The digital customer and the information age

By Rob Haslingden on Thursday 12 October 2017

OpinionAlternative LendingDigital Banking

Digital isn’t new. In fact, the digital revolution began between 1950 and 1970.

It is important that digital is considered beyond technology that delivers it functionally.

Equally, it is important technology isn’t generalised as innovation. Innovation is derived from formulating a response and journey from the customer needs, technology to deliver should be a secondary point.

As more and more people engage online, they become used to rapidly evolving processes and become fast adopters of ‘new’ ways of working. But, their fundamental needs haven’t changed. They still want support managing their finances and without any unnecessary inconvenience. This doesn’t change if they are new customers, or existing.

Interaction vs. transaction

Customers want fast, responsive and personalised interactions – always. In order to deliver this, digital is the engine and technology is the server. Businesses should consider the difference in both interactions, served by digital, and transactions, made by digital.

Interactions should be made in real-time and be personalised. In order to achieve this a single customer view is essential. Understanding who your customer is, their needs and wants can enable you to tailor your communications and add value to any interaction. Overlaying this with elements like understanding an individual’s future propensity for product needs or prequalifying customers can add another level of personalisation and delight customers in the process. Transactions should be equally customer orientated. Automation and optimisation of processes can make it easy to implement and enable you to manage your risk and customer outcomes.

Optimising digital process

With 70 per cent of businesses admitting they are currently ineffective at delivering an optimised digital experience across all touch points, it presents a reality that businesses aren’t aligned to their customers. The result is more customer churn (35 per cent), more customers abandoning their journey mid-way through (26 per cent) and excessive time to on-board customers. Optimising a process can add value. From predefining credit limits to identifying what the best channel of contact is at the right time. Using strategy trees can offer a structured and flexible solution that is aligned to your individual business objectives – ensuring at any point it is customer orientated too.  

Mobile rise

In 2015, mobile commerce grew by 38 per cent and 37 per cent of all website visits came from mobile devices. Social networks and comparison sites means there is an increasing number of touch points in the digital landscape too. They all have a common ground: available anytime and anywhere.

More than half of millennials report they need constant internet access on the go, and spend approximately 9.5 hours a day online. Their perception is that everything will be facilitated by mobile in the next 5 years. Mobile use can also add value to understanding more about a customer. From identifying device usage for fraud detection through to understanding more about the individual for marketing and customer engagement. This is an area, if done well, that will offer enhanced opportunities for businesses to meet the demands of their customers.

Competitive landslide

Competition is about to become even more apparent when Open Banking is introduced in 2018. More data will be available and more transparency on what the customer benefits are will be visible.

New entrants and fintech have an opportunity to capitalise on their youth and ability to adapt – fast. Focussing on building trust should be a priority – something their traditional counterparts have the benefit of. It is also important those who aren’t banks don’t dismiss this as a threat, or opportunity. It provides a foundation to deliver fast and personalised information that supports the customer and their applications and needs. It will impact multiple areas and multiple roles, but it will also disrupt the customer – sending them on a journey that will become the future.

360º view

To respond to the challenge of adapting to the ‘era of the customer’, organisations must be able to do three things: deliver a 360º view of the customer across the lifecycle, fight fraud without compromising the customer experience, and break traditional business constraints to serve today’s non-traditional customer. How they do this will be based on a multi-factor strategy that blends innovation, with technology and with the needs of the customer. APIs are one area where businesses are benefiting from technology led innovation. Data can add value to any risk identification and functions and like ‘pinning’ can enable organisations to pin data to an individual, giving a true single customer view that is validated from internal and external data.

Prioritising change

8 out of 10 businesses consider improved customer insight to be their top business priority over the next year. With growth, cost efficiency and data security also taking the hot seat. It isn’t a secret that trying to merge offline and online processes causes friction in the customer journey, increases costs and leads to missed opportunities. And with two thirds of organisations recognising that a top business priority is to better integrate physical and digital channels, it is a challenge most are looking to solve – getting this right will create a solid foundation for the future. 

With any change businesses need to consider flexibility. Agile, flexible systems will enable quick and efficient delivery that supports change instead of stalling it from the point of idea.

Omni-channel customer

As businesses embark on the task of transforming customer journeys via digital delivery, the danger is that it is done at the expense of other channels. Businesses should adopt a holistic, ‘omni channel’ approach. Customers are becoming more comfortable interacting with companies across a growing number of channels; as a result, they are demanding a seamless and consistent approach across each and every channel. Companies with omni-channel customer engagement strategies retain an average 89 per cent of their customers, compared to 33 per cent for companies with weak omni-channel customer engagement. In addition, customers are expected to have 30 per cent higher lifetime value.

Businesses can take advantage of systems that consider omni-channel and maximise the insight derived from interactions to enable a personalised and cross-channel approach. Equally, as customers move across channels – it can be harder to detect fraud. Businesses need to consider the risks associated to this and ensure adequate processes are in place to reduce business risk – and risk on genuine customers.

Leveraging corporate assets

It’s not uncommon for the root cause of poor customer experience to stem from inside the organisation. Often caused by cross-functional disconnects. Shifting an entire organisational mind-set to enable change can be transformational. Delivering this type and level of change successfully engages the organisation at all levels, generating excitement, innovation and a continuous focus on improving the business to best serve the customer. It creates a culture and provides a valuable competitive advantage. In order to do this, businesses should also consider the experience and expertise of partners – not just on delivery but on design and implementation.

Working together

Many organisations are already looking at their partnerships and identifying business gaps. As a result partnerships are being formed which are often critical in order to deliver a complete solution, end to end. It also sees the end of legacy systems and dated delivery systems but encourages parties to combine their expertise offering a fast and comprehensive solution.  

Experian have been serving multiple industries and multiple businesses for decades. From data to software, consultancy and analytics – right across the lifecycle of a customer. We understand the challenges organisations face and whilst we don’t have the answer to them all, we are committed to working with organisations in order to solve any problems and delight customers. 

Rob Haslingden will deliver a keynote on Open Banking at the AltFi Global Summit 2017 in Amsterdam, November 7thClick here for the agenda in full.

Sign up for our newsletters

Your daily 7am download of all things alternative finance and fintech.

Fintech and alternative finance headlines with an exclusive Editor's Note each week. Delivered Monday at midday.

AltFi's new weekly US newsletter breaking down the ins and outs of America's burgeoning fintech sector. Delivered Monday 9am EST/ 6am PST.