How to win and Keep customers in the digital world?

By: Tanya Andreasyan
September 2016



Tanya Andreasyan is the editor of Banking Technology, one of the leading FinTech publications in the industry. Tanya joined Banking Technology in February 2016, following a lengthy and successful career in IBS Intelligence, an international publishing and consultancy firm also focused on FinTech.

Tanya specialises in the FinTech market across a broad range of areas: from back office software and solutions to front-end ones, such as digital and omnichannel, plus the emerging technologies and concepts, such as big data and blockchain.


New technologies and regulations have made changing a bank easier and have spurred more competition in the sector.
If a bank does not provide its customers with easy-to-use and coherent solutions, there is nothing that really stands in the way of a customer in decreasing the business with its bank or moving to a competitor altogether.

So what constitutes a winning proposition to decrease customer attrition and ensure loyalty from a discerning, tech-savvy customer of today? Here are some key points:

So, you offer online banking. Is that a selling point these days? No. Is it expected as standard? Yes. Furthermore, just offering an option to view historic transactions online is definitely not enough. A customer wants to be able to carry out transactions, to see the incoming and outgoings in real-time, and there is no question that all of the above must be user-friendly. The likes of Amazon and Google have set the expectation bar high.

Needless to say, a customer anticipates being able to bank across all remote devices – and expects a consistent experience! He/she can start an operation on a desktop, continue with it on a tablet or smartphone, and then maybe pop into the bank’s branch to complete it – all in a seamless manner, without having to duplicate operations and just be able to pick up where he/she earlier left off.

Corporate customers are also expecting digital capabilities (and why shouldn’t they?). The security, regulatory aspects and the overall set-up are more complex, understandably, but this shouldn’t put banks off – the investment is worth it.

Take the example of Habib Bank in Pakistan. It has recently introduced a new digital offering for its corporate clients, bringing trade services, cash management and supply chain finance onto a single, digital platform. The bank’s CIO, Fareed Hosain, describes it is a “powerful sales tool to attract more business and deepen existing client relationships”.

There is also Barclays with its recently launched ¡Portal – an online hub to provide businesses access to all Its banking services through a single gateway. Speaking at the launch, Michael Mueller, head of cash management at Barclays, summed up well the pain of corporate when it comes to online banking: “Corporate banking solutions that bridge existing products produce disparate, complex and outdated systems that require multiple logins on a variety of platforms, making banking a time-consuming and disjointed process.”

Another multinational, ING, is also rolling out a new portal – known as InsideBusiness – that is aimed to become ultimately a single point of entry for every product and service ING offers to its corporate clients. The portal has five major functions: payments, cash management, FX, lending and a service centre for things like confirmations and agreements.

For any bank – be it retail or corporate -such capabilities require operational and technological agility. Many banks have built up siloed architecture over the years, with different systems responsible for online and mobile operations, not to mention the branch/teller systems that are usually as old as the core systems. Getting all these systems to successfully interact with each other and with other relevant systems at the bank (e.g. back office processing systems, CRM, KYC software) is a challenge.

The FinTech market can address this nowadays, of course, and there is no shortage of omnichannel offerings that are built on a common underlying platform, so if you are thinking of a “rip and replace” route, you’ll have a long queue of the vendors keen to demo their product.

A good example of an established bank reinventing itself for the digital era is Poland-based mBank. The entity is an amalgamation of three banks: BRE Bank (the country’s third largest by assets) and its two subsidiaries, MultiBankand mBank.

BRE Bank was the oldest of the three (set up 30 years ago) and primarily focused on the corporate banking sector. Its digital banking subsidiary – mBank – was launched in the early 2000s, also focused on corporate. MultiBank was aimed at the mass affluent and SME sectors; it was also launched at the start of the millennium, but as a more traditional banking model – i.e. with physical branches.

In 2012, the group felt it needed to modernize its online/mobile model and capitalize on the rise of social media.

The enterprise-wide project to unify the three entities under one brand – with consolidated technology, customer bases, channels, products and branches – has been in the making for around four years and is set for completion in 2016.

The new set-up incorporates the best of both worlds – physical and digital. The bank encourages and incentivises customers to use online as much as possible, but retains a downsized branch network for a face-to-face customer interaction and personalised advice. The model is adjusted for all lines of business of mBank: retail, mass affluent, SME and corporate.


“Our competitors are just starting to reduce their branch networks and reformat them to keep up with the times, but we are already positioned not only for today but also for the future,” Michaf Panowicz, MD of marketing and business development at mBank at the time, commented back in 2014 (he is now spearheading the digital banking strategy at Nordea).

Indeed, the wave of announcements about branch modernisation hit in 2015 – with the likes of Société Générale, Nationwide Building Society, HSBC and Deutsche Bank (just to name a few) grabbing the news headlines.

UK-based Natiownide has pledged £500 million and five years into the development of its branch and ATM technology.

Société Générale is looking to close a fifth of its retail branches (around 400) by 2020, whilst HSBC unveiled plans to axe 25,000 jobs in preparation for its new digital focus.

But most banks cannot just get rid of branches altogether – and yet they cannot continue with the existing branch set-up (costly, inefficient and burdened with legacy systems). The answer? There is no one silver bullet, but a series of initiatives -including turning tellers into sellers, modernising the often ancient branch systems, introducing more self-service and “virtual teller” technology, and downsizing the real estate – applied in a well-structured and well-thought through manner can surely bring the desired results.

The branch staff should be equipped with the right tools to become “sellers” or “universal bankers” (i.e. being able to help all types of customers with any queries). For instance, a portal to access product details and match them with the customer details. And analytics tools that will help predict the next best offer for the customer by analyzing the customer’s transaction history.

There are also cultural and regulatory aspects to consider. In the US, for instance, banks are mandated to have physical presence in underserved locations. And the US public likes a “brick and mortar” branch. Speaking at a recent banking tech conference, Gareth Gaston, EVP of omnichannel at US Bank, was adamant that the branch is here to stay. He said that some banks in Europe that have forced customers to use digital channels have missed out on the selling and revenue opportunities that branches offer. They are now regretting chasing these “fool’s gold” savings, he claimed.

Forget the desktop

It is worth noting an interesting fusion of new and old here – take Tandem Bank, for instance. The startup is all about mobile, but plans are in place to have a “brick and mortar” call centre to deal with customer queries and transactions. Tandem’s co-founder, Ricky Knox, explains that whilst mobile will be Tandem’s primary banking channel, the call centre will serve as a hub for larger and more complex transactions.

Call centres

And thus we come to the good old call centre. A source of endless frustration for customers and a source of considerable expense to banks.

If something goes wrong or there is a question, a call centre is the port of call (excuse the pun). It also continues to be a major sales channel. “We cannot fully replace people with technology, as interaction with an actual person is very important to customers. They like to know there is a live person who can help,” commented Peg Marty, head of contact centre at Citizens Bank in the US, speaking at the BAI Retail Delivery conference. “It is vital to get the customer experience right: it should be effortless, simple and relevant.”

This translates into the integrated technology, which allows the call centre employees to deal with customer queries without making the customer repeat/explain the issue over and over again. It also means hiring the right people – focusing more on behaviour rather than metrics.

Now that sharing a negative experience on social media is so easy, and with the possibility of it going viral, can any bank


And finally… social media

Many banks still have a vague understanding of social media and how to utilise this channel (if at all).

Some banking newcomers have fully embraced it: Fidor Bank in Germany and Alior Bank in Poland, for example, have a number of their products and services tied to Facebook.

 Others use it as a major communication channel. EQ Bank (a digital startup in Canada) and Santander in the UK have dedicated social media teams on Twitter that greet customers each morning, bid them good night in the evenings and are on standby to respond to customer comments and queries throughout the working day.
Barclays has targeted its less digitally-sawy customer base with a series of YouTube videos for the older clients, featuring an over-50’s “Walking Football” league learning to promote their group online, and senior citizens Kent and Val learning how to Skype. These have attracted thousands of views.