Customer experience key to winning digital banking race

4 mins read

Attributed to Ashwini Gillen, Regional Vice President of Sales at Twilio Inc | 25 March 2022

Ashwini Gillen

Regional Vice President of Sales at Twilio Inc

Asia Pacific is undergoing a digital banking revolution. A recent study predicted that every market in the region will see at least two new digital banks emerge to challenge incumbents by 2025. In Singapore for example, four digital bank licenses were granted by the Monetary Authority of Singapore, with the new entrants expected to begin operations from early 2022. 

Compared to traditional banks, these “neobanks” are born digital. They have no physical branches and offer all their products and services online, which enables them to provide greater convenience and innovative features. Examples include electronic know-your customer (e-KYC) services through video call verification, using interactive voice response (IVR) to resolve self-service issues, as well as omnichannel Customer Service Centres that engage customers on their preferred communications platform. These features have made the public sit up and take notice. A McKinsey report revealed that more than 70% of consumers in Singapore are open to migrating to digital-first banks, signalling the potential stiff competition incumbents could face in the year ahead. 

However, the incumbents are not ones to rest on their laurels. Many have launched their own initiatives to bring their offerings into the digital age. Standard Chartered Bank (SCB) has doubled down on efforts to strengthen their digital banking services in the region; they launched their first virtual bank in Hong Kong last year and are moving fast on their joint-venture in Singapore

Whether incumbents or new entrants, all financial institutions can step up to the challenge of shaping the digital banking landscape. This requires getting closer to customers to not only anticipate but exceed their expectations, while providing a data secure and regulatory compliant environment. 

Transforming customer experience with a communication core

Today’s business landscape is dominated by the customer – it is all about what they want, when they want it. Everything from product features, design, display, simplicity of use, and even packaging for physical goods, must be designed with the user in mind. 

The pandemic has accentuated this trend. Customers are paying closer attention to organisations that can best meet their needs during a time of fear and uncertainty. In Singapore, an overwhelming 70% of consumers want personalised digital customer experiences;  a sentiment that is echoed across the APAC region.

So, how do you make sure your customers feel seen and heard? A crucial starting point is a reliable, personalised omnichannel customer engagement service. This is not just a nice-to-have—it is the very basis of customer experience differentiation. 

For example, a home loan application with all its requirements and documentation can get overwhelming, especially for first-time home owners. Providing customers with the necessary guidance, be it through a simple text message or video call with screen-share form walk-through, can reassure them and make such complex journeys less intimidating.  

Financial institutions that understand and effectively address their customers’ needs will then find themselves in pole position to capture and win over a growing audience. 

Charting a clear path to success 

One thing is clear: consumers are increasingly demonstrating a growing preference for digital interactions. But with consumers either “dissatisfied” or “very dissatisfied” with website or in-app chat customer support experience more than 25% of the time, businesses and financial institutions alike have a huge opportunity to reinvent their digital offerings and optimise the customer journey. 

To capitalise on this opportunity, it is crucial neo and traditional banks play to their strengths and chart a clear path to success with the tools they have in hand. 

Digital banks already have the advantage of incorporating modern technology like the cloud and big data as part of their core infrastructure from the onset. Unencumbered by legacy technology, they are more nimble, faster to market, and equipped to create digital-first customer experiences in line with changing demands. 

At the same time, incumbents are sitting on a treasure trove of data and resources; they already have an existing customer base, strong governance, and capabilities in risk and compliance. These invaluable assets serve as a huge leg-up over neobanks in deploying powerful digital tools like machine learning, chatbots and messaging to create tailored, meaningful experiences for customers. 

In the long run, the key differentiator for both incumbents and digital banks lies in how they tap their strengths and prioritise their digital transformation goals. Above all, they must keep their customers at the heart of what they do and incorporate customer friendly digital touchpoints for key parts of the customer journey,

Pulling ahead in a crowded race

The number of new entrants into the financial services industry will continue to grow. As competition intensifies in the coming years, both traditional banks and neobanks have a relatively equal opportunity to pull ahead. A banking experience that prioritises digitally connected consumers will emerge as the key differentiating factor between those who succeed, and those who end up falling behind. 

With both neo and traditional banks raising the bar on services and experiences, consumers are the ones who will come up on top. It won’t be long before long queues and hours on hold with your bank on the phone becomes a thing of the past.