The past two years have been incredibly challenging for the UK’s traditional banking sector. Thanks to the financial ructions of the pandemic, banking stocks hit record lows in 2020. Things didn’t get much better in the early part of 2021, with forecasts of economic contraction and the looming possibility of negative interest rates.
While many of the country’s traditional banks recovered through the course of the year, there were still casualties along the way. Through the course of 2020 and 2021, for example, three major UK banks shut down thousands of physical branches. While some of these closures were down to an accelerated shift to digital-first banking, there’s no doubt that cost-cutting measures also played at least some role.
But even with COVID-19 restrictions lifted and economic activity increasing again, banks still face challenges, most notably in the shape of fintechs. These startups combine innovative technologies with exceptional customer experiences and they’re coming for the traditional banks’ lunch. They’re no longer a minor threat either. Research from KPMG shows that UK fintech investments hit US$37.3-billion in 2021, seven times as high as in 2020.
Within that context, it’s more important than ever for banks to focus on creating the best possible experience for their customers. Crucial to that is breaking down silos within the organisations and consolidating the customer experience.
Recognising the issue
Before digging into how traditional banks can break down those silos, it’s worth noting that they aren’t thriving when it comes to customer experience. Research conducted in 2021 shows that half of UK consumers aren’t satisfied with their bank’s digital experience. Among millennial and gen z customers, that rises to 78% and 80% respectively.
Given that digital experiences increasingly make up customers’ primary interactions with a bank, it’s clear that something needs to change. Digital experiences define the way customers view financial institutions, and the organisations that have superior experiences will retain customers longer and gain new customers faster. Specifically, banks need to break free from the constraints of outdated procedures and legacy systems to provide consolidated experiences to their customers.
Breaking down silos
While that sounds simple enough, it’s important to remember how deeply entrenched those legacy systems can be. Many were built for a time when people’s primary interactions with a bank were still in-branch. They can also prioritise systems-oriented design over the needs of the customer.
Those kinds of scenarios often result in disparate silos where each team focuses on a specific discipline. That results in the customer having a different experience every time they deal with those different departments. In the worst instances, it can even result in customers having inconsistent experiences on every bank channel they interact with
. That kind of fractured experience will eventually erode a customer’s confidence in a bank and lead to them taking their business elsewhere.
When it comes to breaking down silos and providing a unified customer experience, technology can go a long way to helping. A digital experience platform (DXP), for example, can be critical in seamlessly connecting a bank’s business, systems and customers. Additionally, it can provide banks with a single view of their customer data, reducing confusion and allowing them to evaluate and improve their business processes.
With this single view of the customer, banks give themselves the opportunity to support and engage with customers across various touch points—from initial marketing to post-purchase. More importantly, it allows banks to offer relevant content to their target audience with an omnichannel strategy through a single cohesive platform.
Additionally, DXPs integrate existing systems and distribute content across all touchpoints, allowing banks to build complete experiences that attract the right audience. Critically, those experiences are consistent, whether a customer’s monitoring their portfolio on a mobile device, looking for answers to an account query on the web, or engaging in a transaction that requires them to be in-branch. Banks can also implement a unified intranet that connects employees and provides everyone with a 360-degree view of their clients.
A matter of survival
Let’s be clear, we are long past the point where banks can approach this kind of customer-centric digital transformation as a nice-to-have. Every organisation their customers interact with has undergone radical digital acceleration over the last two years. If their bank fails to match those standards, there are a growing number of competitors out there willing to take their business. It’s also never been easier for customers to make the switch.
Breaking down silos and creating great, consolidated experiences is therefore imperative to the survival of traditional banks going forward.