The ‘Uberfication’ of Financial Services

I recently attended the Marketforce 20:20 FS Customer Experience event and wrote about my initial reflections last week in my blog.  I wrote about the need for banks to change and become adopters of technology and new thinking and have since thought about how the speakers at the event surprised me in some ways but delighted in others!

For those of you who have followed my previous blogs (thanks very much J) you’ll know that I have already written about ‘uberfication’ within the financial services and contact experience management industries that the emergence of Fintech companies, solutions, apps and thinking is going to radicalise the market.

I went to the event with the preconceived idea that the general mood amongst some of the largest financial service organisations in the world would be fear and loathing underpinned with a perception that they don’t need to change as the Fintech revolution is actually just a fad. I was delighted to hear that I couldn’t have been more wrong as one speaker after another lauded the need to change to keep up with the industry. 

Some spoke eloquently about how they’ve pushed their organisation to understand just how important the view of the customer is, often using technology, and what will happen to your business if you don’t. ‘rant&rave’ were certainly as disruptive as they like to be stealing the show with a captivating view of how to get customer views and what to do with them!

Others spoke about the desire to become omni-channel but 96% of people polled thought it an impossible task without a complete overhaul of their business. An organisation like K2C is a great place to start for those who want to move to onmichannel but are daunted by the task – Teleperformance have a growing number of clients now realising the massive benefits from the supple console and choosing the modules that work best for them.

Manuela Pifani of DLG brought the challenge to like with a perfect ‘mixer tap’ analogy: Some customers like hot, some like cold, everyone changes their preferences and you need to be agile and flexible to mix the water just right for the here and now.

The most remarkable thought I’ve only just come to realise is the general acceptance that well-established FS&I organisations have accepted they can’t compete with all the niche providers, all the Fintech solution providers and the radical new thinking that exists in the market.  The common belief is that by being great at the simple traditional banking and insurance is the right strategy and who am I to disagree.

I was shocked that there was so little focus on people. Every solution to every rhetorical problem centred on solution integration or point solutions or an overhaul of technology and it’s not hard to see why. Technology does need to be the enabler to being the ‘mixer tap’ of customer experience – but without great people the water doesn’t flow.  Taking the uberfication example, it doesn’t work if your taxi driver doesn’t know where he is going!

If you want to see how Teleperformance people become enabled with technology, such as that provided by K2C, you need to get in touch so we can make it happen for you.

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Will CMA Plans Stimulate Energy Competition in the UK?

This week the Competition and Markets Authority (CMA) announced the results of an 18-month investigation into competition in the UK energy market. The main headline concludes that customers are being overcharged by almost £2bn annually and something has to be done to stimulate more competition.

There are two main proposals for action. First is a cap on the price that customers using pre-payment meters can be charged. This is aimed at addressing the problem of customers who find it difficult to arrange post-payment options due to credit rating issues or just something as simple as tenants in a property where the landlord would prefer pre-payment to be used. Historically these customers have been charged higher rates even though they are likely to be the least able to pay.

Second is a database of customers who have been paying the standard tariff at any company for three years or longer. The database would be available to all energy companies and therefore will allow all the energy companies to see who is disengaged and has not been interested in switching – in addition to knowing that the customer is not on any promotional tariff.

It is proposed that any companies wanting to contact customers would have to use post as a contact channel. So at least the publication of this database will not mean a deluge of phone calls and text messages.

Customers will be contacted before being added to the database and given the ability to opt-out. So if you are happy with your energy provider and don’t want to be contacted then it is possible to opt out of communications, but the default is that you would go into the database if you are a customer who has not switched for more than three years.

At present this is just a proposal and the CMA will be taking further evidence and ideas to improve these proposals before a final report in June, but I like their approach. First, it’s a good thing to deal with the pre-payment issue. Some customers have no choice but to use pre-payment and they should not be penalised with excessive rates.

The database of customers is the most interesting proposal though. The fact that competition exists and it is easy to switch energy provider has not been enough to actually stimulate real competition because inertia exists – customers need a reason to switch and most are happy to just keep paying the same provider they always used.

If providers can find out who has not switched for years and directly market special deals to them in a fairly unobtrusive way then I think it really could stimulate more competition in the marketplace. It also encourages all the energy companies to up their game on the customer experience because it is price and service that determine where customers buy their energy. If you can be confident that you are offering a competitive price and great service then it’s likely you can retain customers even with the competition sending them offers in the post.

What do you think? Are those who have not switched for the past three years already aware of the options they have or will this move to allow companies to market to them differently be a useful change, allowing competition to act better because the customer is better informed? Leave a comment here or get in touch direct via my LinkedIn.

National Grid

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Redefining The Needs Of Bank Customers

Last week I attended a MarketForce event focused on customer experience in financial services. One of the key messages I took away from that event was the growing importance of data in the customer experience and how important it is to build a single view of the customer.

It was also clear from the talks at the conference that very view companies are able to say that they genuinely have a single view of their customer – the omnichannel that customers are demanding today where they receive the same great experience regardless of the channel they prefer to use.

It is clear that the expectations of the customer – especially in banking and financial services – have changed. Customers don’t want to deal with a bank that is only open from 10:00 – 15:00 Monday to Friday. They don’t want to have to enter a branch. They want service available 24/7 and using a variety of channels. Making this work for the company that has to manage these customer expectations requires data on customer behaviour so services can be planned appropriately.

As I sat at the conference listening to the various speakers trying to make this connection between what is possible today and what the customer wants, I made some notes. These are my observations on the issues faced at present:

  • The customer wants to choose the channel they use. They are not longer ready to use a channel that is defined by the bank and they are likely to choose new channels that the bank is not aware of as they become popular.
  • Banks need to be able to provide a service that allows a jump between channels, but without security blocking this process. ID verification is important for banking services, but they need to find how customers can perform verification once and then jump channels if they want to do so.
  • Unsecured channels need to be used better to provide answers to questions in a single contact – such as customers sending a question using an unsecured and open social network. The immediate answer should not be “call us” when questions can be answered.
  • Security is important – data centres need to be Tier 4 level and all cloud based technology needs to be tested.
  • Google Research has found that 46% of customers will start a financial query and then switch device before completing what they are doing. For instance, starting a query on their phone and then completing it on an iPad or Laptop when they need to get more information. It is important to note that about half of customers of financial services now jump channels during a query because this is where a breakdown in service is likely to occur.
  • Banks can only deliver true customer centricity is they can collect and aggregate customer data, which introduces the need for additional security.
  • Agents must have a single view of the customer across all the channels the customer can use.
  • Data can only be truly liberated if it can be used to create insights that generate actions – customers will not allow you to collect data that has no obvious use. You need to demonstrate that you are improving the way that customers are served.

Getting all this right is extremely complex. The banks have many issues though – their entire industry is changing with new players constantly entering the market for both full-service banking and fintech creating technology companies that offer very specific services.

In a changing market it is therefore vital to deliver what the customer wants because the customer has more choice than ever. Teleperformance is already working with a network of partners, such as K2C, to ensure that we are building on our experience of customer service and providing the data security that banks need today.

For more information please click here to access my LinkedIn page, alternatively please leave a comment on this article.

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A 20:20 Customer Experience in Financial Services

More than a year ago, the UK head of banking at Santander said that the banking industry is facing a Kodak moment. Steve Pateman was suggesting that banks are facing an existential crisis because of financial technology (fintech).

We all know what happened to Kodak. Once the world leader in photography technology and supplies they felt that digital photography would never take off because the cameras were too expensive and people would always want printed photographs. Look at photography today. Everyone has a digital camera in their phone and printed photographs feel like museum exhibits.

I was thinking about this when I attended the Marketforce “20:20 Customer Experience: Financial Services” event earlier this week. I was there and I enjoyed the debates, but it seems like the sense of crisis that I see in banking was not reflected in the programme. For example: 

In just one day, benefit from a jam-packed agenda of compelling content and strategic insights including the importance of instilling a culture of customer-centricity throughout the business, developing robust and rewarding omnichannel experiences, leveraging insight and analytics to improve the customer journey and engaging employees in pursuit of great customer service.

This is all true. The customer journey has changed and customers are demanding omnichannel experiences, but in industries such as banking and insurance this expectation of a different customer experience is shaking the entire industry. Companies that believe they can tinker at the edges, perhaps just improving customer service a little, will not exist a decade from now. 

Why do I feel so sure of this? Take a look at the retail-banking marketplace right now. New entrants are opening up all the time. Companies like Metro Bank are reshaping how bank branches work and Atom Bank is showing how a full service bank can operate just using an app.

These companies are redesigning the banking experience. They are designed around the customer from the start without the legacy of hundreds of years of banking processes and an enormous branch network. 

But the change runs deeper. New companies are taking individual processes, such as loans or transferring money overseas, and offering these services on apps at far better rates than full service banks. These are the services that traditional banks rely on to make the bulk of their profits, as operating current accounts is not a great revenue earner.

These new market entrants are able to succeed because they are offering a better experience. Banks have ways of doing business that has just been accepted over time. Many processes have not been reviewed or improved for decades. If you can go to an app and get a decision on a car loan within seconds then why would you endure the process of completing a loan application form at your local bank branch?

The fintech revolution is changing banking and other financial services because the technology is allowing services to be created that are built with the customer in mind from day one. Customers are now reshaping the entire financial services industry so any conference focused on customer experience in financial services needs to be considering this as the first question: Now that the customer is in charge, what will the industry look like a decade from now? Who is the next Kodak?

Please leave a comment here if you have your own thoughts on this or get in touch via my LinkedIn.

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What Is Really Affecting Retail Job Numbers?

This blog is by Liz Parry, Strategic Account Director at Teleperformance UK.

The British Retail Consortium (BRC) has published new research last week estimating that the retail sector in the UK might lose up to 900,000 jobs by 2025 if current government plans are followed. In particular, the BRC is warning about a rise in minimum wage rates to support a National Living wage and the imposition of an apprenticeship levy.

At present, retail employs three million people in the UK so to lose almost a million jobs in a decade would be an enormous change. However, I personally believe that there is a much more complex picture emerging and to suggest that minimum wage increase will create so many job losses is very simplistic.

I believe that there are two much more important reasons why we are seeing a change in retail and the number of jobs available.

  1. Competition over tax. Big international retailers can spread their tax liability across many countries, they are multinationals. This helps them to pay tax in countries that offer lower rates of corporation tax when compared to the UK – such as Ireland. They are not breaking any laws and they can maximize the efficiency of their tax arrangements by ensuring that even if they do business in the UK, most of the profit is booked in a more advantageous location… local retailers cannot do this so there is a new kind of competition in the market today.
  2. Omnichannel expectations. Customers expect a much tighter integration between the online and offline offer of a retailer today. If this means that technology starts shaping the instore experience then it is highly likely that staff numbers will decline. It’s easy to imagine a fashion store that allows you to walk in, scan an item on your phone, pay on your phone, then walk out with almost no staff interaction… the staff will be there to advise rather than wait at tills.

It’s highly likely that these are the real areas that will affect retail job growth in future, not an increase in the minimum wage, but what do you think? Leave a comment here or get in touch via my LinkedIn.
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Does Kodi Offer Viewers A Vision Of How To Find Content?

I have often talked about the importance of content to the big Internet Service Providers and telcos, but there are a few interesting developments taking place that I think could be important in the coming year.

First is the explicit acknowledgement of this by Virgin Media who are now giving away Samsung tablets with their best service bundles. Offering free tablets to customers shows that for those customers buying the best package, content is really what it’s all about.

But they must be doing something right. Virgin Media recently announced record customer numbers and a 38% jump in profit on last year, so their strategy is clearly getting more people watching TV and using their Internet service.

But one of the things that has been bothering me is that way that the market is fragmenting around content. In the old days of analogue TV you could switch channels to view different shows, but the important thing was that you had access to all the channels. This is no longer true.

If you love House of Cards, you need to get a Netflix subscription to view it. Likewise with the original content that several other telco and media companies are creating. Personally I do subscribe to several services, but I don’t think that many customers will be happy to subscribe to content with their ISP plus Netflix plus Amazon plus whoever.

There is an interesting app called Kodi that people have been talking about recently and it is open source and freely available. It was originally developed as a media system for the Microsoft Xbox, but is now offered to anyone who wants to use it a home control centre for media.

Kodi allows you to build a central media centre for music, movies, and TV channels by subscribing to various services. All the literature suggests that it is legal, but it seems to be skirting the edge of what should be allowed because many content providers probably did not expect to be streamed online to people building their own media centres at home.

Moving forward though, the Kodi model is clearly the future although it will need to be provided out of the box on a TV or box for most customers. I want a system that allows me to easily subscribe to various content providers and to then be offered to me on my TV using and easy to use menu.

It doesn’t need to be from pirate streams or any other dodgy source. Most customers will pay for great content, but I’m sure we will need to find a way to create an aggregated source of content from many different providers so the price can be lower than just subscribing to them all.

Technology like Kodi points to way toward doing this, but while the companies feel they have a competitive advantage in holding onto their content it is unlikely to happen soon.

What do you think? Leave a comment here or get in touch via my LinkedIn. They're Here Again

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Argos Ideas Could Shake Up The UK Omnichannel

This blog is by Liz Parry, Strategic Account Director at Teleperformance UK.

The UK Takeover Panel has recently given Sainsbury’s more time to consider their offer for Home Retail – owner of the Argos chain. This is because a South African retail group, Steinhoff International, has tabled an alternative offer that is slightly higher than the deal offered by Sainsbury’s.

The various actors in this drama now have until March 18th to decide what they will do. On this day both Sainsbury’s and Steinhoff need to decide what their final offers will be, allowing Home Retail to make a final decision.

Steinhoff has some UK presence already with brands such as Harvey’s Furniture and Bensons Beds, but they are not as widely visible on the High Street as the Sainsbury’s brand so there will be some tough conversations going on in all these various boardrooms. 

Whoever gets to own Home Retail is going to find that they can do a lot with the organization – which is clearly why major brands like Sainsbury’s have been pursuing the company. Argos has been a UK leader in exploring omnichannel retail. Their warehouse format for the in-store experience has made it easier for them to introduce concepts such as online stock checking and click-and-collect compared to other retailers with a more sophisticated in-store environment.

This is where I see the real value of this deal. I imagine that if a company like Sainsbury’s can integrate the experience and ideas that Argos has then they could overhaul the entire supermarket sector in the UK. Perhaps Steinhoff could do something similar, but their existing range of stores in the UK is mainly focused on furniture and is therefore far more niche than grocery retail.

Whoever wins in March is going to have a very interesting opportunity to take the way that Argos works and to apply this experience to other brands. I think we will see some really big omnichannel experiments in retail in the UK in 2016 and this deal is just the start.

What do you think of some of the recent UK omnichannel developments? Leave a comment here or get in touch via my LinkedIn. 

Argos,EC1

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