Top tech trend for 2017: humans
Exceptional customer experience, coupled with enhanced staff proficiency, seen as keys to success
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- Written by John Ginovsky
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- Comments: DISQUS_COMMENTS
![Bank tech trends can make your head spin. So regularly longtime Tech Exchange Editor John Ginovsky does his best to “make sense of it all.”](/media/k2/items/cache/5b9f12ae90c2a6f12d196d7976924a5d_M.jpg?t=20161230_134415)
Around this time of year it’s become a tradition to muse about the technological trends likely to dominate the banking industry in the coming year.
What’s surprising—and perhaps a bit heartwarming—seems to be that the dominant trend in 2017 is: human.
Human as in “customers.” Human as in “consumers.” Human as in “banking staff.” Human as in employing technology specifically to make connections, transactions, interactions, and security between people quick, convenient, safe, and profitable.
This conclusion comes from a wide array of independently issued reports, releases, and observations, admittedly gathered somewhat randomly. That randomness, as well as the undeniable commonality of conclusion, lends credibility to the statements issued above.
Human meets digital
“Digital innovation and customer experience is the only way forward for retail banks—it is a matter of do or die,” says Jimit Arora, partner at Everest Group, in a typical observation. “They need to innovate consistently and add functionalities across the customer touchpoints to offer best-in-class user experience as well as defend their business against neobanks.
“At the same time, retail banks are facing increased pressure to invest across ʻrun-the-business’ initiatives—updating outdated, legacy systems; implementing stronger cybersecurity; observing stringent compliance and reporting requirements; and operating an extensive branch network, just to name a few. This is why retail banks are aggressively investing in digital technology. They must leverage technology quickly and wisely, or they will be left behind.”
In like vein, there is this from D3 Banking:
“The major online and mobile banking replacement cycle that began in 2016 will gain significant momentum in 2017 as more financial institutions seek to stabilize and grow customer bases through an advanced, comprehensive digital banking strategy.”
One intriguing insight from D3: “Anticipation, not personalization. Simply personalizing customer offers will not be good enough; instead financial institutions will implement technology to correctly anticipate consumers’ needs. By identifying what consumers need before they realize those needs themselves, banks and credit unions will add value to the overall customer relationship.”
Accenture Strategy, looking at the broader business environment, surveyed 351 large companies in the United States and eight other developed countries. Again, the primary importance of customer experience emerged.
“It is no longer enough to build the next generation car, music player, crane, or plane to satisfy customers. Companies need to provide a superior experience to their rivals, from the point a customer shows interest in a product, through the research and purchase, to long after they own the item, with a series of services to keep the customer delighted,” says Richard Holman, managing director, Accenture Strategy. “Companies across all sectors are rewriting the playbook for how they innovate and organize to drive growth, with leaders achieving between 3.5% and 7% higher revenues that are attributable to distinct approaches to innovation, product development, and solution development.”
Rethinking the branch
Those are all about the customer point of view. How about from the provider’s point of view? For example, what is the view from that most ancient of banking channels, the brick-and-mortar branch?
“While digital channels are taking over after the onboarding process, the future of the branch channel lies in new customer acquisition, the sale of more complex products, and more pointed guidance for customers wanting face-to-face interactions,” says David Albertazzi, Aite Group senior analyst.
To this point, Celent analysts Bob Meara and Jean-Marie Ubigau say in a recent report: “Human capital [meaning branch staff] is a matter of utmost importance; 97% of surveyed institutions regard having a comprehensive staffing strategy as part of their institution’s branch channel transformation as [somewhat or very] important.”
“Human capital considerations may be both the most challenging and important aspect of branch channel transformation,” Meara says. “No matter how slick the branch technology environment, it is the desire for staff interaction that continues to drive branch channel utilization.”
Adds Ubigau: “Making these interactions valuable to both customers and the institution will be of the utmost importance for the foreseeable future.”
Fintech meets banking
Okay, all this is easy to say. What, specifically, can be done to achieve such intense focus on customer experience and with what kind of technology? That seems to be where the fintech phenomenon kicks in.
Take the branch staffing issue. In December, a company called Vidyo announced that it will provide Royal Bank of Canada with very sophisticated, high definition, and highly reliable video chat capabilities.
As the company says: “Video chat will help RBC re-create the in-person, local bank branch experience from wherever customers are—the coffee shop, on the road, or from their homes.”
Says Cathy Honor, senior vice president, Contact Centers at RBC: “We understand that our customers want to build and maintain a personal, face-to-face long-term relationship with their banker based on trust, especially as they approach important financial decisions that can affect their business both in the short term and in the future.”
RBC is Canada’s largest bank, with more than 16 million clients throughout that country, the U.S., and 36 other countries.
[In the U.S., First Internet Bank employs a similar feature for its customers, who are located in all 50 states. Read “First Internet Bank’s life in the web lane”]
What will APIs build for banks next?
Back to the purely technological trends facing banks in general, one acronym needs to be firmly memorized: API, or application program interface, defined by Webopedia as “a set of routines, protocols, and tools for building software applications.”
Capgemini has this to say about that:
“Open API adoption will accelerate the movement towards ʻbanks as a platform’. Banks will begin to open their APIs to allow fintech firms and other developers to build a wide variety of innovative, consumer-friendly products which will be available as apps which are hosted on a bank’s online platform. This will essentially provide a one-stop shop for customers by offering them a wide variety of products and services within third-party apps as well as their bank’s core offerings.”
Hard on the heels of the API trend will be the increased adoption of artificial intelligence and augmented reality, Capgemini says. Augmented reality will allow for location-based offers, creating virtual ATM locators, and allow on-demand access to speak with a relationship manager. AI will see increased experimentation to find ways to apply to customer service activities, even to the point, Capgemini says, “of placing humanoid robots in physical branches that can greet and converse with customers.”
People meet androids?
Okay, that last bit might still be a bit creepy at this stage, but who knows?
The connection between increased human contact and security could not get any closer than the growing adoption of biometrics, particularly the employment of fingerprint authentication available on most smartphones now. Two comments on this:
“Authentication was a big trend in 2016, and biometrics authentication, in particular, isn’t going away. Biometrics will no longer be seen as novel in 2017, but necessary,” says Daniel Ingevaldson, chief technology officer, Easy Solutions.
And Capgemini again: “Biometrics in particular are likely to be increasingly offered in various ways as they tend to provide better security than conventional systems given their uniqueness to an individual.”
Ticking off the trends
So, doubling back to the beginning, Everest Group provides this list of tech trends for 2017:
• Introducing multiple value-added services across digital banking channels.
• Offering advanced security and authentication functionalities.
• Providing secure, convenient, and fast payment solutions to customers.
• Leveraging social media for efficient customer service and marketing.
• Redesigning and creating smaller branches equipped with self-service technologies.
And what is common to all five of these?
The human element.
Sources for this article include:
[Note: Some citations came direct from the source and are not generally searchable.]
2017 Emerging Anti-Fraud Technology Predictions
Human Capital Considerations For The New Branch
Kickstart My Year: 7 Trends In Insights & Data For 2017
The Evolution Of Branch Technology To Meet Retail Banking Challenges
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