Digitalising Customer Experience and Engagement in the Banking Sector

The Covid-19 pandemic accelerated digital transformation in banking like never before. As banks began serving customers virtually, customers were quick to adopt this convenient mode of engagement. Digital solutions helped banks enhance customer experience during this phase, considerably raising customer expectations. As customers and banks both experience its increasingly positive impact, digital is here to stay even in the aftermath of the pandemic.

However, digitisation in banking is still evolving and a lot more can be done in the areas of customer engagement and personalisation. The breakneck speed at which technology continues to advance requires banks to adapt swiftly. Incumbent banks who do not adapt to innovation face the risk of being left behind.

Over the years, HSBC has worked on leveraging innovation for a better customer experience and continues to work towards making banking more digital. Here are some key insights that I’ve seen on digitisation in the banking industry.

Digital transition in banking: Keeping consumers informed and helping them navigate the journey

Banks need to be cognizant of the fact that a new digital customer segment is emerging. This segment comprises customers that primarily transact digitally. Banks need to rethink customer engagement for this segment, especially in a region like Southeast Asia, which has seen a huge influx of digital users since 2020.?

Further, banks need to change the way they communicate with this segment to engage better. Communication channels like apps saw a 50% increase in daily active users for Android devices and a 48% increase for iOS devices between Jan-April 2021. Banks can consider new formats like push notifications, emails, and in-app notifications to communicate effectively with this digital-savvy segment.

As we live through a phase where inflation is at decadal highs and the cost of living is rising dramatically, banks need to rethink the old way of segmenting clients. The industry can leverage data and analytics to identify behaviours and actions and engage meaningfully with various segments. For instance, using a data-led approach to support everything from need identification and client engagement to underwriting models, they can offer solutions like Buy-Now-Pay-Later (BNPL) to clients struggling to keep up with their finances and suitable investment products to those who have substantial savings.?

Source: MoEngage

Strategies in digital innovations for banking: ideas worth exploring

Customised communication models

Hyper-personalised banking has been a buzzword for quite some time. However, banks are still to exploit the complete potential of tailor-made customer communications and solutions. Banks can use machine learning models to identify which channels of communication should be used to specific demographics, thinking styles, and usage patterns. For example, millennials may prefer channels such as apps, chatbots, and emails, while older customers may prefer getting a call from the bank directly. All in all, banks need to shift from the “one size fits all” approach to address every kind of customer.?

Security – a non-negotiable

In a digital world, security is not an option. Banks need to work on making their systems more secure to gain customer trust. Having transparent policies, adequate disclosures, and educational resources will make customers more comfortable when transacting digitally.?

Branching out

Most banks are cutting down on physical branches as more customers prefer interacting virtually via mobile banking. However, banks need to ensure that the needs of every customer are met. Many customers still prefer the in-person experience and branch banking also cultivates a sense of partnership and community. Therefore, banks may consider creating a hybrid presence to cater to all types of customer preferences.

HSBC leading the path in digitalization?

HSBC has been at the forefront of innovation, staying updated with hi-tech solutions to serve our clients better. The aim is to empower the customer by allowing them to carry their bank in their pockets. And while we harness the power of digitisation to make banking easier for customers, security has never taken a backseat.?

HSBC screens over 25,000 transactions every minute for financial crime. Further, the bank’s industry-leading data science tools and expert analysts and investigators ensure that your savings and transactions are protected end-to-end. We had nearly 1.64 billion log-ins to our personal banking mobile apps in 2022, which is testament to the fact that our customers trust us with their money.?

On the blockchain front too, HSBC has made leaps in customer service by cutting down transaction time from 10 days to under 24 hours. Further, we have digitised documentary trade contracts and pioneered their use on blockchain. This has allowed us to do business more sustainably by reducing the use of paper.

Beyond this, HSBC has always focused on using data and related technologies ethically. Our data analytics, AI and machine learning models offer tremendous potential to help serve our clients better by segmenting them for better communication, recommending the right products, and enhancing engagement.??

Source: Forbes

The banking industry has evolved through rapid digital transformation catalysed by the pandemic. As more customers adopt digital as a primary means for banking, a lot needs to be done in this space if banks are to truly leverage the potential of digitalisation. The future of banking is digital. In this direction, banks need to continue working towards harnessing innovation for making banking easier, faster and better for customers.