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Improving the customer experience

By Julien Schaffner, Director, Deloitte Digital Luxembourg. According to the European Banking Federation, 9,100 bank branches were closed across Europe last year. In addition to the obvious motivation for cost reduction, one trigger for this phenomenon is the decrease in clients’ visits due to extended use of digital channels. Looking at the ongoing digital revolution and its numerous documented disruptions, most observers might want to understand whether banks only use digital as a cost reduction lever or if they also try to improve their performance and customer experience. Measuring customer satisfaction through indicators such as Net Promoter Score is now part of the core strategy in most industries, raising customer expectations regarding banking services as well. Fortunately, recent innovations and new technologies can help banks improve customer satisfaction. Since three billion of global retail users should have access to banking services through digital channels by 2021, banks will have no other choice than improving the quality of their digital touch points while thinking ahead of incumbents, FinTechs and non-traditional competitors from other industries to mitigate the risk of client base erosion.

Bringing online and mobile services to the same level as other industries is essential to survive

As illustrated in the Deloitte Luxembourg Digital Banking Benchmark 2017, local banks must upgrade or implement new services to better serve the new digital needs of customers. As FinTechs and non-traditional competitors are changing the rules of the game and bringing up new benchmarks, customers now expect to get their account created within a few minutes as they do with other online service providers. Banking institutions in neighboring countries are already standing one step ahead in terms of online on-boarding processes, functionalities, navigation, advice and credit features, including on the mobile channel. For instance, 40 percent of retail banks in neighboring countries offer money management tools, as opposed to 17 percent in Luxembourg. Despite their satisfying performance in terms of ergonomics and cybersecurity, banks in Luxembourg must innovate and deliver better and faster to remain competitive. Our financial institutions have developed relevant strengths and local expertise they could leverage when defining their digital strategy.


High investment into digital channels is not enough to achieve customer adoption

While the challenges are many, banks are fully able to catch up and even lead on some aspects, to eventually offer improved customer experience. But running after all of the most innovative features will lead them to bankruptcy. They must first perform an in-depth reassessment of the enterprise digital strategy, which should redefine their business model and competitive positioning. Then, the operating model and required organization agility must be accordingly implemented. This key step is essential and reduces new product time to market by more than one third in most cases. Finally, technology will be used as an enabler. The path to transformation should be carefully designed to support the objectives of the bank: for instance, this kind of initiative often starts with the current digital maturity and organization assessment.


Partnering with a FinTech is also a component for a successful digital strategy implementation and improve the customer experience

While working on their key strategic priorities and path towards digital transformation, banks will always seek to deliver the best value to their clients. To define these priorities in the product strategy, the approach must include the analysis and mapping of the customer journey to understand the customers’ interactions with banking related services. Customer centric organizations and processes are most successful in client retention and acquisition. A recent Deloitte survey involving 3000 bank customers highlighted their awareness of regulatory constraints for banks and the positive output customers perceive from these regulations. However, the respondents, looking at enhanced customer experience for the account opening process, indicated they would not recommend the institutions to friends and family, neither buy additional products from the bank. This result was particularly clear in the case of Millennials, also when looking at better experience on Mobile channels.

Technology is therefore becoming a key enabler when it comes to meeting customers’ expectations and supporting banks’ digital strategy: FinTechs, RegTechs and other technology providers can be seen as partners and help banks to implement innovative solutions.


The next Deloitte Digital Series takes place on 5 October, and will focus on presenting the various levers banks can use to boost their digital performance and improve customer journey, including innovations proposed by FinTechs and other technology providers with an impressive track record in other industries.