Digital Adoption in Financial Services

In the financial services sector, the risk appetite of many banks changed post-2008. In the subsequent years, many challenged their analytical resources to refine, adjust and provide models that ensured they were lending to a cross-section of individuals who represented ‘credit-worthy’ customers.

For many UK banks however, this will have meant that they skewed towards an older cohort (with a longer and better credit history) and as such, in 2020 many banks have an older ‘book’ of customers.

This is great from a credit risk point of view (especially during the period of economic instability that we are currently facing into), but less so from the perspective of digital adoption and digital onboarding.

Banks are feeling the pressure of this first-hand right now, the operational pinch-points are incredibly evident. Every banking app you open at the moment has an interstitial message about the high call volumes and slower response times of overwhelmed call centres.

Further difficulty is created by the nature of the customer contact. Some of the older callers will merely want reassurance, a balance enquiry, an update on which branches are open and when etc. all information that can be accessed via digital.

By making digital platforms the first stop for customers and the face of customer service, banks can not only deliver better customer outcomes, but save money, reduce operational complexity and have auditable interaction trails.

There are a number of reasons why banks are in this situation in the first place:

  1. The customer was and is always right – Many banks don’t want to ‘force’ digital solutions onto their book, preferring to ‘support’ rather than explicitly insist upon digital onboarding
  2. The product mix – The reasons to have a banking app are clear for a transactional current account or ‘front of wallet’ credit card, but banks have struggled to justify and deliver useful apps for Insurance, Pensions, Mortgages, Loans, Money Services and other products which have a less tangible reason for day-to-day interaction
  3. The digital solutions – Certain financial services organisations don’t particularly like, nor support their own migration to digital servicing and haven’t adopted a programme of continuous improvement to get the UI and UX right
  4. The onboarding journey (or lack thereof) – Whether it is communication, download, verification and/or ‘how to’ content. The value proposition needs explained, people need upskilled and work needs to be done to make the digital solution ‘first port of call’

The way to successfully navigate a course out of this operational cul-de-sac is to look to close the competitive gap in customer and user experience, this can be achieved through a commitment to a programme of work focused on a finely balanced mixture of digital execution, UX, marketing and communications.

To see how the competition are approaching this, you could collaborate with a digital partner to evaluate user journeys and on-boarding across a competitive set. Seeing screen captures from other financial services digital journeys may make it easier to see where your focus needs to go and where your existing pain-points are.

Once you have accepted the art of the possible, then you need to define a programme of work aligned with some serious business-wide KPIs. In some UK banks, adoption of their own banking app sits at less than 15% of their customers. By setting ambitious targets at the macro level, you can assemble cross-functional teams, all of whom are focused on the impact that they can collectively have on a single (or range) of metrics, which may remove the localised focus on ‘doing what’s right for product, UX, commercial, marketing or brand’ and shift eyes upwards.

By moving the dial on digital adoption by 10-20%, the operational costs could be reduced massively and the money re-invested in solutions that map to even better customer outcomes (e.g. machine learning powered robo-advice).

Even ‘challenger’ banks have these challenges on their doorstep, so this isn’t by any means a comment on the big four. They arguably have thought about a long-term strategy related to this phenomena a long time ago (e.g. Barclays’ Digital Eagles).

At Waracle, we are here to solve business problems by adopting the right technologies, building the best solutions and curating the flows, journeys, content and communications to maximise your user adoption and customer communications.

If you want to talk about your project, get in touch today!


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