Over the course of the last decade, retail banks have transformed the way they operate in a bid to meet a dramatic change in customer behaviour.
According to the most recent BAI Banking Outlook survey, today’s financial services customers want to be able to interact with their bank using a mix of channels. By 2024, consumers expect 61 per cent of their banking business to be digital, with almost half of these interactions to involve human assistance, such as through chat or other messaging services.
“Customers have high expectations when it comes to digital,” explains Chad Hamblin, Microsoft’s director for worldwide financial services. “They live increasingly digital lives and expect their online banking experiences to match those they get from digital-first providers such as Amazon and Netflix. But that doesn’t mean that there’s no place for the branch. Human contact is still very much in demand, especially for support around more complicated products and services.”
Today’s customers are also more empowered than ever – and have more information at their fingertips. “It’s so easy for them to conduct research online,” Hamblin explains. “They can read reviews, speak to friends on social media and compare offerings instantly. What’s clear is that customers won’t put up with bad service – they will simply move to a new provider, and quite possibly to one of the many fintechs and challenger banks that have entered the market,” says Hamblin.
This is a difficult environment for traditional banks to survive in, let alone thrive. However, with challenges come opportunities. Those banks that have found a way to level up against the competition and excel at delivering truly exceptional customer experiences are positioning themselves for success. Client-centric businesses, after all, are 60 per cent more profitable than companies not focused on the customer, according to Deloitte.
Those that are getting it right understand exactly what their customers want. “Research suggests that today’s consumers want to feel special,” says Hamblin. “They want personalised offerings, and they want their bank to understand them as both a household and an individual. We’re not talking about basic monetary needs here, but financial goals and aspirations, life events and overall financial wellness. Ultimately, they are looking for a trusted advisor – and they want their bank to be there for them at the moments that matter.”
Customers also want better and faster services. “Speed matters,” says Hamblin. “Today’s customers live busy lives, and they want to bank at a time and a place that suits them. Banking has to be fast, easy and convenient. Essentially customers want seamless omnichannel experiences.”
Finally, customers also want accessibility. “To provide a strong banking service today, you have to make it accessible to all,” says Hamblin.
Success, then, requires quite a juggling act. “Really, the heritage of banks is processing monetary transactions as quickly as possible,” Hamblin explains. “But their role has evolved to encompass so much more than that. They need to become a trusted advisor, they need to stay on top of risk and compliance, they need to deliver omnichannel experiences, and they need to make sure they are innovative enough to attract new customers in a saturated marketplace. It’s not easy – especially when you consider that recently all this has had to be done with the pandemic as a backdrop. However – thanks to technology – many banks are making incredible progress.”
New solutions from Microsoft and its partner community are helping banks right across the globe to deliver on the new expectations of today’s customers.
“Microsoft is unique in the market,” says Hamblin. “Most other vendors provide only a partial solution of the overall customer experience. It might be a self-service solution, for example, or an analytics tool. We’re different. We have a holistic set of solutions that can help banks deliver that end-to-end customer experience, all based on a common platform.”
Then there’s Microsoft’s enterprise-calibre solutions, customer relationship management offerings, social media investments, its voice technology and survey capabilities, not to mention its predictive analytics, business intelligence and machine learning expertise.
“It is worth noting that the Microsoft Cloud for Financial Services directly leverages those enterprise caliber solutions and is an end-to-end solution designed with the unique needs of the industry in mind,” says Hamblin. “By integrating existing and new capabilities in Microsoft 365, Azure, Dynamics 365, and Microsoft Power Platform, Microsoft Cloud for Financial Services unlocks unprecedented value.”
Perhaps what’s most exciting, however, is Microsoft’s recent acquisition of Nuance, the US-based company that specialises in speech recognition and artificial intelligence (AI) technology. Driven by a shared aspiration to deliver outcomes-based AI, Microsoft and Nuance will enable banks and other financial services organisations to accelerate their business goals with security-focused, cloud-based intelligent solutions.
Nuance is enabling many of the accessibility benefits that Microsoft technology can deliver, such as self-service and authentication offerings using speech recognition and voice biometrics, live agent assist, intelligent case resolution, AI-driven recommendations, sentiment analysis and more.
“Completion of this significant and strategic acquisition brings together Nuance’s best-in-class conversational AI and ambient intelligence with Microsoft’s secure and trusted industry cloud offerings,” said Scott Guthrie, executive vice president of Microsoft’s Cloud and AI Group, in a press release announcing the acquisition. “This powerful combination will help organisations in every industry create more personalised and meaningful customer experiences.”
“With Nuance, we have added to our capabilities, specifically around self-service, chat bots, authentication, fraud prevention, next best action, and other capabilities too,” says Hamblin. “We’re really bringing the best of the best together – and all under one roof.”
Hamblin believes the acquisition is perfectly timed to support the convergence of AI-enabled self-service and human-led channels. “Nuance and our BizApps Suite can enable that closed-loop customer experience,” he says.
Bringing Nuance on board is also expected to strengthen Microsoft’s accessibility offering. “These tools are already helping some of our biggest banks – such as NatWest in the UK – to reach more customers, and deliver a high level of service to everyone. Not many IT companies are able to match the investment we have made in accessibility.”
But Microsoft won’t stop here. “The path to greater accessibility gets more exciting when you include the metaverse,” says Hamblin. “Virtual branches mean that customers can get a full branch experience, but without leaving their homes. Think about what that means for customers with mobility issues.”
With all this in mind, Hamblin firmly believes that there’s a bright future ahead for the banking industry. “We’re in a position where we can now successfully adapt the traditional banking model for our increasingly digital customers – and that’s a really strong place to be. I’m excited about what lies ahead.”
A variety of Microsoft partners also contributed to this feature: Finastra, Zafin, Anywhere365, VeriPark, Melissa and Metafile Information Systems. Read about how they are helping financial services organisations to deliver exceptional customer experiences that drive loyalty.
This article was originally published in the Summer 2022 issue of Technology Record. To get future issues delivered directly to your inbox, sign up for a free subscription.