Can The Retail Banks Fight Fintech By Improving The CX?

A major new research study by the European Financial Management & Marketing Association (Efma) has found that efforts by major banks to fight the threat posed by fintech to their retail business may have result in a better customer experience but very little additional business. Are the banks getting more love, but no more cash?

The Efma research included 16,000 participants in 32 different countries and explored customer expectations, behaviours, and preferences. The good news for the big banks is that the customer experience has been improving in over 85% of the markets surveyed – often it has only increased a little, but at least the CX is generally moving in the right direction.

Over half (55.1%) of customers said they plan to stay with their current bank for at least another six months but only 38.4% would recommend their current bank to a family member. Even worse though, just 15.9% of respondents said that they would seek out additional products from their current bank. It seems the days when a customer would automatically go to their bank for new services, such as a loan for a new car, are gone.

As might be expected, it is millennial customers causing many of the problems for traditional banks, as they are both the most demanding and the most willing to change their bank when not satisfied. The 2016 World Retail Banking Report suggests that almost two-thirds (63.1%) of global bank customers have already experienced products or services from Fintech firms. This is extremely worrying for the traditional retail banks especially the same research shows that millennials only have about half the loyalty to their bank of older customers.

The Efma research found that 88% of customers trust Fintech providers ‘completely’, or ‘somewhat’ demonstrating that the banks cannot rely on their traditional role when innovative competition is already widely trusted to offer reliable financial services. Less that a quarter of the Efma respondents inside retails banks feel that they can offer an advantage to customers above what the Fintechs are offering.

These numbers appear to show that even if the banks focus on improving the way they interact with customers, it may not be enough. The innovative approach of the Fintechs has been built from the start with customers in mind, not modified after decades of process have created a certain way of doing things. Can the banks change?

Efma suggests that banks partner with Fintech, offering a large customer base and brand heritage that could be coupled with a new innovative approach. Will this work or will the Fintechs feel they can just go alone and pick off retail banking services one by one?

Let me know what you think by leaving a comment here or getting in touch via my LinkedIn.

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Let your customer behaviours drive disruption and innovation

Amazon continues to amaze me with their innovative approach to business. As a customer-centric business, they are a prime example of how retaining a laser-focus on the needs of your customers will always be the driving force behind new innovation.  Customers, including myself are notoriously demanding: we want to buy items and then have them shipped when we want them, and to where we want them. We don’t want our lives to be interrupted and so if we are not in, we want you, the retailer, to ensure the parcel gets left in a safe place or dropped at a location where it can be collected at our convenience. There is a cost to offering this service, and one that most of us will happily pay for, but if you can do this for free or at very low cost – then we are really interested.

What I like about the Amazon model is the constant desire to ‘challenge-the-norm.’ Shipping is a good example: in the UK they clearly utilise a range of excellent well-known carriers but the rise of their own Amazon Prime service has become increasingly prominent. Amazon has effectively taken a large chunk of its shipping operation ‘in-house’ and realised that it can complement its existing network of shipping carriers by using local contractors to deliver parcels next day – including Sundays. A resident in my local area suddenly appeared on my doorstep to deliver a parcel I had ordered one Sunday evening, and I am assuming he was working directly for Amazon (Prime). I have paid an annual subscription fee to use ‘Prime’ and it has already paid for itself given the volume of orders my family makes from the site.

Amazon has applied similar innovations to its international shipping in the US where it is leasing a fleet of planes that will enable them to reduce the cost of international shipping and effectively take an element of this service in-house too. This is on top of their experimental drone technology, which will one day see our parcels being delivered by robots! One thing is for sure; the skies are eventually going to be full of Amazon machines.

What lies at the heart of these delivery innovations is the customer. Our behaviours, demands, preferences, are driving disruption in the eRetail space. Companies like Amazon have to find new ways of offering better services that meet these multiple needs.

I remember when 24hr delivery on a weekend was seen as ‘something for the future’. Now it is the norm, and it would not surprise me if in the not-too-distant-future I am talking about how I can order items to arrive within a 30-minute delivery slot – with the ability to communicate with the delivery-drone – pre-arrival – to have delivery location/timing changed, based on my changing schedule.

The future is now because we, the customers, demand it…

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An End To Cold Calls?

The Department for Culture, Media, and Sport has announced new legislation to control nuisance calls. Companies that cold call people, as part of a marketing or sales campaign, will no longer be able to mask their telephone number.

Critics of the new action say that it will not actually prevent nuisance calls because any rogue company that wants to continue calling will just us a fake number. However there is support for the move from bodies such as the Direct Marketing Association who have been calling for this change in the law for several years now.

Outbound calls from telemarketing firms are very different to the customer service environment where a customer calls a company looking for help, however I am still pleased to see that the government is taking action on this problem because in many cases the public connect “call centres” together – regardless of whether it’s a marketing company trying to sell to them or a customer service centre that the customer is calling.

That’s not to say that outbound calls do not have a purpose. Used as a marketing device within the legal boundaries there is nothing wrong with calling potential customers, especially where some intelligent data analysis has identified that the customer is likely to be interested in the calling organisation. This is particularly true of the charitable and third sector where the use of calls to gain support and funding is a critical part of their work.

The Telephone Preference Service has allowed people to register their phone number on a do-not-call list for a long time now and most customers who find marketing calls annoying will have registered their number, but some rogue companies have ignored all consumer protections. Earlier this year the telemarketing firm Prodial was fined £350,000 for cold calling customers – they had used automated systems to dial over 46 million people!

Clearly telemarketing companies like this are abusing these automated systems and annoying millions of people. Displaying a number when calling may not eliminate the rogue companies, but it is one step towards making the telemarketing business act more responsibly and respecting the time of those people called.

As I mentioned, outbound and inbound contact centre operations are very different, but when comedians joke about their awful experience with a contact centre agent there is rarely a distinction drawn on which type of contact centre. I hope that by cleaning up the telemarketing business we can start giving some genuine respect to the customer service teams helping people day after day.

What do you think about these changes? Will it help to clean up the cold calls? Leave a comment here or get in touch via my LinkedIn.

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Payments… Just Make It Easy For The Customer!

Pay with Amazon. Are these words now going to rival Pay with Paypal or Pay with Apple? I think so – for Amazon and their 285m users to enter payments is a significant event. Amazon has shown through their growth that making the experience as simple and user-friendly as possible is critical to driving sales and basket-value.

Literally one-click, in many cases, and you are done.

That plays very much towards the time-poor but digital-savvy age we live in today. This news is not good news for other payment providers in my view. Amazon has ticked the box for user-experience and has developed a position of trust that your card details are stored securely in their systems. Being able to utilise the same system to pay for items at other merchant sites could see a rapid increase in Amazon-checkout related sales – to the detriment of other providers.

I remember years ago when Paypal was little known and simply the obvious payment option you used if you were an eBay member. Then they made it easier to integrate Paypal into non-ebay merchant sites. All of a sudden you did not have re-enter your Paypal details on a non-eBay site – and global research has shown that customers find it tiresome and off putting if forced to re-enter card details – particularly when in a rush.  If customers can take their Amazon experience with them, I foresee many merchants considering or eventually being forced to consider offering this payment option.

It sounds dramatic, but customers just want things to work simply and efficiently. If you give them a choice to choose a payment option they are already used to and that saves time, then why wouldn’t you?

Time will tell, but I suspect the Amazon payment effect could well be another positive disruption for the ecommerce space.

What do you think about Amazon entering the payments market? Leave a comment here or get in touch via my LinkedIn.
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Will Customer Expectations Drive Fintech Faster?

I have written several thoughts about the growth in importance of Fintech in recent months and especially how it is set to transform the entire retail banking industry. By designing new financial services from the ground up and placing the customer at the heart of the service many new companies are finding that they can gain market share just by focusing on the customer experience when planning a new service.

 Many in the banking industry are not just bracing themselves for the change that looks inevitable, but also for the rate of change. Banks, as we know them, evolved over hundreds of years, but the present wave of innovation will not require decades to change history – just a few years will be enough.

But could we reach a point where the Fintech revolution actually overtakes customer expectations?

Zopa is a great example of a successful Fintech who have achieved fantastic growth in recent times. They specialise in peer-to-peer lending and were founded just over a decade ago as a kind of eBay for money. Customers with cash to invest can expect better returns than banks offer and customers who want loans can expect lower rates than a bank loan – the system matches lenders to borrowers. Zopa had £5.4m of revenue in 2013, £11.4m in 2014, and over £21m last year – they are doubling every year.

According to The Millennial Disruption Index, 73 per cent of millennials would be more excited about a new offering in financial services from companies such as Google, Amazon, Apple, PayPal or Square than from their own bank. In fact, you don’t need to be a bank to offer financial services so long as you can convince regulators that you have enough cash to meet liabilities. Apple has over $200 billion in cash on their balance sheet just waiting to be invested somewhere. Are they leaving so much cash unused because they have plans to go deeper into the financial markets?

I think the evidence points towards a continued increase in the rise for Fintech and demand still remains ahead of supply.  This this is partly fuelled because of the Fintech players have a new approach to how customer service is organised which is creating additional demand.

Cost and service. They are the cornerstone of most purchasing decisions and particularly evident in the FS&I market so if you can design a service from the ground up with it generally focused around an app then it allows the luxury of designing service exactly how the customer expects. Usually this means that if the customer has a problem inside the app, they want help inside the app and would find it extremely irritating to have to leave an app, make a call, then try talking to an agent after returning to the app. Think carefully about how customers are using the service and exactly where they need support.

My view is that customers want a simple, easy life and Fintech will continue to drive customers to seek alternative solutions powered by modern technology and underwritten by simple effective service.  What is for sure is that our thinking on how to serve those customers also needs to innovate to keep customer relationships on track.

How is your organisation changing to meet the change in customer expectation and demand?

The BBA report ‘Banking – A World of Change’ in 2015 documents the changing behaviours of banking customers:

  • 6% decline in branch use in the past year
  • 3,200 people have now used the ‘Nationwide Now’ service with 94% of “Ninety-four per cent of customers say they are either very or extremely satisfied
  • 10.6 million banking app logins every day
  • 22.9 million banking apps downloaded
  • 43% decline in telephone contact to banks from 2008 to 2013

The evolution within Teleperformance has been significant and we’re happy to share our thinking on how to stay ahead. Leave a comment here or get in touch with me via my LinkedIn.

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Happy Staff Make Happy Customers

This post is by Sasha Jenkins, Business Development Director at Teleperformance UK.

The media has not been kind to Chief Executives recently, with a lot of discussion about corporate leaders who earn too much and deliver too little, but one quite different story just caught my eye. Henry Engelhardt, CEO of insurance group Admiral, is retiring at the end of this month. He founded Admiral back in 1991 and has seen the company grow from nothing to be valued at £5bn and a member of the FTSE100 index.

Mr Engelhardt wanted to say thank you personally to his entire team so when he retires he is giving a £1000 gift to all his employees. Admiral group employs 8,375 people so it is a thank you gift that will cost several million pounds from his own pocket.

This is indeed an “admirable” gesture, but it says a lot to me about the company ethics at Admiral. If the boss is prepared to make such an unusual and expensive gesture then those people must be working in a great team.

This is really important for anyone who is focused on the customer experience. If fixing customer problems gets your team really fired up then the customer will be able to detect that enthusiasm and will feel that they are really being looked after. If your team is just punching the clock and counting down the minutes until they can leave for home then the customer will almost certainly be able to detect that lack of interest in helping them.

I was with a client recently at one of our contact centres and the client expressed some surprise at how happy our team was. He actually said that he was surprised to see that when we made a point of mentioning this in our bid for the contract he didn’t really expect it to be quite so true.

But it should not be a surprise. In our industry people are the interface between customer and brand and they create the customer experience. If your people really don’t care about what they are doing then the customer is going to have a terrible experience. We take time and make sure that our team is looked after in many ways so this happy environment can be created.

The boss of Admiral is just doing the same – looking after his team because he knows that it is the people difference that drives service success.

What’s your view on how best to keep the team happy and focused on the customer? Leave a comment here or get in touch via my LinkedIn.
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Rail: Small Speed Increases Can Bring Big Changes For Customers

This post is by Sasha Jenkins, Business Development Director at Teleperformance UK.

What I find really interesting about the new Virgin Trains “Azuma” train from Hitachi is not so much that it can go faster than the existing rolling stock, but how much a small increase in speed can improve the service for customers.

The Azuma will not be in full service until 2018, but when it does it will be cruising at 125mph and able to get up to this speed a full minute faster than the existing trains. This small improvement makes a big difference to the service.

The London to Edinburgh journey time will be reduced by 20 minutes and London to Leeds will be a two-hour journey in total. Given how long it takes some commuters to just travel across London by tube it seems possibly easier to just live in Yorkshire and commute by rail!

The Azuma has the potential to travel much faster – at 140mph – although track improvements are required to facilitate this. Assuming the tracks can be improved there are many additional benefits that customers might see in addition to just faster journey times.

The existing service improvements will already increase the possibility for journey frequency, with the potential for 28% more capacity during peak times. In addition, because of the improved speeds it should be possible to serve additional stations such as Middlesbrough, Huddersfield, Harrogate, and Lincoln.

Virgin Trains has ordered 65 Azumas from Hitachi at a cost of £3.3bn showing a strong commitment to the improvement of the East Coast Mainline service. I think that with much of the debate around rail improvement in the UK focused on HS2 and HS3, and with little certainty around when these projects will be delivered, it is great to see projects that are measurably improving rail travel for customers.

Virgin Trains is demonstrating that even a small increase in performance can make a big difference for customers in the frequency of trains and number of stations served. It’s a real story of how a one-minute improvement in acceleration can dramatically improve the customer experience.

What do you think about the Azuma and the changes it can bring to the East Coast Mainline? Leave a comment here or get in touch via my LinkedIn.

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