The Human Element Must Not Be Lost in the Digital Banking Era

Banks around the world have always spoken about technological innovation, but as the pandemic hit, digitization of financial services shifted from being an initiative to an absolute necessity. Many financial institutions (FIs) began adding even more new capabilities to allow their digital platforms to reach customers in entirely remote environments and ensure that customers could receive the same level of service as when they were able to visit a bank branch. As for digitization plans, the banking industry in 2021 is months or even years ahead of where experts had envisioned.

This is undoubtedly a good thing for banks and their customers. It has enabled financial institutions to better support and communicate with customers by offering an array of new digital services and capabilities. Looking beyond this and to the future, financial institutions will all face the challenge of competing in an “anywhere economy”. Consumers are far more accustomed to carrying out almost all their banking activity remotely – so, standing out with a greater user experience has never been more important.

To achieve this, organizations must be able to offer the same high level of service digitally to a customer as they would receive in-person. FIs can no longer avoid a digital-first approach, so how can we build a digital banking world with people at its core?

Incorporating the Human into Digital Identity

When it comes to digital banking, security has always been of paramount importance for banks. However, today’s consumers expect little to no impact on their user experience - so banks must strive to reduce friction in key processes and keep security checks as invisible as possible during the user journey.

However, as usage of digital platforms skyrocketed, so did the threat of digital fraud - such as social engineering attacks on social media and via SMS (text messages). To combat growing security threats and help minimize the risk of customers falling victim to fraud, banks need to turn to key technologies like secure 'PUSH notifications', or 'One Time Passwords' with fingerprint, face recognition or other biometric checks that allow organizations to fulfill Know Your Customer (KYC) requirements. Without these technologies, verifying a customer’s identity remotely would heavily impact on the user experience or their platforms’ security, and neither should ever be compromised. These interactions are key opportunities to strengthen the user’s brand engagement, so while it’s critical to offer secure platforms, a seamless experience is just as important.

For example, account opening processes are critical to winning customers over a competitor. Too much friction can be detrimental to an organization’s potential to acquire more customers, which according to Cornerstone can be as high as 90%. For banks and FIs to attract new customers, a digital-first approach that streamlines identity verification with machine learning and biometrics with little to no impact on the customer is key. Ultimately, this is a risk management decision that every organization must tackle. It’s vital to strike the right balance between maintaining high security standards and preserving the user experience. The best performing financial institutions will opt for digital identity verification solutions that allow customers to effortlessly satisfy KYC requirements.

Preserving the Human Element in Virtual Signing

Traditionally, organizations have relied on face-to-face interactions to verify a customer’s identity and finalize complex financial agreements. E-signature technology is becoming a ‘must-have’ requirement for the industry. Without it, carrying out day-to-day financial services – like applying for a loan or opening a new bank account - would have been far more difficult during the pandemic.

Banks, FIs, and insurers are continuing to evaluate how best to introduce human support across their digital channels. Traditional e-signature technology alone isn’t adequate to meet the demands of remote banking today. Adding human assistance into these types of digital banking activities demands a range of capabilities to deliver an interactive experience that increases emotional engagement and in turn builds brand loyalty and drives customer retention.

According to Capgemini, customers are becoming more inclined to change banking providers if they have easy access to services. Banks that can offer customer support with video services will be able to create positive and memorable customer experiences. Consumers have an abundance of FIs to choose from. So, to help differentiate themselves, it`s crucial to make the most out of these key interactions and make life easier for the consumer wherever possible.

Technologies like e-signatures and videoconferencing will help drive better brand engagement and expedite the completion of complex financial agreements. These are usually very high-value activities that demand a lot of time, understanding and consideration to conclude. However, being able to communicate with customers in real-time means that employees can clarify any terms and conditions and lower the chance of missing or incorrect information.

It would not be an understatement to say that we’re in the age of digital banking. The pandemic has acted as a catalyst for consumers’ adoption of digital platforms. That said, for this momentum to continue, digital platforms in the future will need to adopt a hybrid model where human assistance is incorporated from account opening to agreement signing. Digital services are innately non-human, but it’s important that FIs consider how the human-element can improve the user’s experience at every stage of the customer lifecycle.