quicker
The COVID-19 crisis has thrown the need for focus on banking innovation into sharp relief. The need for the tools to enable it has never been greater and the suddenness and severity of the pandemic has forced the pace of change. This has shown just how much can actually be achieved in a very short space of time when these requirements shift from priorities to necessities. Numerous examples of new digital capabilities rolled out within just weeks and the wholesale move to working from home illustrates just what is possible when there is no viable alternative.
When the current crisis passes, the pre-COVID operational innovation priorities of competing through customer experience, boosting profitability, increasing ROE and freeing up resources will remain. But they’ll be joined by new contributing influences, including bigger pools of customers using digital channels, a workforce who may be reluctant to return to full time office working, a period of low growth that may increase pressure for cost cutting and a need to prepare against similar future events through the investment in the correct infrastructure and processes.
The banking leader of the future will be ambitious right now and be setting out a plan to speed up digitisation by focusing on the operations innovations that will boost customer experience and drive the next phase of growth.