In a race to compete in the digital world, banks may have to be bold as well as innovative. Jim Banks speaks to Mark Jamison, global head of customer experience at BBVA, about emulating the biggest companies in the world, which excel at customer interaction, and using feedback to direct the design of products and services, and to the bank’s digital marketing head Bernard Crespo about making bank relationships a game customers can win.
The emergence of disruptive competition in the banking sector has come at a time when banks already know they have to make drastic changes to the technologies that support their business. The speed of change at the front of banking relationships is constantly increasing, forcing banks to deploy solutions that keep them dynamic and responsive in dealing with customers, but - unlike their new competitors - they are hampered by aging legacy systems that were not designed to respond in real time.
New market entrants are unfettered by these old systems, so they cannot just take a more agile approach to newer technologies, such as mobile solutions, but must also take a fresh approach to designing the kind of high-quality customer experience that has been defined in other industries. What people have come to expect from big retailers like Amazon or global technology companies like Apple is now what they expect from their providers of financial services. This is a tall order for banks that have been used to a very different dynamic in their relationships with customers.
"There are two big challenges in the financial services industry today and the first one is basically the changing consumer. Because mobile has taken off in such a powerful way, consumers have become used to having everything right at their fingertips all of the time, so their expectations and their demands on banks have changed dramatically," says Mark Jamison, the former chief digital officer of Capital One Bank who earlier this year became BBVA's global head of customer experience.
"The second thing is that we are seeing new entrants into our category. So, even though banking is heavily regulated and fairly traditional at its roots, we are seeing all sorts of new competitors creating new products and services at the front end that often tap into banks at the back end. So, they are basically disassociating customers from the banks themselves. A good example is one called Simple, based in Portland, US, which simply said it would do banking in a different way. It brought beautiful design, simple products and real advocacy for the customer into its offering. BBVA happened to buy it because we like it so much, but it is a great example of a new entrant coming in and using a customer-centred approach," he adds.
The focus on the customer is central to the goals of BBVA's transformation to lead it into the 21st century, which involves a comprehensive strategic review of the banks operations from its digital solutions to the branch experience. It is emphasising knowledge banking - extracting the value from data to deliver better services - to go beyond what traditional banking offers. At the same time, BBVA has realised that it is important to create customer experiences that do not rely on a specific device or channel, but are consistent no matter how customers choose to interact with the bank.
"In this mobile revolution, customers will get content and information through all kinds of devices. It could be through their mobile phone or a tablet, through the television or through something wearable like Google Glass. So, our technology was built in a way that can serve up all of the different devices with the content," explains Jamison.
"For example, we have a goal to double the amount of users for our online services, and to quadruple the number of people using our mobile services. At the end of the day, the mobile and the internet could be through a responsive website; through a tablet app or a mobile phone app. We are indifferent because the technology powers every one of those devices," he adds.
To boldly go
A comprehensive strategy for modernisation and customer engagement cannot simply replicate existing bank services through new channels. For Jamison, banks have to look at innovative services around emerging technologies. The digital wallet, for instance, can be more than just a way to make payment simpler and quicker using near-field communications (NFC) capability. It presents an opportunity to provide value-added services that differentiate the application from the many other ways a customer could make payments.
"'Digital wallet' is a fascinating space. There is a bit of a 'chicken and egg' problem. First of all, consumers need to have devices that are NFC-enabled. Today, the iPhone, for example, doesn't have that, although most ordinary devices do. First, you have to have the device. Second, the retailers need to have the infrastructure to accept contactless payments. In Scandinavia and in Europe - particularly here in Spain - more than 50% of retailers have that and by the end of 2015, the vast majority will. When you move past that, the real value of a digital wallet is the information and the services you provide prior to and after the sale. After all, customers don't find it difficult to pay at the moment," Jamison remarks.
"When you pay and tap with NFC, the transaction is probably slightly faster, but with our technology, you get a push notification telling you about the transaction, and you get content and information about that purchase. If you bought a TV, for example, there is a window of a few days when you could decide to finance that with the bank. So, there is a lot of value that can be added to the transaction and that will be one of the big drivers of consumer satisfaction in the mobile wallet space," he adds.
This bold thinking says a lot about Jamison's view of financial services. He has spoken in the past about how banks should emulate companies like Apple when it comes to technology platforms and about the industry having too conservative an approach to change. The industry should, he believes, embrace not only new technologies, but also a new culture of doing business that puts the customer centre stage.
Adopting this culture involves overhauling out-dated technology and ensuring that information can be brought together across silos that have developed in the traditional banking structure.
"From a customer point of view the over-used term is 'omnichannel'. They just want a relationship with their bank. They want their bank to be their advocate and to help them. Sometimes that is in a branch, sometimes through a call centre, but the majority of transactions now are through the digital channel. So, we've invested heavily in a real-time platform so that when a transaction occurs it becomes available across every channel through which a customer interacts with us," Jamison explains.
"Our system is architected using the customer as the unique key. In other banks, legacy systems may be keyed to the first account a customer opened or the geography the customer is based in. Here, the thing is the customer and everything else is centred around that. Also, we view our transformation as an industry and as a bank in two ways. First, there is a big investment in technology. Second, there is a cultural transformation that must go with that. You have to train your staff to use that technology to interact with customers seamlessly across all channels. People are what make the difference," he adds.
Playing a new game
Another bold idea the bank has implemented is the use of gamification to build customer loyalty. Since June 2013, visitors to the bank's website have been able to access BBVA Game, which, for the bank, provides a way to get to know its customers better while providing a fun interface for the customer. Each transaction carried out through the website generates points that users can exchange. There are, for example, prize draws, but customers can also exchange points directly for rewards such as music or film downloads.
"It means taking the gaming experience and learning from the gaming context and translating those dynamics and mechanics into other contexts to create engagement in financial services. It is about being ready and courageous enough to assume a little risk to do something new and exciting. We implemented a gamification solution because we knew in our hearts that there was something behind it. We took it into our transactional web strategy and there has been an ongoing cycle of testing and learning," explains BBVA's head of digital marketing Bernardo Crespo.
"We have been brave enough to take a new trend and put it into practice. It enhances transactional services online and helps people enjoy learning how to use these channels. It has to be enjoyable and it has to motivate people to use it anytime and anywhere. Gamification is an approach that suits everyone, even people over 60 who want to engage with new technologies," he adds.
Every bold initiative carries some risk, but banks that combine innovation with all they know about risk management will be able to keep up with the market leaders in customer experience and put the industry at the forefront of service delivery.