The Financial Services Sector Needs to Refine How it Serves

The Financial Services Sector Needs to Refine How it Serves

January 25, 2021

OpenText Global Industry Strategist Monica Hovsepian says the Financial Services sector must commit to an ongoing feedback loop in order to excel in employee and customer experiences. 

By Monica Hovsepian

In early 2020 – before the global impact of COVID-19 – organisations laid out what they thought would be their priorities for the year. For retail banking, last year’s Financial Brand report revealed that ‘removing friction from the customer journey’ was one of those key priorities. In truth, all businesses – regardless of size or sector – need to invest in technologies to better communicate and engage with customers. A seamless customer journey can quickly propel a business ahead of its competitors and build loyalty.

The impact of COVID-19 and the ‘new normal’ means that retail banking institutions have now had to prioritise and accelerate a shift to digital for customers and employees, with branches going dark to comply with social distancing regulations. Similarly, to meet consumers’ rapidly evolving expectations, and prevent more disruptors from gaining market share, Singapore’s banks must continue advancing toward digital transformation goals to deliver more real-time, personalised and predictive banking services. As seen in the May 2020 Financial Brand report, whilst many of the initial challenges brought about through working from home have been overcome, the vast majority of banking institutions have not yet leveraged technology to help employees improve the customer experience.

As we transition to the ‘next normal’, and branches re-awaken, it is time to focus on why Financial Services Institutions (FSIs) must consider not only the customer experience but also employee experience and engagement.

Pandemic shifts need for skills and talent

It took many employees a few weeks to truly adjust to working from home, even though today’s workforce is more digitally native than ever. As banks and FSIs settle into working from environments other than the traditional offices, leaders are now realising that there is a skills gap which presents an urgent need to reskill current staff.

The current crisis will have exacerbated frustrations for employees who are not part of IT savvy organisations, a significant risk to both the business’s success and employees’ mental health. Employees want to be part of companies that are future proof; enabled by the right digital technology to withstand disruption, whilst also allowing them to continue growing their own careers and skills. In essence, they are looking for ‘destination employers’. Yet, even before the current crisis, many FSIs were not living up to this. The result is an unprecedented skills gap.

According to the May 2020 Financial Brand report (US), 72% of those surveyed believed there was either a moderate (37%) or significant (35%) skills gap for the next 5 years. This is a struggle evident across industries – especially where tech is involved. For example, e-commerce platform Shopee faces stiff competition for data scientists, data analysts and software engineers from the booming e-commerce industry in South-east Asia. This skills gap is also widened when new talent such as fresh graduates and mid-career seekers are put off by the rapidly evolving nature of the tech industry.

Recognising that graduates need more training, Singapore is committed to a series of work-study programmes through SkillsFuture Singapore and the Ministry of Education, first introduced in 2015. These programmes are aimed at helping fresh graduates earn additional qualifications while deepening their skills through real-world experiences, while also encouraging them to take up courses with a built-in work programme.

In a world full of profitable challenger banks and innovative FinTech startups, it is no wonder that FS businesses are struggling to attract and retain the next generation of talent. In order to survive, they will need to reconsider the way that they think about the employee experience, placing just as much importance on it as they do the customer experience.

Becoming a virtual ‘destination employer’

To attract young professionals into FS, leaders need to consider their processes and invest in innovation that will dispel negative assumptions of an outdated industry.

Recently, the biggest hurdle to making FS jobs attractive has been providing flexibility, as traditionally employees were tied to their desks and offices. Yet the impact of COVID-19 has accelerated the remote working trend; the traditional ‘9 to 5+’ has gone out the window. FSIs now need to capitalise on this opportunity to improve their employee engagement and ensure they’re seen as a ‘destination employer’ –  virtually.

Millennials consistently identify flexibility as a top priority when job hunting; and a global research expressed that 65% of respondents in Singapore listed down work-life balance issues as a key reason to leave their employer.  Moreover, we are now seeing that flexibility is an important aspect of business continuity and risk management. According to a recent media report, 81% of FS executives agree that the remote work changes we have seen due to COVID-19 will create more opportunities long term.

However, if companies are to offer the benefits of flexible working to their staff, they need to ensure employees can still communicate and collaborate more effectively with their teammates to solve problems and bounce around ideas while working remotely. A recent report shows that a quarter of Singapore workers did not feel equipped with the digital tools to effectively shift their work to a remote environment, highlighting a key productivity challenge faced by many during the pandemic. As such, FSIs need to invest in solutions which enable their staff to continue working effectively and productively from remote locations, whilst remaining secure.

Another issue is the prevalence of ‘low value’ tasks, like paperwork and administrative duties. Whilst important, these duties can often be seen as boring, involving few problem-solving skills and keeping young professionals away from higher value tasks. Currently, 45% of FS organisations do not use any process automation. By investing in the latest innovations and automation tools, FSIs can reduce the amount of low-value work, allowing employees to spend time on more engaging tasks and, ultimately, improve the employee experience.

Engagements have now changed as a result of the pandemic

Recent months have caused the customer journey to move front of mind. As businesses settle into the next normal, organisations that were looking to move their workforce back to the office are now questioning whether they should and considering the associated risks.

But, how do companies deliver on a hybrid working model while ensuring employees and customers have seamless experiences?

According to a new Bain & Company study, COVID-19 has greatly impacted the expansion digital banking. Customers are no longer happy with wait times, and delays in the service they receive. This impatience is the root cause of unease around brand loyalty. In times of need, we remember who was there to support us; it is no longer enough to provide financial services. FSIs must provide financial services and a smooth, thoughtful experiences and engagements throughout the entire journey.

Recent data from a survey of 325 global banks and credit unions in North America and Europe by Jim Marous, CEO of the Digital Banking Report, reveals that the core of an improved customer experience is the need to know and understand your customers, in terms of how they think and operate. Having this information provides the necessary context for guidance and financial recommendations based on real-time needs and opportunities.

Improving customer experiences across the relationship journey does not happen in vacuum, but rather banks and credit unions should focus on those engagements with the most friction. Doing so provides an immense value to not only the financial institution, but also to the customer. This can be achieved by creating an ongoing feedback loop. This feedback loop will serve to reinforce the institution’s commitment to its customer base by investing in the customer experience journey, enabling a long-term investment in customer satisfaction to facilitate a greater competitive advantage for the institution.

Employee experience – the new driver for an enhanced customer experience

The COVID-19 crisis has pushed FSIs to adopt modern technologies, but this is only the start. Creating a modern, digital working environment, which is both collaborative and supportive, will attract millennials and talented employees. Those job hunting in the ‘new normal’ want to join organisations which have demonstrated their commitment to investing in digital solutions that enable business resilience and shifting in their operating model.

Investing in technology solutions to support remote working, reducing repetitive admin tasks, and ensuring employees have the tools to collaborate virtually are just some ways retail banks can improve the employee experience and deliver a better overall experience than ever before. Proven to be true, increased employee engagement drives optimal customer experience, which ultimately equates to a higher ROI.

(Ed. Featured image by Photographer Tima Miroshnichenko.)

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