Photo: Citizens, who are increasingly digital, will demand better services and more personalized treatment from their financial institutions. Credit: Unsplash.

By Fernando Roca

Facing new challenges is never easy. That's just what the post-COVID-19 era brings: a recessive economic environment and the possibility of new outbreaks of coronavirus (COVID-19). These challenges will increase the need for a strategy in which the customer-centric consists not only in offering more personalized products, but also in establishing an emotional connection based on technology, but without leaving aside the human factor.

More changes in banking
In recent months, the pandemic has further accelerated the digitalization of banking. It is expected that 55% of users will increase their interaction through apps with their financial institution, according to a report by Capgemini. This trend will also be marked by the closure of branches, something that has been happening since 2010. In Spain, the number of physical banking offices has been reduced by 60% in the last decade.

This fact, added to the increase in savings that will occur in the coming months, according to the Restart report by Opinno, may represent an opportunity to bring the bank closer to its customers, as well as a good opportunity to improve the user experience. In fact, it should be noted that the customer happiness of financial institutions' customers is already considerably high compared to other sectors: 7.42 out of 10, according to the V Barometer of Financial Innovation, prepared by Fucas and Finnovating.

“Until now, many banks took digitalization as a process of cost reduction. Now that digitalization has accelerated, banks see the need to offer a more proactive, individualized user experience without leaving anyone behind,” says Opinno's Digital Experience Manager, Laura Garcia.

The bank customer of the future (and of the present)
The health crisis caused by the coronavirus pandemic has changed consumer habits. Some trends that already existed in the banking sector are accelerating and adapting to this new context.

Prioritize customization
Personalized services and products will be more frequent in the coming months, as stated in the Restart report of Opinno, something that has already been happening in recent years, especially among digital natives. Most of them, specifically 77% according to Cisco, expect from companies a “personalized digital experience”.

One of the most outstanding examples is Unicaja Banco's new product, a life insurance that includes a pharmacogenetic service. Thanks to this coverage, if the client suffers from a serious illness, a study of his DNA will be carried out to identify the most effective and appropriate treatment. “The services could be personalized to infinity, although in the banking sector it should be a soft personalization, less invasive and more friendly”, says Opinno's Project Manager, Aurelia Pérez.

Photo: Clients demand increasingly personalized services, and banks will take advantage of this trend to establish a closer relationship with them. Credit: Unsplash.

Technological advances can substantially improve the customer experience, but Garcia believes that, in some aspects, the human component will not be replaced, since “the trust factor will always be needed in matters such as investment. In addition, data plays a key role in customization, but the cost of developing systems that process the large amount of information is very high and it is difficult to measure the return on investment in technology.

Money can't be touched: the rise of digital payments
Digital payments have been another major phenomenon of the pandemic. 46% of consumers say they have increased their use and will continue to do so in the coming months, according to a study by Capgemini.

Competition in this area is increasing, particularly because of the role played by the fintech sector. “Agility in processes and the regulatory framework are determining factors in fintech, especially since the approval of the PSD2 directive, which allows the incorporation of new actors in the means of payment”, assures García.

Photo: The health crisis has boosted the use of digital means to make payments. Credit: Unsplash.

The main reasons why the user uses this new form of payment is convenience and efficiency, according to VisualObjetcs. BigTech, on the other hand, also offers this type of digital service: WhatsApp Pay, for example, is a service for sending money quickly between users of the instant messaging service. Other companies, such as Apple or Samsung, have made their paid apps one of the most widely used on the market. The arrival of these large companies in the financial sector, according to this report by KPMG, seeks to “facilitate the purchase by the digital customer and obtain information on their payment habits”.

Virtual assistants are here to stay
The use of chatbots and automated voice assistants has also increased during the pandemic. The advantages they offer when it comes to attending simple, concrete inquiries are very useful: they can help improve customer satisfaction by 47%, according to Allied Market Research. However, “their inclusion has been accelerated when the customer experience is not yet very good,” notes Garcia.

One of the most relevant elements that banks must work on is the way they communicate with the customer. “It is essential to use a language that is close and that transmits the right emotions at every moment of approach to the user,” says the technology expert.

Virtual voice assistants will grow significantly in the coming months, among other reasons, because of the fear of touching surfaces. According to Best agency predictions, 50% of queries in 2020 will be voice, which will force the banking sector to adapt its virtual assistants and integrate them into voice recognition devices. Caixabank's virtual assistant Neo, for example, allows users to interact with it through Google Home and Alexa to facilitate queries to the entity. On the other hand, the BBVA assistant can be activated by voice through the smartwatch Apple Watch.

The fintech partner
The role that technology plays in the user experience will become more important in the coming months, as a result of the trends in the sector and the services demanded by users. García emphasizes that “technology has been and will continue to be an inseparable ally of banking, as it can help customers enjoy a better experience.”

Photo: Financial institutions collaborate with fintechs to offer better user experiences. Credit: Unsplash.

In this sense, fintech will become the great ally of traditional banking: “The fintech sector's start-ups were born with the customer-centric in the core and are very close to their customers, involving and redesigning with them,” says Garcia. For Pérez, these companies “have come to fill the gaps that traditional banking has difficulty in addressing.

To obtain mutual benefit from the relationship between large companies and start-ups in the sector, collaboration becomes essential, especially in difficult times. The health, social and economic crisis caused by the COVID-19 will boost the open innovation models that many entities have been consolidating in recent years.

One of the most outstanding examples of this need to continue collaborating and betting on innovation is the capital increase carried out by the Santander bank in its fund dedicated to investment in technology Santander Fintech: the entity presided over Ana Botín injected 26 million euros in the midst of the pandemic. Banco Sabadell, for its part, continued its investment process in the Fluzo start-up during the state of alert, in order to grow the company outside Spain.

The coming months will be marked by changes that will consolidate a trend towards digital in the financial and banking field. The processes of adaptation to new user behaviour will be rapid and will make use of technology and collaboration with actors such as fintechs. In short, in this post-COVID-19 era we will witness a boost to the digital transformation of this sector, whose elements were already under development before the pandemic and which, today, have the priority of getting closer to the customer in one of the stages of greatest social distancing.