It wasn’t always like this
Amidst the near-constant criticism of the banking industry’s technical debt, we should remember one simple fact; this sector was once renowned for its innovation and forward-thinking.
As my colleague Ben Robinson (now of Aperture, formerly of Temenos), noted in his excellent article late last year, banks were originally forced to build their own software to serve the scope of their ambition. There were no ready-made solutions for calculating interest and fees, for example, that could be bought and plugged in.
Despite the eventual emergence of packaged software, most banks continued to build in-house on top of their existing stack. With each new idea, objective and industry trend, there came a new system, a new piece to add to the puzzle. Some parts were replaced over time, most were not.
And that is how banks have ended up where they are now, sitting on a jumbled pile of technologies, trying in vain to make them work in harmony or attempting to unravel the mess one strand at a time, without toppling the entire house of cards. That has not been easy and the costly, decade-long transformational projects still linger in the memory. Some of them are still ongoing.
The latest wave of digital transformation in banking is concerned with CX, which is the single most important point of differentiation in the market right now.
This is our particular area of expertise at Xtremepush. That might be helping banks to nudge digital users through the registration and onboarding process, deliver real-time transactional and security alerts, or exceed loan book targets through intelligent targeting.
Success or failure in all of these objectives is dependent on the same thing; what you do with your customer data.
Less is more
The route to better use of data (and in turn a better CX) is not more technology, but less. The goal for 2020 and 2021 must be consolidation, with fewer moving parts and fewer vendors. That’s our mission here at Xtremepush, to deliver a single, seamless solution for understanding, decisioning and engagement.
To illustrate how we do this, let’s think of a bank’s engagement tech stack as being made up of three distinct systems; record, intelligence and engagement.
Where banks previously had to rely on a multitude of service providers to execute an effective communications strategy, we’re now acting as both the system of intelligence and system of engagement.
The system of record meanwhile will continue to be whatever core banking solution you have in place. The open architecture of our platform allows us to integrate seamlessly with both the cloud-based solutions and the legacy backend systems.
In banking, there were historically two seemingly impenetrable “moats” that kept business stable; good old-fashioned customer loyalty and the difficulty of switching. You don’t need me to tell you that these moats have been eroded.
It’s becoming less and less of an inconvenience to switch banks, with most of the difficult work taken out of the customer’s hands.
Meanwhile, the biggest threat to loyalty is irrelevance. The moment your customer no longer perceives you as adding value to their unique experience is the moment you’ve lost them. This is where the challenger banks have gained the most ground. They have built a product built around convenience and tailored experiences.
I’ve written before about the banking sector’s “customer-data warfare”, because that is where we see the battle between incumbents and challengers, and between incumbents themselves, is being won and lost.
In a brilliant article from 2017, Jerry Chen writes about how ‘The battle is moving from the old moats, the sources of the data, to the new moats, what you do with the data”. That’s the system of intelligence’s role, with decisioning capabilities and predictive models determining what message should be delivered to each customer and how.
Unless banks can make better use of their customer data they will soon find themselves without any data at all. Users will turn to alternative banks for their day-to-day purchases, and visibility of their behaviour is lost.
This transactional data, how much your customers are spending and where, how well they are managing their finances and so on, this is the lifeblood of a profitable bank. Combined with this, you also have zero party data; information related to your customer’s preferences, needs and future intentions.
The challenge is to unify all of this data to create accurate portraits of your customers as individuals; the single customer view.
Dismantling the data silos
Let’s start at what is, for many banks, the biggest barrier to delivering exceptional customer experiences; data silos. Banks aren’t suffering from a lack of data. In fact, very often it’s the opposite.
Banks are swimming in data. Time and time again, however, we see that it’s cordoned off in silos, accessible to some departments and their systems, but unavailable to others. When we start working with a new banking client, this is usually the first problem we need to address.
The diagram below provides an insight into the architecture of our engagement, personalisation and customer data platform. One of its strongest suits is the ability to ingest data from a variety of sources, whether it’s collected directly via our SDKs (from a bank’s website or app), received in real time from a back-end solution via API or coming in from a separate third-party provider within the bank’s ecosystem.
Through a cross-device customer identification process, we create a complete profile of each customer (including their historical behaviour and attributes like loan-propensity) making it easily accessible and usable. In other words, the genuine single customer view.
From here, the task of determining the next-best-action for a customer suddenly becomes easier to solve. To achieve this, we combine A.I., advanced automation based on real-time event triggers and micro-segmentation capabilities. Not only does it decide the correct message, but it identifies the right channel to deliver it on, accounting for the individual customer’s preference, the urgency of the message and the appropriateness of the channel itself.
How this manifests itself depends on the particular use case; it might be an in-app message helping a customer to self-serve when they are struggling to log in or order a statement, or it could be an email sent to a user who has shown signs of interest in taking out a loan and is likely to be approved.
That’s what a system of intelligence looks like in action.
And of course, the final piece of the jigsaw is actually delivering the campaigns themselves. This brings us to the system of engagement.
Consolidation must also extend as far as the engagement channels themselves, unifying them within a single system. Otherwise, you are simply creating more data silos that need to be addressed.
Within the Xtremepush platform, we offer the widest range of engagement channels available, for both website and mobile app. Excitingly, we have also added A.I.-driven conversational chatbots, which are helping banks to efficiently handle the increasing volume of online questions, dealing with the most common issues quickly while escalating only the most complicated tickets to their call centres.
Essentially, what we’re doing is allowing banks to close the engagement and feedback loop, collecting vital behavioural data on every open, click-through and interaction that occurs across all of your channels. This data, in turn, is fed back into each customer’s profile in real time, improving the relevance of the next campaign they receive.
This is the system of intelligence and the system of engagement working in harmony.
The banking industry can once again take the lead in technical innovation, but it must open itself up to fintech partners who truly understand the challenges that it faces. I invite any banking professionals, regardless of where they are on their roadmap, to get in touch with me. Let’s sit down and identify the ways we can accelerate your transformation and start delivering better customer experiences quickly.