Customers’ expectations have risen. A smooth, personalised experience is the new norm and front runners include the likes of Spotify and Amazon. Consumers now demand the same experience from all services and that does not exclude banking.
To provide unparalleled customer experience, banks need to improve their capacity to innovate from within, and at pace. Why? Because they need to provide intuitive and accessible products and services that fulfil customer expectations at the same pace as the new banks on the block.
Customers don’t care about legacy operating systems and the need to refine back-end processes. Quite simply, with so much choice, customers will move away from banks that don’t deliver services the way they want them to.
So, how can these large organisations spur fast paced innovation? As cliché as it sounds, my first answer is culture. Specifically, 2018 should be about rebalancing the importance placed on managing existing business with creating new business. Leadership must work to create an environment in which customer centricity and innovation can happen.
Inherently, new business ideas carry more risk. And typically risk and reward structures in large corporations tend to prohibit innovation. This is because the career risk and potential failure far outweigh the financial benefits to the organisation. Such structures should be changed to encourage trying out new ideas. What’s more, employee training typically focuses on how to do your job well, as opposed to how to push boundaries and create new ways of doing business.
The Google 5-day sprint methodology is an example of a fun way to kick start an environment that empowers colleagues to adopt this mindset and creates a safe space to fail. This isn’t some fad, it’s already being used successfully in large UK and European banks.
The 5-day sprint method suggests creating a small, visible design team that works on a 5-day process of taking a new idea and testing it through design, prototyping and customer trials. In this model, the customer is, quite-rightly, key to proceeding with an idea.
Interestingly the FCA have introduced Project Innovate to encourage innovation using new technologies that support better regulations. The project provides support to innovators to navigate the regulatory system and promote competition in the interest of consumers.
However, the wider organisation will need to make sure they’re structured in a way that will allow them to change with the market and as new technologies arise. A great way to do this is using DevOps, a way of structuring teams that merges development and operations. It allows sharing of tasks and responsibilities and produces better and faster outcomes. With the time saved, there is increased capacity to develop new ideas.
To summarise, customers will choose the service provider that understands them the best and solves their problems in the most simple and user-friendly way. And they won’t look back. Banks need to be primed to create those solutions as the need arises.
Our third prediction will focus on the new way traditional banks are viewing partnerships with fintechs.