This article was first published in Future Banking and at www.nsbanking.com.
The pandemic has accelerated banking’s move to digital channels–and the future will depend on improving mobile engagement for corporate clients and their customers. Matt Tuck, head of commercial customer propositions at NatWest Group, and Lorraine Twigg, VP enterprise and partner sales EMEA and India at Syniverse, tell us how to create an effective mobile ecosystem
Corporates have always been banks’ most profitable customers–and in the era of digital services, the challenge for banks is to help those corporates engage more effectively with their own customers. The Covid-19 pandemic has put pressure on banks in terms of payments processing, service delivery and the pace of digital transformation–which have all made investment in innovation a top priority. If banks are to respond quickly to the demands of digitalisation, they will need to accelerate their innovation strategies. “Banks are innovating at a greater pace than we ever have [before],” says Matt Tuck, head of commercial customer propositions at NatWest Group. “I would argue that digitalisation goes far wider than innovation–but the pandemic has helped to accelerate the drive for banks to continually look at ways to improve how they engage with customers. It is fair to say that what can be digitised will be digitised, but one size does not fit all.”
Unsurprisingly, the pandemic has driven a significant uptake of digital channels, as physical channels have become less open to customers–58% of NatWest’s engagement with retail customers is now digital, as is 67% of its commercial sales. “What we found during the pandemic is that many of our customers still want to talk to a person about the challenges they are facing and how we can support them,” Tuck continues. “So, while we are always looking for ways to improve our digital experience, it is definitely a blend of people, technology and investment.”
Proprietary systems belong in the past
Banks once believed that innovation came from within, but building proprietary technologies brings huge expense, as well as problems with compatibility and scalability. Now, working with fintechs and other providers is a central pillar of banks’ strategy–not so much to keep up with competitors, but to keep in step with their consumers. “We are seeing the industry evolve at a rapid pace in terms of digital transformation, not least because of advances in technology like artificial intelligence,” says Lorraine Twigg, VP enterprise and partner sales EMEA and India at Syniverse. “Digital trends tend to start with consumers and then shift to B2B models over time. In retail banking, a huge part of that transition is the adoption of mobile engagement channels by banks.” With over 30 years’ experience, Syniverse, a global leader in the mobile messaging ecosystem, partners with large financial enterprises by providing consulting and omnichannel messaging solutions (CPaaS) leveraging a white-glove approach. These partnerships carefully review digital transformation plans and provide meaningful, innovative, future-proof solutions in the area of messaging, identity and orchestration. “Banks have invested significantly in the capability to allow their consumers to transact on the go, 24/7,” Twigg explains. “Customer habits are changing, so we are looking at how this translates into the B2B space. Banks are fundamentally information-driven businesses, and widely deploy technologies like AI and big data. This knowledge that they hold, coupled with the ability to reach customers in real time, could lead to some new and unique business models in the corporate world.”
Insight at the speed of thought
For banks, attracting and engaging corporate customers will depend on quick responses and the ability to turn data into valuable customer insight. “One area we are looking at is how banks can leverage all of the data they have acquired through their digital investments to provide meaningful insights into consumer behaviour to their corporate clients and help them target more accurately and increase their revenues,” says Twigg. “Banks are in a very unique position to help corporate customers target the customers that are in the best position to purchase, and they can leverage mobile engagement methods that banks have already deployed.” Banks are investing heavily in ways to reach customers at critical moments in the buying cycle. That investment can be put to work for corporate clients, with whom banks can strengthen their relationships by allowing them to leverage that intelligence. “Banks need to be alive to what their customers’ needs are at different stages of their life cycle,” says Tuck. “As we saw during the pandemic, their needs changed almost overnight and the way in which banks react to that need is key to continually being able to service our customers in the right way.”
A prime example is NatWest’s support for customers seeking loans through government schemes in the UK during the pandemic. The bank quickly set up the application process for ‘bounce back’ loans; a process that, in the past, would have taken months. Over a weekend, it created a digital, end-to-end process for NatWest customers. “It’s that kind of reaction using the data insights that we have on our customers to drive the right outcomes that will be key to our success going forward,” says Tuck. “Understanding the customer’s needs and having personalised solutions is key. So, looking through our commercial customers into the type of customers that they’re supporting, and bringing insights to support that is a really good opportunity.” Twigg gives the example of a car loan application. Rather than receiving just a letter or email, the customer could receive a loan acceptance message via a mobile device, along with links to preferred cars that fit their value criteria. That could come from a car dealership that is also a corporate client of the bank. Coming at the same time as confirmation of the loan acceptance, the potential purchase will be top of mind, which could significantly increase the likelihood of a purchase.
“You can apply the same to home improvements or holidays, directing the end consumer to the brand, at the most pivotal time in the buying process,” Twigg adds. “The bank is providing real value to the corporate client, which is able to leverage the bank’s insight, intelligence and communication channels. The bank is in effect providing real value to those corporate clients, helping them secure customers, helping their customers to join the dots in terms of their decision making. It can accelerate revenues for corporate clients and create more stickiness with them.”
Primed for partnership
Instead of investing in their own systems, banks are more focused on investments in innovation through partners. One key area is the development of APIs to allow customers to get direct access to banks’ systems from wherever they are. “We have the ambition to be the bank of APIs and we are spending a significant amount of time and energy at the moment looking at how we best plug in our own capabilities,” says Tuck. “In the UK, Open Banking presents a huge opportunity for using data to help customers be more insightful, as well as helping the bank to be more relevant.”
Blockchain is also on the agenda in areas such as trade finance, which is typically mired in paper-based processes–but could be a much more seamless experience with better risk mitigation. Even more important, however, is the creation of an ecosystem that connects the dots between retail customers and commercial clients, and links them to both banking products and non-banking products in a seamless and efficient way. “Customers don’t care about banking products, they care about the outcomes that those banking products can provide,” says Tuck. “So, providing a suite of solutions for customers that is simple to navigate, whether we provide them as a bank or whether we partner with third parties, is going to be the future for financial institutions.”
In terms of engagement, this means linking brand banking apps with other channels, not least social media, to give customers choice about how they interact and creating two-way communication that fosters engagement and loyalty. “These are becoming features of omnichannel engagement,” says Twigg. “It’s the combination of them that is key for banks and the corporate customers to embrace. But ultimately, the most effective communication should always put the customer preference at the heart of it.” As in-person, in-branch interactions tailed off during the pandemic, an omnichannel strategy became more critical than ever. People, digital services, products and automation are all pivotal to being a relationship bank and blending efficiency with personal engagement. The mobile ecosystem of the future will certainly bring banks and their customers closer together