Understanding technology, and the newer use cases that have emerged in financial services, is very important. Customers' contexts have changed.
While financial services, as we know, has been evolving at a rapid pace over the last few years, the speed of technology adoption has been amazing over the last 3 years. It has gone up multi-fold exacerbated by COVID 19 and the willingness of people to explore the newer experiences powered by technology. Business, Credit, Operations and even HR units have tremendously benefitted from this transformation in more than one ways.
Result: BFSI is slowly, but steadily, moving away from being monolithic organizations, to agile and nimbler orgs., driven by technology. In fact, technology now seems to be at the core of everything they do.
In this scenario, we at Execute believe that the next decade in financial services will have 5 cornerstones:
1. Automated humans (RPAs)
2. AI enabled servicing
3. Digitized core platforms
4. Instant user experiences (UX)
5. Disruption in fee based businesses.
As a team of industry veterans, we are well positioned to help steer organizations through these disruptions. But first, let’s delve deeper into each of the above.
Automated humans (RPA)
Humans have always looked for better ways to do things. Technology has regularly helped us render tasks mundane. What becomes mundane, will rapidly get automated.
Some examples of how robotic process automation (RPA) has replaced humans in our industry:
● Email marketers have largely been replaced by marketing automation platforms like Salesforce and Adobe.
● Feet on street personnel who would earlier visit each customer opening a new bank account are now being replaced with video KYC.
● Customer leads are now found by Google’s search and ad algorithms.
● Manual form filling is now replaced by OCR tools.
So how does automation, or RPA, help us?
★ Higher efficiency - RPAs can be several times faster than a human.
★ Saves money - Cost of RPAs are much lower, as output per RPA is much higher.
★ Improves accuracy - Machines are highly accurate, and rarely make manual errors like humans, when it comes to repeatable tasks.
AI enabled servicing
Artificial intelligence (AI) will be a massive enabler for financial services, if used correctly.
● Have you ever had a customer who was irked by the fact that nobody picked up when he called your organization after working hours?
● Have you ever had your customer service team tell you that they wished people would stop calling for mundane tasks like their account statements?
● Have you ever wondered how your sales team can get more revenue out of a customer?
AI lies at the heart of answering each of the above questions.
An automated chatbot, configured with the right rules and keywords, can be your virtual customer service agent, available 24X7!
The same chatbot can also throw up every kind of statement that your customers could call for, so your real agents can attend to more complex issues!
A powerful data platform that predicts the next best action (NBA) which a customer is likely to take, coupled with a well rounded marketing automation platform that nudges the customer towards taking this action can help boost your ARPU like never before!
A study from Netflix revealed that their recommendation engine, which leads customers to the next best movie or sitcom, adds almost USD 1 billion in revenues!
Digitized core platform
Traditionally, the way a BFSI company would work is:
➔ customers would visit their nearby branches
➔ they would ask for the service they needed
➔ a branch representative would verify the customers’ details first
➔ the representative then takes up the service request
➔ and forwards the request to the regional HQ to get the work done
➔ once the request is resolved, representative gets back to the customer with update.
Today, these offline branches are being replaced by online branches like websites, apps and chatbots.
In such a scenario, financial services players will have to invest in a core platform that replicates the above steps online. If we were to refer each of the above steps in today’s digital world, here’s how they look like:
➔ customer visits an online branch - website, app or chatbot;
➔ customer clicks a button, verifies his/her identity;
➔ customer raises an online service request;
➔ service request gets logged by an online RM, called a service API
➔ An intelligence layer in the core platform forwards the service request to the relevant team/owner
➔ once request is executed, the service API connects with the customer and shares the update with necessary details.
The challenge lies in building a robust core platform, which operates efficiently at the scale of a bank, with minimal downtime, and provides the following services:
★ Robust API architecture
★ Modern data management
★ Strong cybersecurity
★ Scalable infrastructure
★ High performing cloud computing
Instant user experiences
Have you ever tried to desperately look for a bank branch, for hours through busy lanes and bylanes? Only to realize you would have saved hours, if only the bank could put up a simple board with the right direction marked on it?
That’s kind of what a bad user experience is - when someone walks into your website or app.
Often, the website/app is either so crowded with menu items that one can see everything except the service one is looking for. Or, it’s so scant, that one can’t even find the most basic information!
An effective UX moves customers, or potential customers, to their destination in the most time efficient way. For a UX strategy to be effective, users must be provided with:
● good navigation
● crisp and clean layout
● clear product descriptions
● effective calls to action
● relevant and timely communication
A bad user experience can push customers away from you, and towards your competitors. Smoother the UX, higher your rates of acquisition and retention!
Disruption in fee based businesses
Democratization of financial data, and a surge in new age startups can eat into fee based income streams of financial services firms.
Some examples of the upcoming competition:
● zero MDR on UPI payments
● reduction on income from regular services like issuing chequebooks/DDs as customers have moved to online payments
● decreased earnings from 3rd party products like mutual funds, due to rise in app based MF distribution startups
● discount brokers offering services at flat fee, much lower to full service brokers
● drop in new locker requests, due to increased investments via digital gold app
A successful BFSI company of the future will be the one who will adapt strategies that embrace the disruptions listed above, and leverage them to come out on top.
If you are looking to partner with a team who can help you create a future proof strategy for your business, reach out to us today on email@example.com.