The humanization of financial institutions, where the user becomes the protagonist of every commercial strategy, is the industry’s new paradigm. And to get there, the customer’s multichannel journey must be taken into consideration in order to create rich, invisible and personalized experiences, powered by data collected from online and physical interactions.
Financial institutions are competing to remain at the forefront of a field where technology companies are advancing quickly, propelled by frictionless user experiences (UX). Veritran, a technology company and pioneer in the development of business solutions for the digital transformation of financial companies, views this panorama as an opportunity for banks to develop their services by connecting with audiences and offering multiple-use products that can be used anytime and anywhere.
“Superapps are the revenge of banks," said Daniel Aguilar Arias, Veritran's vice president of business development for Latin America, at a roundtable of Colombian industry leaders organized in June by iupana in partnership with the technology firm.
"With this tool in the palm of their hand, banks are entering the game with the same rules as tech giants like Facebook, Google and—with its recent foray into finance—Rappi,” Aguilar Arias says.
"If a bank has an app, it can start incorporating more and more things. [...] It's time for these types of institutions to start playing a role that, today, everyone else is playing," he says.
Similarly, the executive says that, although financial institutions have been evolving digitally, achieving a true archetype of customer-centric banking depends on the technological tools selected and how they are employed.
"With the emergence of TV Banking or Bank Café, the latter of which was very spectacular and was highly publicized in the media, banks have not known how to take advantage of them; that is to say, how to use the space for cross-selling," Aguilar Arias says at the event in Bogota.
In order to address this situation, banks have to focus on the concept of invisible banking and and on facilitating processes and financial decision-making for customers in non-intrusive ways. In other words, financial products such as cards, accounts or loans take a back seat, giving way to easier and more direct ways of carrying out transactions, centralized in platforms such as applications. This way, in just a few clicks, the customer can open a digital account or apply for a consumer loan.
"Invisible banking is a concept that also invites us to be massive and assertive. Let's remember that the technology is already there, we just need to learn how to use it," says the Veritran executive.
Breaking the transactional data barrier
While the digital channel may be a financial institution’s biggest branch, it is not always the division with the highest sales volume. The challenge for banks is to ensure that virtual branches achieve the same performance indicators as physical ones.
At the same time, it is important to highlight the potential of more personalized banking to achieve sales objectives. There are already entities that use their physical spaces to obtain multichannel information from their customers, leveraging technologies such as Artificial Intelligence (AI).
ADL Digital Lab, the innovation hub set up by Colombia’s biggest conglomerate, Aval, uses AI cameras in some of its offices — under the concept of financial smart cities — to see and analyze users' emotions and reactions, as well as to study telephone interactions.
The idea is to gather qualitative information about their preferences, transcending the quantitative data from the transactions they make on a daily basis. The goal is to increase user satisfaction and trust by providing them with the right product at the right time.
"The bank cannot be left holding only part of the [transactional] data because it is definitely not going to get the best results," says Tito Pablo Neira, director of data strategy at ADL Digital Lab.
So, using Big Data, analytics and artificial intelligence, banks are shaping their personalization strategy, allowing them to direct the customer to the right channel more effectively; utilize cross-selling opportunities; enable other advanced tools such as anti-fraud models; and gauge their interest in consumer credit, for example.
"The challenge is how to connect these qualitative areas — sales, customer service, user experience — and how we add data to generate a better, more human interaction," adds Neira.
The challenge of data privacy
However, while the information and analytics engine is huge and the opportunities are almost unlimited in terms of what can be offered to customers, this new dynamic is also forcing entities to protect user navigation. They are doing so by building applications with increasingly sophisticated security, to shield the institution and the user’s data.
"The potential of data analytics is unlimited, but it comes up against privacy and the strict regulations of each country and forces us to recognize that data must be protected, not transferred without authorization," says Danilo Gonzalez, senior vice president of technology and operations at Scotiabank Colpatria.
In his opinion, data protection requirements will get tougher, forcing us to rethink the approach to authenticating and signing up customers. Banks, he says, will have to recalibrate their processes as solutions evolve while always taking care of the user experience. "If the process becomes hyper-complex, the customer becomes frustrated; however, if it is no longer secure, the experience is even worse," Gonzalez warns.
"Let's keep in mind that customers are becoming less loyal as barriers to mobility decline, so if you don't have that closeness, sensitivity and security, you're going to lose them," he says.
Personalizing profitability (and the future)
But as the data world consolidates, institutions are also looking to the profitability horizon.
"Profits are like oxygen for companies, but sometimes the oxygen has to be kept back to achieve the underlying objective, which is to benefit the customer in a very big way," says David Soriano, finance manager at Ualá Colombia.
According to Soriano, most fintechs are committed to serving the user and reaching a sales volume that allows them to grow. Though their decisions are not always synonymous with profitability at the start, but they can be in the future.
“We believe that humanization goes hand in hand with having satisfied customers. At Ualá, we want to hold back as much oxygen as possible in order to really change this market—one that other companies may not target since they are of the idea that profits should come first," he says.
In order to boost the appeal and the benefits for users, entities are looking to generations —millennials and Gen Z — that are particularly drawn to a multichannel service approach and are on the cusp of accumulating wealth since they are the predominant labor force.
“We will have to review not only the issue of analog and digital experiences but also the immersive opportunities that still elude us, such as the metaverse," said Ana Milena Montaña, manager of customer experience, marketing and digital channels at Davivienda Corredores.
"These generations have a very strong link to gamification and it seems absolutely normal for them to buy clothes in a parallel universe. That is not so easy for us today, but in eight years it will be absolutely normal," she predicts.
Whether in the metaverse, in the physical branch or in a superapp, institutions will have to put the end user at the heart of business development and innovation, in order to remain relevant in a world where timely and easy-to-access financial services are becoming increasingly important.
These, and other viewpoints, were shared and discussed at the private roundtable "Humanization of Digital Banking" in Bogota, Colombia, organized by iupana in partnership with Veritran.