Open banking will allow consumers to have more access to and control over their financial data. But with trust more important and more elusive than ever, data is a resource consumers are cautious about handing over. Indeed, 73% of customers say trust in companies matters more than it did a year ago and 46% of customers feel they’ve lost control over their own data.
The challenge for financial service providers will be to demonstrate to consumers that their data will be used responsibly and to transform CX with the right technologies. Only then will they be able to secure their future in the new open data ecosystem.
And it’s no small challenge. Given banks are currently being hammered by remediation efforts as part of the Royal Commission fallout, it’s hard for them to look beyond providing the bare minimum to comply with the requirements of the Consumer Data Right (CDR). Those that can move forward strategically and rapidly with a fresh approach to CX and the right tech on board will therefore be at a significant competitive advantage.
Banks are starting to build trust again through micro moments of help and attention. For example, push notifications issued to customers when they have upcoming payments are a powerful way to show the provider has their customers’ best interests front and centre. Deliver them via your customer’s preferred digital channel and the message is much more compelling.
The focus becomes less about extracting fees, and more about proactively helping the customer to manage their finances. This kind of tailored, relevant and timely information goes a long way to gaining the trust of today’s data-cautious consumers, with 79% of customers willing to share data in exchange for personalised engagement.
And by moving away from the hard sell, quick, product campaigns the industry is known for, banks can take a bigger-picture view of their customers. Communication becomes about being proactively helpful with no strings attached, rather than every moment of contact being used as an opportunity to sell. Strategically, this long-term, relationship-building, CX-focused approach will pay off.
When it comes to working with SMBs, the value exchange on offer is going to play an important role in developing those strong customer relationships. Small businesses, for example, are particularly well placed to benefit from opening banking. Traditionally, access to credit has been a major hurdle for them, but the open banking ecosystem will see fintechs offering new levels of data analysis to enable competitive pricing on finance.
Small businesses will also be offered – and start to expect – fresh solutions to their other common business needs as banks start to position themselves as partners, not just bankers.
Indeed, ‘partnership’ is set to be a key concept in open banking – not just between providers and their customers, but across the whole ecosystem of fintechs, finservs, banks and third-party providers, and particularly between those specialising in analytics and UX, and those with the deep balance sheets and customer reach of established banks.
AI and other new technologies – especially those that integrate and analyse data from sources across the ecosystem – will play a vital role in open banking. Indeed, consumers expect businesses to use them to create better CX. However, bankers need to be augmented by accessible intelligence, not just artificial intelligence.
The industry must be careful not to undermine its human responses with digital solutions. Using technology to complement and empower those working in financial services will enable the laser focus on consistent and connected CX that today’s consumers demand.
The ethical dilemmas that finservs have always faced will only become more complex with the introduction of new technologies like AI, along with increased access to data. When you measure and make decisions purely on data, you run the risk of reinforcing biases that fall beneath customer and community expectations. It’s imperative that new technologies are developed in such a way to embrace diversity and avoid biased exclusions.
Out of the recent rubble of eroded trust in traditional banking, an ecosystem that fosters innovation, partnership, competition and – above all – improved CX is growing. Its challenges are not for the faint-hearted but its opportunities and rewards are many for those ready to embrace the paradigm shift of open banking.
To find out more about how open banking will help finservs create compelling and personalised consumer interactions, download the Accenture and Salesforce ebook Beyond compliance: Winning with open banking.