Interview: How the role of CX is changing in the modern world of banking
Remco Veenenberg is a neobank expert, and he’s on a mission to redefine core banking. He is Head of Partnerships at Perfinal and a mentor in several FinTech accelerator programs. Remco frequently organizes FinTech events on the future of banking, creating a rare conversation between real heavyweights of incumbents, challenger banks & FinTechs. We sat down to talk to him about the future of CX in banking – what the stakeholders of the industry can expect and how clients’ behavior is changing.
What are the three most important tools in neobanks’ pockets for creating a more personal banking experience?
- Agility. If you can MVP quicker, you can test and validate with the customer and you can do that in a much faster, continual cycle. It results in a more fluent dialogue with the consumer.
- Specialization. Incumbent banks suffer from bloated portfolios, while neobanks tend to be built around one or two killer features. Of course, it remains to be seen how nimble and focused neobanks can remain while trying to expand and diversify, but for now, neobanks benefit from having razor-sharp focus.
- Thirdly, neobanks, as greenfield projects, can take advantage of new core banking platforms, either in-house or through a greenfield partnership with an incumbent bank and one of the new generation core banking platform providers. This also makes them more agile as they move forward; it allows freer financial expression, which means the bank isn’t restricted to silos when it wants to develop new, customer-focused, personalized experiences.
Should traditional banks learn from fintech firms in terms of creating a great customer experience? Or is it the other way round? What are the main tips and tricks they can pick up from each other?
It’s definitely a two-way street. I say that because traditional banks are often portrayed as being hopelessly slow and clunky. But that’s a mischaracterization.
It’s easy to be fast and nimble when you are new, with a clean sheet, and when you have a traditional bank’s core banking doing your heavy lifting, as we see with open-banking fintechs. Traditional banks are carrying enormous loads built up over generations, but they also carry an awful lot of expertise that is very hard to replicate.
However, traditional banks should learn - and they are learning - that they don’t need and shouldn’t try to do everything in-house. The open-banking ecosystem is an asset, cloud-native is an asset, so put it to work for you and your customers! FinTechs should learn that trust and reliability are important to customers. Sure, customers don’t look at a payment option on their phone and think: “Hang on - I wonder what their compliance score is?” But suddenly blocking customers’ accounts because you have a huge AML issue that you probably should have anticipated…That’s a problem for user experience. Traditional banks don’t have a spotlessly clean sheet, but they do take trust and reliability seriously.
How do you see the role of VR and AR solutions in overcoming banking challenges?
Will open-banking go Meta? Certainly, huge tech companies like Facebook are piling money into VR and AR, they see it as the next big game-changer. One of the obvious applications here could be a virtual branch interaction, where you sit across a table from your financial advisor or clerk.
That could be a 3D holographic projection of a real person in real-time or it could be an AI-powered bot. You could have a virtual shop or bank, where you walk around and select and view products, with immediate access to user reviews and comparable offers.
Or in a real shop, you could put on a pair of goggles and see different purchase options presented by different payment providers for each product on the shelves and displays. On the internal side, VR and AR could provide more immersive UIs for banking executives, you know, like those James Bond control rooms where spooks move 3D images around with little swipes of their hands. For me, it’s still at the avant-garde stage, so it’s speculative, but innovation needs experimentation. So, yeah, I’m interested to see what they try.
Do you think online customer feedback (either unsolicited, or collected with a CX survey) matters more to neobanks than to banks with physical branches, where clients can meet the banks’ colleagues?
Well, the CEOs of the UK’s biggest banks were on record this summer saying that 90% of their customers preferred online anyway, so on that basis, they should be just as interested as neobanks in online customer feedback.
Of course, the nuance is that IF a customer of a traditional bank feels, shall we say, motivated to give feedback, they know they at least have the option of going to their nearest branch for an in-person meeting.
This is an awkward point for neobanks:
they might be able to deliver more personalized services more quickly, but can they deliver the kind of personal relationship that would prompt more accurate and useful feedback?
Because feedback is necessary. Ticking a smiley face doesn’t give a huge amount of insight, and if a customer is using an online service for speed and convenience, are they really going to take the time to answer a set of questions?
How do you imagine the banking customer of the future? What will be their priorities?
I think the vast majority won’t be carrying cash around or even using it at all. Central banks will still be issuing cash and governments will be ensuring cash is accepted for all essential products and services, but it will be less than 10% of the population using cash. That’s important because it means any lingering acceptance or apology for slow or expensive manual processes will be gone:
customers will expect lightning fast, efficient services or they will switch - and they will be able to switch at the touch of a button.
I don’t think there will be much customer loyalty in that regard because it will be easy to migrate all your information from one provider to another.
There will also be more opportunities for people to become more financially literate, and as a result, they will want much more information about their products and financial health. More people will be involved in investments using micro-trading and digital currencies, and there will be crossover into other industries like real estate, education, and health.
What do you think of the role of omni-channel feedback collection (such as social listening, in-app reviews, etc.) in investment? Is it beneficial, and if so, do you think it’s being utilized as much as it should be?
I think it’s probably essential. We’ve already moved away from in-branch, in-person meetings which now only account for less than 10% of transactions and many customers almost never visit their physical bank, or they don’t even have a physical bank. So banks need to be creative about feedback collection - including using third-parties and incentives - without it turning into adware or nagware. It might well become a third-party specialization as standard.