How does a customer choose their private bank? What distinguishes one private bank from another? In private banking, the service offering is often comparable and prices do not play a primary role.
A bank’s greatest distinguishing feature is its customer experience. But since customers’ expectations and habits have changed over the years, it’s vital that banks come to grips with new behavioural patterns. In addition to phone and face-to-face contact, private banking customers nowadays also use email and social media to communicate with their advisor and conduct bank transactions. Digitalisation plays a pivotal role, allowing for stronger customer orientation and a better focus on individual needs.
Customer experience essentially depends on investment performance, the efficient and correct execution of banking transactions, how the customer views the company, and the personal relationship of the wealth manager with the customer. What is often asked is whether the personal feel of customer experience can be maintained when using electronic channels.
Forward-looking software development?
Banks frequently try to supplement customer experiences with online services, electronic channels, social media presentations, and mobile applications. The success of these measures is often modest. Although the banking industry had invested more money into IT than any other industries, research institute Forrester Research conducted a market study in 2016 and concluded that customers’ expectations remained unfulfilled, especially with mobile banking applications (cf. Forrester’s 2016 Global Mobile Banking Functionality Benchmark). According to Forrester, this is because banks continue to select – especially in the case of digital customer services – an outdated software-development approach. However, these services are developed with primarily stable target states in mind. In addition, the budget that banks provide for IT is primarily for the initial development stage. As soon as the application is “live,” it is reduced and limited to mostly correcting software bugs.
If an enterprise wishes to exist in the long term, it should no longer regard digital technology as a means to an end. Digital transformation is no longer a single step to finally regain a phase of stability, but an ongoing condition of change that is less predictable than ever.
Flexible processes are demanded
Nevertheless, the present-day banking world continues to be strongly characterized by the idea of stable and structured processes; this underlies the conviction that positive economies of scale can be achieved through standardization. Standardized business processes undisputedly have their place and will continue to do so. However, pure business process solutions in the traditional sense simply do not offer the necessary flexibility to make changes to the process quickly and frequently. It is precisely flexibility that is required to be able to exist in a perpetual state of digital transformation, whilst complying with the increasing number of regulations and avoiding an explosion in costs.
Work automation at Appway
The concepts and ideas behind work automation offer a very promising alternative. In the Digital Age, a new form of automation which pursues a collaborative approach between man and machine is becoming increasingly important. Thanks to intelligent and adaptive algorithms, such as those capable of learning, the machine is able to automatically and continuously extract facts and relationships from data. Work automation enables humans to make quicker, sounder, and more viable decisions, without getting preoccupied with the details of information procurement. Through new user interfaces and artificial intelligence, automation is being further advanced. Machine and man will thus increasingly merge.
In private banking, client onboarding may soon take place in the following way: the computer listens to the conversation between the customer and his advisor. In doing so, the computer captures and analyses the relevant data, opens the corresponding account automatically, and immediately makes a proposal tailored to the customer. In this process, the machine takes regulatory compliance into account, and the account officer has more time to develop a relationship with the client.
Nowadays, relationship managers have various moving pieces to manage and important regulations to keep in mind. As the example above shows, tasks such as recording data, maintaining lists, and sorting e-mails will soon be a thing of the past. The goal is to become increasingly unburdened from administrative activities and deadlines, and thus to focus more on the customer. A targeted approach can then be taken to address customer needs, and services and proposals can be better tailored to them.
As described, automation supports the relationship manager so that she may focus on developing new client relationships or nurturing existing ones. The personal contact and relationship with the client remains, but it is supplemented by electronic channels. Therefore, customer experiences of private banks in the future will be hybrid.