Workplace experience: A new competitive edge for banks
- Posted on March 25, 2019
- Estimated reading time 3 minutes
For years, the retail banking landscape was stagnant, with large banks maintaining a comfortable market lead. But as ringfencing requirements, reduced digital barriers to entry, and new regulations like PSD2 come in, new financial players are quickly closing the gap and upsetting the status quo.
The result is that banks today are seeing increased challenge and competition from all angles:
- Fintech startups like Monzo and Revolut are delivering digital-first services with compelling customer experiences
- Open banking regulations will create a more modular banking landscape, where customers pick and choose services rather than getting everything from a single bank
- New players are free from the technical debt and legacy systems that burden incumbent banks—helping them bring new offerings to market quickly
To stand out in the increasingly competitive banking space, many institutions are looking to maintain profitability by streamlining operations and continue growing by improving the customer experience. But how do you achieve two diverse and challenging goals like this at the same time?
Operations and CX—both are linked by the workplace
Both operations and customer experience (CX) require robust technical platforms, an empowered, skilled workforce, and the support of a culture that reaches across lines of business.
At Avanade, we work with banks to help them deliver these common requirements for CX and operational transformation. We use a holistic approach we call Workplace Experience (WX). It combines technology, operations, culture and employee experience to create workplaces that empower employees, streamline operations, and help banks make the most of modern technologies.
By transforming the employee experience, banks stand to gain key competitive advantages that will help them thrive in the new banking landscape. In fact, research from the MIT Sloan Center for Information Systems Research (CISR) shows that companies with the best employee experiences see dramatic business benefits. The top quartile performers in employee experience saw these gains:
- Double the customer satisfaction (industry adjusted Net Promoter Score)
- Twice the innovation in terms of percentage of revenues from new products and services
- 25% greater profitability compared to competitors
Our WX approach uses three key enablers to create workplace experiences that deliver more efficient operations, and a superior CX:
1) Modernized platforms
IT leaders in banking must walk a fine line between embracing collaborative platforms and maintaining secure, locked-down IT operations. Unfortunately, many banks struggling under regulatory pressure can’t embrace evergreen cloud platforms to create a more collaborative environment.
Those that can create more connected IT infrastructures are already finding new ways to deliver great WX and CX. From mobile solutions that can help banking advisors stay productive on the road, to using AI and analytics to offer next best action guidance, the right use of modern platforms can help banks offer a CX that sets them apart from the competition.
2) Reimagined culture and employee experience
While technology plays a large role in empowering employees, organizational culture is equally important.
Even with the shift to digital banking, the physical branch remains a key part of a bank’s service—and more institutions are beginning to give them the attention they deserve. We’ve already seen the likes of Bank of India completely rebrand and redesign banks to better cater to younger people. And the Bank of Ireland’s flagship Dublin branch has been transformed into an experience center that offers workspaces, training sessions, and banking services under one roof.
Outside of the branch, other avenues exist to help improve customer-centricity and empower employees to focus on CX. We’ve written before about how DBS Bank (the largest bank in South East Asia), set out to better understand and empathize with customers and “make banking joyful, [by making] the banking part invisible.”
Many also see talent as a key way to stand out from the crowd and achieve their long-term goals. However, an alarming amount of banking leaders aren’t ready to invest in training or reskilling employees. Changing the culture around employee training is another area that needs to change—and when it does, it will go a long way towards driving a more fulfilling WX.
3) Optimized operations
Banks hold a huge wealth of customer insight, but often this is stored in individual silos making it difficult to optimize data-driven processes. Lines of business only see part of the picture: insurance getting one view, accounts another, and credit a third viewpoint. Only by assembling a single customer view can banks truly make the most of their data to empower employees and deliver a great customer experience.
For some time now retail banks have been successfully using data, AI, and analytics on the fraud prevention and security side. This has delivered important compliance and CX benefits, but it’s just the first step. Any bank that can start using that data to offer next best action recommendations and predictive service will put themselves in a strong competitive position.
WX doesn’t work in silos
For banks, the three core pillars of WX are all closely connected. This means business groups within banks must collaborate and break down silos to make the most of WX. IT, HR and Operations leaders alike must work together to build the connected platforms, the collaborative culture, and holistic data required to deliver great WX.
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To compete with new challenger banks and fintech startups, retail banks need to deliver seamless customer experiences, and more streamlined, profitable services. But to do either of those, you need engaged, empowered people. And to get them, you need a workplace experience that attracts and retains the very best talent.