Culture and Talent

Avoid ‘FOMO’: Why banks need to focus on humans, not tech

  • Banks like to talk about customer experience, but they still largely conduct their businesses around product cycles
  • Employee experience is key to customer experience, so banks should be employing fintech for internal operations and leave consumer fintech to startups

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Avoid ‘FOMO’: Why banks need to focus on humans, not tech

Now that banks have embraced fintech and the digital transformation of the industry with all its growing pains, it’s time they start focusing more on internal operations and culture than external partnerships and technology.

That’s the key takeaway from top banking industry analysts on stage at Finovate, an annual pitch event for startups to showcase their businesses to banks, investors and analysts — although this year the event also includes typical conference panels with speakers from the legacy side of fintech.

Customer experience is perhaps the differentiating banking product, said Dan Latimore, svp of Celent’s banking group. But for all the time and energy financial institutions spend talking about it, it’s like they don’t actually realize it; they still largely conduct their businesses around product cycles and need to change that from the inside out.

“Many financial services firms spend way too much time focusing on emerging technology because they have this FOMO,” said Alyson Clarke, a principal analyst at Forrester Research. She highlighted Ally and USAA and examples of banks re-organizing around customer journey. “Sadly, what they’re not spending time on are the underlying obstacles and barriers stopping them from innovating and getting ahead. Fix your culture gaps.”

Here are three takeaways from the analyst session.

Banks should invest in fintech for the employee experience
As important as it is that banks have embraced meeting their customers in digital channels, one of the keys to customer experience is human employees, Latimore said.

Celent surveyed banks’ top priorities for improving customer experience. At the top: mobile banking channel development (96 percent), omnichannel delivery (77 percent) and measuring and optimizing the customer journey (68 percent). At the bottom, artificial intelligence-based initiatives (6 percent).

“How do you treat your customers with the experience you give them physically and in the branch and your call centers through your other connections?” Latimore asked.

Employ artificial intelligence, specifically robotics process automation, natural language processing and natural language generation.

“You’ve gotta keep employees interested and engaged, let them focus on higher-value stuff and you’ve gotta change them as well. Improving that employee experience is critical.”

Banks should weave humans into their omnichannel delivery
Kevin Morrison, a senior analyst at Aite Group, talked about an instance where he was browsing banking products on US Bank’s website.

Later, he received a call from an associate who works at the US bank branch up the street from him. It wasn’t from an unknown number or from a person working in a remote call center. The associate wasn’t selling Morrison anything or trying to get him to come visit the branch. It was just a follow-up call. She saw he was on the website looking at different products and wanted to see if he needed anything further or had any questions.

Omnichannel banking should be more about the “integration of technology and the ability to leverage that technology,” Morrison said, rather than just providing multiple digital channels. With these types of basic follow-up calls, “U.S. Bank and others are leveraging their people for proactive activity using omnichannel type integrations… They have a customer service screen they are now able to call out.”

The business of banking is built on relationships. Lately, the answer to relationship-building in digital channels — including in Finovate pitch presentations — has been chatbots and voice interfaces.

“I haven’t seen how that kind of technology establishes relationships,” said Morrison said.

While there’s nothing terribly wrong about another channel or another interface — and to be fair, the industry hasn’t had enough time yet to see the full potential of AI’s impact on banking relationships — analysts aren’t sold on how they improve customer service.


Banking is about people, so it should be more empathetic
Stessa Cohen, a research director at Gartner, says the future of fintech is about “digital empathy,” not transactions.

Digital empathy is “the ability to sense problems and needs of customers that they have and how that will impact the customers life, goals and needs.” Using their troves of data, banks should be able to read, for example, when someone receives her phone bill and it’s significantly higher than it was the previous month — and tailor their interactions based on that information.

Empathic banking in theory even accounts for the weather, and registers if the temperature is oddly high for the season.

“Digital banking initiatives by 2021 will fail because they’ll be unable to deliver an authentic banking experience that customers trust.”

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