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Smart Communications and AB+F brought together leaders in New Zealand’s banking and financial services to discuss the challenges and opportunities in driving effective consumer engagement. Christine St Anne reported on the day.
Financial services are challenged on a number of fronts. Increasing regulation and the rapid evolution of technology are all key themes confronting New Zealand’s banking sector.
At the same time consumer expectations are also evolving as new entrants come into the market with innovative offerings.
Amid these challenges’ banks continue to embrace digital banking options to enhance customer engagement. According to RFi Group’s Wilson, New Zealand has the highest rate of take up of digital banking globally with younger consumers more likely to favour mobile banking with the main financial institution while internet banking appealed higher to older consumers.
To kick off the conversation, the roundtable participants spoke about examples of businesses that are leading on this engagement such as Buy Now Pay Later service AfterPay and UK neobank Monzo.
Here these businesses distinguished themselves by providing superior service – one roundtable participant described it as “beautiful experience”. Most recently Apple’s new credit card offering again delivers on service, providing consumers with more support in managing their money such as spend tracking initiatives.
These businesses including tech giants like Google and Amazon are creating personalized experiences that are useful for customers. The roundtable participants acknowledged that the sector needs to “up its game” in terms of how to deliver on this type of communication.
"In my experience in the Australian and New Zealand markets, customer communication is emerging as a core competency and that should become almost like a shared service within the organisation," Peter McGauran, Smart Communications
Against this backdrop Smart Communications’ McGauran highlighted the importance of effectively engaging customers and determining who is primarily responsible for overseeing this communication particularly given that engagement is now done through a number of channels including mobile banking. “It’s not necessarily about owning the relationship but who owns that piece of communication that an organisation is sending out?,” McGauran
Here he highlighted examples around insurance policy renewals, or transaction statements. “In my experience in the Australian and New Zealand markets, customer communications are emerging as a core competency and that should become almost like a shared service within the organisation,” he said.
Data of course will underpin better customer engagement by allowing banks to better understand their consumers. McGauran highlighted the need to balance this communication with consumer consent adding that the shift is already occurring in Europe with the General Data Protection Regulation legislation.
“I think that is definitely shifting the dynamic as to how organisations communicate with their customers,” he said. It was an interesting point as some of the discussions highlighted that unlike businesses like Amazon, the banking sector is constrained in the way it can use data particularly around the issue of advice. “Banks need to tread carefully in this area, that is providing advice within a compliance framework while also harnessing the benefits of using consumer data.”
Hatch Investments’ Sewell concurred but added that some businesses are still able to use small components of data to deliver on service outside of regulation. ANZ’s Bullen highlighted the importance of providing prudent and helpful advice. “We have a responsibility to tell customers when they’re not using the right products, or they are not using them correctly. We need our risk and legal teams’ guidance when we’re creating these beautiful experiences in our digital channels,” Bullen said.
Smart Communications’ Fotiou also spoke about the perennial issue of customer loyalty and ensuring that customers are receiving the correct communications to ensure that loyalty. For Tower’s Hirschauge it’s not just about customer communications but also making the channel meaningful. “If you don’t have a meaningful channel for your consumer, all your attempts to communicate with them will not be effective.
“They simply won’t read any of the communications they receive. I don’t know the statistics about the use of emails but if that channel is becoming unusable because consumers will not respond to that, what do you do? You need something that makes it meaningful, that draws them back to be open to those meaningful conversations. We know insurance is sometimes a grudge purchase. Gaining a high degree of engagement during the purchase can be hard,” Hirschauge said.
Challenges around managing people and legacy systems were discussed. “It’s very hard for people to do things differently if the systems are holding them back and it can be challenging when you are trying to articulate how to think differently when building a new business case”, Hirschauge said.
Engaging with the cloud
The role of cloud technology is positioned to deliver on customer experience by effectively harnessing that data and roundtable attendees provided their perspectives on how they are adopting the technology. In Australia, the prudential regulator APRA has already confirmed that it is comfortable with banks now taking advantage of cloud technology.
“There’s been a significant change in the attitude toward cloud,” according to HSBC’s Geoghegan. “There was an intrinsic issue that people weren’t comfortable with the security elements. It was the single biggest obstacle for a number of years. It has progressed significantly now with the key upside being there are definite cost advantages to it but also, most of us are working in financial institutions and while we have fantastic digital teams as part of our businesses, the skill and expertise that sits with these cloud providers is amazing and the only way to really leverage that is to be involved and engaged with them, and if we don’t take advantage of that now, you’re going to be left behind,” Geoghegan warned.
"We’ve now got our data in the cloud and it’s opened up the toolkit that’s available, such as marketing automation platform and visual dashboards. It’s meeting two needs," Dina hay, flexigroup
For flexigroup’s Hay, the business has come a long way in its journey to the cloud. “We’ve now got our data in the cloud and it’s opened up the toolkit that’s available, such as marketing automation platform and visual dashboards. It’s meeting two needs,” Hay said. Smart Communication’s Fotiou asked the roundtable attendees on whether they adopted a strategy to drive cloud technologies within their business.
Organisations did recognise the need for such a strategy particularly as a way to ensure data security was maintained as cloud technologies were adopted articularly as ASIC has already put banks on notice regarding risk and the cloud. “The priority is to keep customer data safe, regardless of where it sits. It is about managing the risk. From an ANZ perspective, the cloud is something that we’re looking to pursue but the number one priority is keeping customer data secure,” Bullen said.
The challenges around conducting due diligence with different cloud providers was also discussed with some participants conducting a check on an annual basis.
While it was time consuming, it was important that this was done to ensure security protocols for the businesses were adhered to.
“Consumer education was equally important for banks as they increasingly adopt the cloud. Our mobile app goMoney is completely secure but we have users that don’t like using mobile apps because they think their data is insecure. When they hear that banks are using cloud – what does that do to the trust level around that?”, Bullen said. “We have to educate customers, that actually the cloud is an extension of what we do already and we’re doing it in a way that’s trusted and as secure,” he said.
For flexigroup’s Hay, in addition to being able to create that single customer view and around the ‘Know your customer’ strategy is that the organisation must be willing to take the actions that come off the back of that ‘Knowing your customer’ strategy. “You can do great analysis and present recommendations for business action but is the organisation ready to execute; to take that leap of faith?” Hay said.
Legacy issues and evolving customer communications
Legacy is also another perennial issue for the banks and Fotiou acknowledged that tackling legacy is a cultural shift. “It is about adoption to be able to bring positive benefits back to the business,” Fotiou said.
ASB’s Pichler is moving ahead with his systems but notes there are challenges. “We’re all going faster and we all believe in the promised land of microservices and APIs and configurability, but there’s a lot of work still to be done to get there,” Pichler said. Similarly, ANZ’s Bullen noted that the bank works with legacy core systems.
“Fundamentally, the thing that binds it all together is the customer and that’s how we think, it’s about the customer and everyone is working towards that. Legacy systems are a problem, but the other challenge is how do you work around that to deliver the outcomes you’re after and that’s actually quite an art to be able to do that,” Bullen said.
flexigroup’s Bull added that at times hard decisions will need to be made. “Somewhere along the line you look at the legacy system and you have to make a call. Enough is enough and take the courage. It might be a short-term profit hit but the agility that it can give you could be quite profound,” he said.
For Hirschauge, the challenge is in completing the transition. “If we think back at that notion of team and collaboration both IT and the business need to work through what the real options are; it has to be a combination because there’s always going to be tradeoffs. It is unlikely that migrating all the existing processes and products into a new platform can always be achieved economically. It is about what tradeoffs you’re willing to make as a business and how you are determined about your journey because if you’re not, it is going to be challenging,” Hirschauge said.
Customer communications over the last 10 years continues to evolve and underpinning that is social media. Hatch Investments’ Sewell noted that social media has become tribal compared to the single postings of when it first began. Focusing on social communications and groups and building a tribe is a really important way to help get your word out to people that care about it passionately and want to contribute to whatever you’re doing,” Sewell said.
ASB’s Pichler said communications has become more targeted. “I think back to probably 2009 in the UK, it would have been my ninth year of receiving an offer for a car loan with the monthly bank statement from my bank, so there have been some improvements,” he said. For flexigroup’s Bull, the advent of ‘fake’ news’ and crossborder communications are impacting the way organisations communicate with their customers. “As the world moves into more digital and data-driven marketing, there’s that element that’s coming through that you’re able to pulse messages and influence decision-making without perhaps the controls that were there before,” Bull said.
The roundtable attendees also assessed the role of IT in driving customer engagement.
"The real opportunity at the moment is to think about how customer communications is integrated into customer journeys... integrated and two-way are fundamentally important to meeting what customers expect these days," Anton Pichler, ASB
For ANZ’s Bullen, the approach needs to be collaborative to be effective in driving that change. “Our digital channel communication is delivered by the business team/risk/marketing teams working together, using a relatively seamless automated pipeline,” Bullen said.
“Outside of the digital channel communications, we have the challenge of legacy content. - For example, sending out letters are part of the core experience, so how do we seamlessly incorporate that? That’s something we’re working through,” he said. For ASB’s Pichler, it all depends on the kind of communication but echoed Bullen’s view. “The real opportunity at the moment is to think about how customer communications is integrated into customer journeys and the experience; how that works as multi-channel, integrated and two-way are fundamentally important to meeting what customers expect these days,” Pichler said.
McGauran sees a big difference between organisations grappling with legacy systems and those that operate on a separate platform such as the Smart Communications or any other CCM solution. “The ability to make that change and I guess at their level of agility it’s much greater because they’re not having to go and touch these core systems that nobody wants to touch because it’s all COBOL and mainframe. We haven’t got the skills for it or these IT resources, once it’s separated out into a separate platform that does enable you to have a lot more of that change,” McGauran said.
Going forward, for the roundtable participants the future of customer communications will be underpinned by innovation and technologies like artificial intelligence. For Fotiou, her business has already set a roadmap on innovation. “We are solely dedicated to the CCM space. That is all we do. We are actively working with banks and insurance companies to embrace innovation such as AI and smart bots,” Fotiou said.
Ensuring that businesses aim to continually do better on engagement and on empowering customers to act rather than relying on just standard messaging. “We could do better. A lot of it is about actually getting people to engage with difficult things that they don’t really want to think about and take positive action around it, and that for me is much more complex than just initiating a response to a message,” Pichler said. “Being relevant is really hard because not only is that different to different people, the tone of voice, and the channel is very complex to deal with,” he added.
Smart Communications’ McGauran continued on that theme. “A lot of the things that I’ve seen in my experience is that management communications are typically a call to action. You send somebody a letter because you want them to either fill out a form or you’re missing some data and you want them to complete the process. I think one of the challenges that we see, a lot of it is closing that loop,” McGauran said. “Moving to a digital channel enables that because you can push them towards an email where they can click and follow a link, you can track that, you can get the analytics. It really is about getting that call to action,” he said.