Q&A with Tanmaya Varma, Global Head of Industry Solutions, SugarCRM

Over the past few years we’ve witnessed profound change in the land of retail banking – and we’re now in the midst of yet more disruption. The British Banking Association (BBA) recently revealed customer visits fell from 476m in 2011 to 278m in 2016 and in tandem with this, the use of banking apps is on the increase, with the number of payments up 54% from 2014 to 2015. 

But with the use of customer data increasing exponentially in recent years, legislation has also turned its attention to governing how banks use and share data. This year, the introduction of the Open Banking Standard is making it easier for customers to switch providers.So in an already competitive industry, with challenger banks snapping at the heels of the high-street stalwarts, what can banks do to stand out and attract – and crucially, retain – customers?

What does Open Banking mean for the industry? 

The Open Banking Working Group (OBWG) was set in motion following The Competition and Markets Authority’s (CMA) investigation into the UK banking industry. The CMA concluded that older, traditional banks in particular weren’t working hard enough to attract customers, or innovating at the pace required to meet the expectations of today’s modern consumers.

There are therefore two main reasons behind the new legislation: firstly, to accelerate digital innovation on the UK banking scene. And secondly; to stimulate competition between banks and make them work harder to win over customers.

Small and nimble start-ups like Atom may not have the same number of customers as the ‘Big 4’ yet, but what they are doing is shaking up the way customers engage with banks and manage their finances. There has been a shift in the industry towards not only mobile banking but ‘mobile only banking’; Starling Bank and Hello Bank are examples of European banks that don’t have a single branch to their names. This means traditional banks are under pressure to transform the service and experience they offer – or risk becoming outdated.

How is the use of customer data changing?

The OBWG’s Open Banking Standard(OBS) outlines how open banking data should be created, shared and used by its owners and those who access it. By opening up API networks, the new recommendations break down data barriers, and pave the way for banks to make the whole customer experience more seamless and transparent.

The OBS wants to ensure that consumers are fully aware of the choice available to them. It seems there is currently a lack of knowledge; the CMA found the average customer would save £70 a year simply by switching to the cheapest current account in the market.

What can banks do to keep customers loyal?

With customers able to compare and contrast banks’ products and services more easily, banks need to find a way to win over customers. What’s key to this is providing the kind of experience that makes the difference between keeping or losing a customer.

With research by Accenture finding that 34% of customers who switched financial providers in 2014 did so because of a poor customer service experience, it’s clear that banks need to not only consider their interest rates and mortgage applications but the service they offer. Managing finances can be stressful and confusing, so customers need to be reassured that whenever they interact with their banks, the customer-facing employee will know their background and be able to offer a seamless and holistic experience.

You’ll have noticed I’m focusing on human employees here, not robots fuelled by AI. That’s because I believe the personal, tailored service that only humans can offer will remain a vital part of the overall customer experience. But technology certainly has a crucial role to play in this; humans only have limited memories after all. This is why banks must constantly look to innovate to ensure their employees are using the best systems and work-flow tools to manage data and deliver a great customer experience.

How is technology helping? 

Banks have vast and complex infrastructures in place. This means teams need to work in a co-ordinated way to deliver the value customers expect; from marketing to sales, to customer service and so on. Regardless of which department the customer makes contact with, they expect their background to be known – and their needs understood and met with solutions.

The right technology is needed to aggregate the various data sources together, to consolidate customer information together in a streamlined way. This will benefit not only the customer experience – essential at a time when it’s so easy to switch providers – but also help employees work in the most efficient way possible and install confidence in each interaction.

Recently, we’ve also seen banks experimenting with even more creative ways to enhance the customer experience. We’re currently working with IBM Watson on using biometric facial recognition and chatbots to make the interactions more streamlined, tailored and efficient – it’s an exciting time to say the least.

What does the future hold for banks? 

Banks have been given a deadline of early 2018 to implement the new measures – so time is ticking for them to not only bring their infrastructure in line with compliance, but invest in a long-term customer experience strategy. With customers’ needs clearly at the heart of Open Banking, it’s up to banks to ensure they are providing a seamless, holistic experience that makes them more inclined to stay. It will be interesting to witness how banks evolve to offer this and strike the right balance between technology and the human touch.