Traditional financial institutions forced to reprioritise customers in order to compete with new breed of agile fintechs With Dr. Gero Decker

With Dr. Gero Decker, CEO and co-founder at Signavio.

Ireland’s Financial Sector

Ireland’s financial services sector was left reeling after economic growth plummeted and employment levels fell 6.7 per cent in the third quarter of 2018, and have remained around that mark since. This was the third-biggest year-on-year decline since the crash in 2007-2008; the other two being recorded in 2010 when the economy appeared to be heading towards a meltdown.

Despite this overall decline in the sector, it looks to be a very different story for fintechs with Deloitte predicting some 5,000 jobs could be created in Ireland over the next five years. It’s become undeniably apparent that traditional financial institutions are going to have to reprioritise customers if they’re to survive and thrive.

There is a multitude of reasons behind these key statistics, but at the heart of it, customers no longer feel a sense of loyalty to a particular bank and can switch between financial institutions more readily than ever before. Customer experience is quickly becoming the new battleground for the financial services industry, and the merger between technology and people will determine who wins.

New agile fintech entrants who are providing streamlined, customer-centric offerings are eating into traditional establishments’ market share. In order to remain competitive, financial services across the board are heavily investing in digital initiatives; figures show that eight out of ten financial services CEOs in Ireland are investing in AI as part of their business plan over the next five years.

There is a mounting fear amongst financial institutions that customers are increasingly becoming ‘bank agnostic’, and poor customer service could cost the industry billions as it has done in the UK.  In order to breathe some much-needed certainty into Ireland’s traditional financial services, the customer journey must be placed at the centre of operations; connecting an understanding of the customer with everyday operational realities.

With the increased pressure coming from agile fintechs, organisations that respond to this disruption will see huge value in redefining their operations in a way which offers a seamless customer experience.

Irish FS CEOs are not receiving the data they need to make key business decisions

Taking this notion into its practical application, businesses need to utilise customer journey mapping as an effective approach in which to uncover customer insights from various different touchpoints along the customer journey. These insights can help organisations alter processes to enhance the customer experience and reduce complaints. This opens up a viewing lens through the eyes of the consumer, helping drive lower operational costs and ensures banks’ ability to deliver on its promises.

Through integrating a system that logs and classifies incoming complaints, then addresses these issues through a defined process, banks can gain full oversight over existing customer pain points. Using data to then construct a real-time picture to resolve complaints faster, cannot only result in vastly improved customer satisfaction but also lower operational costs.

According to McKinsey research, superior customer experience increases the chance that customers deposit higher balances, open new accounts and use more products at a bank. Customers are a banks biggest asset, not just financially but also in terms of trust and loyalty – giving an institution a sustainable, competitive edge.

Today’s organisations are competing on value, and winning over the modern customer often requires much more than a reduction in price. Customers want an enriching and seamless experience across all touchpoints, and challenger banks are setting the bar high for best practice.

It is essential to incorporate the customer journey as a core strategy in collaboration with intelligently informed metrics, informed by continuous customer feedback. Aligning customer journeys with internal processes will shift mindsets from a sole focus on internal efficiency towards a holistic approach to customer engagements; providing the much needed competitive edge in an increasingly saturated market.

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