Hybrid Bank 2.0: How financial institutions are tapping new sales potential with an optimised customer experience

It is not a case of one or the other, but both: to increase customer satisfaction and thus loyalty, it makes sense to merge online and offline offerings into a hybrid overall experience.

Steve Jobs once said: “You’ve got to start with the customer experience and work back towards the technology – not the other way round.” In banking, we cannot repeat this sentence often enough and should take its message very seriously. The customer’s experience is central and success in implementing the technological requirements for meeting the customer’s expectations can ultimately decide an institution’s future.

According to the Boston Consulting Group, “hybrid customers” are growing as a group in several markets. The term refers to consumers who contact their bank both digitally and in person. In the USA, the percentage stands at 51; in the United Kingdom it is 38 and in Germany it is already 37 percent.

Source: BCG Retail Customer Survey with 42.000 respondents from 16 countries

 

To continue offering the customer a free choice between making contact in person, digital services and a combination of the two, financial institutions must undergo a “bionic transformation”, according to Boston Consulting. This is already well underway. Indeed, this is evidenced by the fact that the number of employees per branch has fallen by 3 percent in comparison to 2015, while the number of customers has increased by 3 percent. Holger Sachse, partner and retail banking expert at the Boston Consulting Group had the following comment: “German retail banks are still letting too many opportunities for digitalisation pass them by. However, bionic transformation – the efficient, smart and customer-centric interplay of personal advice and digital products and services – plays a decisive role in long-term market success.”

Bionic transformation: higher revenue at lower costs

The management consultancy sees three aspects to approaching this: digital customer interfaces can increase revenue by up to 5 percent by making the service more efficient. “With faster processing times and more precise decision-making, costs can be reduced by 10 to 25%.” The strategic choice of branch locations can also lead to revenue growth and increased customer satisfaction. Furthermore, interlinking online and offline services can enable greater profitability and lower prices to be set.

As well as in retail banking, the hybrid approach is also proving effective in investment advisory services. Potential asset management customers can be identified at an early stage through the analysis of customer data. They can be informed of their potential savings online and opt for either a self-check by a robo-advisor or a personal consultation. The customer advisor uses comprehensive digital aids like our Financial Advisory Workbench to prepare for the consultation. During the advisory appointment, the user-friendly, well-structured interface helps to structure the process and makes it easier for the customer to follow propositions and options.

API-based architecture like our Digital Banking Hub makes it possible to connect online and offline services with each other as desired. It does not matter whether digital applications developed in-house or third-party solutions are used. The platform integrates all applications into a seamless customer experience that can be modified according to individual customers’ requirements. Digital processes also enable the bank to keep improving its knowledge of customers and to approach them in a targeted manner with individual propositions.

At our next Digital Banking Breakfast, you will have the opportunity to delve into the topic of “Hybrid Bank 2.0” in more depth with colleagues and our technology experts.

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