Special Features

The customer journey in a digital world: innovation and good outcomes

Harry Hughes | Lending Standards Board
|
29th March 2021
Harry Hughes Lending Standards Board
"Brokers must seek to understand how lenders are adapting their offering (for example, have they introduced a new service to the app for online accounts?) to consider how this will impact their customers."

Innovation and the pace of change in financial technology means more choice and greater access for customers.

But there are also risks, with new products and offerings being introduced which, without proper consideration, could lead to unintended consequences. At the same time, Covid-19 is accelerating a shift towards digital channels and intensifying customer expectations when it comes to the digital banking experience.

By thinking about the customer journey in the digital space, both lenders and brokers can consider how to tailor their products and services to ensure good customer outcomes.

Over the last twelve months we have witnessed a seismic shift in how technology is being used in financial services, particularly when it comes to the way that firms are interacting with their customers.

In the immediate term, those lenders that provided banking services predominantly via branch or telephone had to adapt quickly, whilst experiencing mounting pressure on resources due to staff shortages and branch closures.

In the long term, we are seeing an increased reliance on digital services among banking customers. In fact, more of us are using digital channels then ever before. According to research by RFi group, 73% of UK customers are using digital banking channels weekly (higher than the global average at 71%), whilst mobile banking use has risen among UK customers, notably from 52% to 57% between H2 2019 and H1 2020.

In a bid to adapt to this new reality, lenders are increasingly looking to enhance their digital offerings for business and personal banking customers. In this environment, a seamless digital customer journey will be key if both lenders and brokers are to win and retain new business.

But what does this actually look like in practice?

As a first step, it is vital to ensure that robust oversight and assurance models are in place across the customer journey. This involves lenders and brokers working together to understand the frameworks in which the other operates and identifying anything that might have a detrimental impact on the customer.

Oversight is always important, but especially so following a digital transformation project or change in communication strategy. Brokers must seek to understand how lenders are adapting their offering (for example, have they introduced a new service to the app for online accounts?) to consider how this will impact their customers.

When adopting new digital processes, firms need to have confidence that their product and channel offerings are suitable for the wide pool of potential customers. This should include considering any impact on customers who may have accessibility or other needs. Firms should also have plans in place should the digital channel become unavailable, for example, because of a technology or platform failure.

Managing expectations is also crucial to ensuring an effective customer journey. Both lenders and brokers should guarantee that the customer is provided with all of the information needed to make a decision and explain what the rest of the customer journey will entail beyond the point of sale.

For example, if a lender has a digital only customer journey but uses brokers who interact over the phone, the brokers must ensure that the customer understands how the process will work for them and what its limitations may be going forwards. Managing expectations in this way increases the likelihood of good customer outcomes, satisfaction with product choices, and trust.

Ultimately, whether customers apply for a product directly through the lender or via a broker should not have a bearing on the success of the customer journey. Both lenders and brokers must be equally confident in their ability to help customers at certain crunch points along the way, especially as they look to navigate the roadmap out of lockdown. With temporary business support measures such as the new recovery loan scheme, replacing the BBLs and CBILs due to end in March, business lending customers especially will be looking to their providers for the information, tools, and support they need. Firms should make sure that any support currently offered to customers is not removed without consideration being given as to what replaces it.

There is no doubt that the pandemic has accelerated existing trends towards digital banking. Now, there is a significant opportunity for lenders and brokers to work together to optimise the customer journey and keep these customers on the digital path. Those that fail to recognise the importance of this risk being left behind.

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