The arrival of the first pillar of the Payments Services Directive, Part 2 (PSD2) in January this year laid the groundwork for a more open banking system. It is set to transform the financial services industry in the European Union (EU) by putting the customers in control of both their accounts and the personal data that banks hold to complete transactions.
Under the new directive, banks must share access to their customers’ account data with third parties who have a legitimate payment purpose, meaning their monopoly over payment services is at risk, as established internet giants and innovative fintech startups vie to offer a superior online experience and beat the services traditionally offered by banks. As PSD2’s introduction sparks increased competition in both business and retail financial services throughout Europe, it raises a broader question: are banks well equipped to create compelling digital experiences for their customers and ward off the competition from these new challengers?
A challenging context
PSD2 comes at a time when banks are already under pressure to create a more modern service for their customers. New technologies such as crypto currencies, e-wallets and mobile payments are flourishing due to consumer demands for greater convenience and connectivity, and banks must keep pace.
To stay relevant in the lives of consumers and remain competitive under PSD2, banks must improve the digital experiences they offer. By doing so, they’ll be able to leverage their trusted status with customers and avoid the ultimate pitfall of becoming mere utilities, destined only to support other companies’ customers facing payment solutions and sacrificing the most tangible aspect of the retail banking relationship.
A digital paradigm shift
Maintaining customer relationships will mean finding better ways to deliver the seamless, personalised experiences consumers demand, and will necessitate a change of mindset. Banks will need to pay less attention to analysing specific customer interactions, such as individual marketing campaigns or email open rates, and instead think in terms of injecting convenience, value and utility into their customers’ experience. They will need to embrace a bigger world, understanding the broader relationship customers have with non-financial brands through touchpoints as varied as social media, touch and voice interfaces, industry influencers and smart bots. This sequence of touchpoints is vastly different for each individual customer and, with use of connected devices growing, may be spread over a greater variety of channels and platforms.
A technological solution
To collect and tame the data from this increasingly complex customer experience journey, banks must create a more holistic view of the customer. They must gather ambient, behavioral, form-based, or third-party data and combine this with data from existing tools, such as Customer Relationship Management (CRM), Enterprise Resource Planning (ERP) and Marketing Automation Platform (MAP) information, to create the most detailed picture possible, understanding the types of products customers are interested in from analytics data, when they are likely to do their banking and what their preferred communications channel is – all within the confines of the new General Data Protection Regulation (GDPR) statute, of course.
Once banks have a complete picture of their customer, they can target them with personalised, engaging content. Digital eXperience Management (DXM) platforms help address this challenge, as they allow marketers to roll out tailored content across a variety of channels, such as social media, webpages, online banking portals and mobile apps. Each of these can be quickly personalised to the customer and adapted to the device on which it is being viewed. Many of these platforms have a ‘What You See Is What You Get’, or ‘WYSIWYG’ style interface, meaning they can be used without deep technical skill. These powerful yet simple tools empower banks to deliver consistent yet tailored experiences.
Although it is simple to execute, the personalisation process will not be linear. Rather, perfecting online experiences requires marketers to employ a trial and error approach using Web Content Optimisers. When marketers use these platforms, A/B testing can be carried out to test different variants of a single digital touchpoint to gauge how audiences react to small tweaks. Although considered technologically tame by today’s standards, A/B testing seems set to see a resurgence in popularity against more modern artificial intelligence-driven approaches as a result of the GDPR prohibitions against automated profiling in the absence of the high standards of explicit consent. By experimenting with different banners, layouts, calls to action, styling and other content, marketers can discover which performs best and deploy this over the hundreds of digital touchpoints audiences may encounter. For example, banners may be appropriate on the main pages of a bank’s website, but lead to high bounce rates when featured on customer portals.
Once all content across different channels has been personalised, it’s important to keep control of it by using quality management systems. These systems examine all forms of digital content to identify issues such as broken links, misspellings, accessibility issues and compliance risks, and allow them to be fixed. Smoothing the customer journey in this way enhances customer trust, as individuals perceive the bank as more understanding of their needs, more reliable for key banking operations, and more consistent in its communications.
Understanding customers and delivering relevant, timely, compliant interactions across different touchpoints won’t just improve customer experience. The integration of data siloes, such as CRM and form data, will also help banks comply with GDPR, helping them to determine which customers have already shared their data, streamlining the consent process and ensuring communications align with individual expressed preferences.
It’s time to put user experience first
PSD2 is here, and it’s up to banks to see beyond the letter of the law and understand the importance of digital experiences in remaining competitive and maintaining their customer-facing status. Digital experience platforms can take banks into the 21st Century, improving understanding of the customer, creating consistent, yet personalised, communications and assisting compliance with regulations such as the GDPR. Only by making user experience their utmost priority can banks stay competitive with the invaders that threaten their traditional place in consumer lives.