“Customers are always beautifully, wonderfully dissatisfied,” according to Jeff Bezos in a letter to shareholders. Last week, our financial services team pondered this and other insights at Fintech South in Atlanta. In today’s rapidly evolving financial landscape, that line seems more relevant than ever–customers want cutting-edge digital innovation and robust cybersecurity; they want quick, repeatable processes and hyper-personalized communications; they want to know that their bank is adhering to regulations and chasing the next big thing. How can financial institutions meet these–at times–contradictory expectations?
Here are five key strategies for positioning your financial institution to adapt to shifting customer expectations and emerging technology.
Five Customer-Centric Strategies From Fintech South
1. Modernize systems. For legacy financial institutions, modernization is no longer a luxury; it’s a necessity. Modernized systems that leverage automation not only streamline internal processes, but enhance the customer experience too. For instance, simplifying and expediting the loan application process can significantly reduce friction for customers. This seamless, efficient customer journey is a competitive advantage in today’s digital age.
2. Foster strategic partnerships. Partnerships can help sharpen your competitive edge by strengthening technology offerings. When a strategic partner can, for example, integrate their payment functionality into a product managed by another firm and leverage back-end consolidation, then there are fewer steps on the customer-facing platform. This simplicity for the customer creates a better user experience.
3. Leverage artificial intelligence. AI has opened up new possibilities for financial institutions, particularly in enhancing customer loyalty and personalizing marketing efforts. AI-driven systems can proactively identify customer needs, leading to improved retention rates. Moreover, AI can enable highly targeted marketing campaigns, introducing new products and services to existing customers or attracting new ones.
4. Offer CRA-as-a-Service and Fairness-as-a-Service. The concept of Community Reinvestment Act (CRA)-as-a-Service and Fairness-as-a-Service is gaining momentum. In addition to helping financial institutions adhere to regulatory requirements, these services introduce a new avenue to increase revenue by going beyond traditional credit scoring. In working with customers to establish data patterns, financial institutions can show that borrowers are creditworthy, even if their credit scores are less than ideal. This new approach not only promotes financial inclusion and fairness in lending practices but also expands the pool of potential borrowers by proving that risk can be calculated using a combination of factors. For banks, this bigger pool of customers ultimately helps increase revenue.
5. Invest in value-driven banking. Customers are increasingly seeking alignment between their personal values and the institutions they choose to bank with. By reflecting customers’ values—from DEI to ESG to community engagement—and then investing capital in initiatives that meaningfully support them, financial institutions can tap into a powerful differentiator and competitive advantage.
The financial services industry is in the midst of a transformation, driven by changing customer expectations, emerging technologies, and evolving regulations. To succeed, traditional banks need to evaluate how modern systems, strategic partnerships, AI, CRA- and Fairness-as-a-Service, value-driven banking, and new customers fit into their strategic plan.
Is your financial institution positioned to deliver an exceptional customer experience today and tomorrow? Fill out the form below to connect with one of our consultants to learn more about the ways you can leverage emerging technology to boost your holistic CX.