Developments in technology have resulted in a wealth of changes across all industries. Not only has technology changed the capabilities available to businesses, but it has also caused shifts in the realm of consumer culture and customer expectations. Lessons from the hospitality sector might just be the bridge to narrowing the gap that certain industries have to face, including the evolving face of modern finance.
In order to keep up with the changing trends in customer expectations and habits, the banking sector is having to face an "adapt or die" scenario. Finance professionals expecting to thrive in this evolving economy need to understand what customers want and how to exceed their expectations. Grasping these changes can help banks move forward with confidence and make the adjustments they need to continue to grow and thrive in the modern finance industry.
Top challenges facing banking and financial services
The finance industry has recently experienced some profound changes. Here are the main areas with which professionals should familiarize themselves.
1. Emerging technologies that increase competition
Banking industry professionals face a rise in competition from two main areas:
Customers no longer feel limited by geography
Generally speaking, customers no longer need to physically access the banks with which they want to work. They can do most of their banking online, which therefore opens up the competition across the nation and around the world. Customers look instead for the banking options that provide them with the best deals, regardless of whether or not this particular bank has a branch within driving distance.
Digital capabilities make it easier for new banks to emerge
No longer must they invest in building a brick and mortar business, new competition can focus on providing exclusively digital access for the modern customer. New banks can use the variety of technological capabilities available to them, including machine learning, to better understand customer needs, capitalize on them, and create a bank that provides a strong attraction for customers. Without a fixed-place business to maintain, these digital options can also offer services at better prices than more traditional style banks.
2. Undergoing changes in the business process in banking industry and prevailing culture business
Customers in general have begun to rely on technology to deal many areas of their daily lives, which therefore leads them to expect and appreciate more digital connections in their financial transactions. This means changes within the core business model for the entire banking industry.
Customers have developed a strong preference and expectation for convenience. They want to complete their tasks with as little hassle as possible, and the more they can do from their smart devices in their own time the more satisfied they feel. These customers have begun to expect and seek technological capabilities to solve the common issues they encounter.
Banking businesses have the potential to tap into more AI-based technology. This technology helps better understand what customers expect from the banking industry and what steps are needed to build a strong reputation in the sector. This technology can also predict customer behavior and provide greater personalization throughout their interaction with the bank.
3. Changing customer expectations reinforce the impact of service quality
As these technological changes reach an increasingly dominant portion of consumer culture, customer expectations have also begun to shift. Customers themselves want to see banks possess the ability to engage with them across multiple digital channels. They want to know that messages they send on social media or questions they pose on the chatbot on the bank’s website will receive the same, accurate reply. They want to have the capacity to reach the desired brand when they want it.
Not only do these customers want the capability of reaching their desired financial institution across these digital channels, but they also want to receive personalized service. They want to interact with company representatives that care about them individually, as a customer. They want to know that their business matters to the bank and have that concern reflected in their interaction with the financial institution.
Modern customers are so concerned with personalization and high-quality care that it even outpaces their customer loyalty. These consumers do not share the tendency of past generations to feel a genuine affinity for their favorite brands. They express greater concern about what a particular brand can do for them. This leads to high rates of turnover and a general lack of loyalty from customers.
The attachment customers feel lies more towards the services they receive and the experience they encounter at the bank rather than the brand name. The financial institutions that thrive will understand how to create the experience, therefore, that customers want to see.
4. Inability to keep pace with changing technology
One of the biggest issues in the banking industry also lies with the changing technology itself. With the rapid rate of evolution that the industry has encountered, many businesses find it a genuine struggle to keep up. The systems and capabilities themselves continue to update and change, and the customer expectations right alongside them.
Without the resources needed to invest in new technology and software, financial institutions turn more towards relying on outdated systems and paying to repair them as needed, rather than investing in the systems and capabilities that their clients want to see. These businesses allow themselves to fall further and further behind their customer expectations, as they fail to find improved solutions and continue to offer only old systems and capabilities.
The businesses that struggle with their technological updates also often show struggles with their integration across multiple departments and systems. With the different functions of the bank operating more in a silo than as a unified system, customers struggle to get the personalized services that they have come to expect. These banks find themselves unable to keep pace with the customer expectations of a digitally-connected world.
Rather than look for ways to adapt their technology and investigate which upgrades would have the most significant impact on their ability to offer customers the services they seek, the banks continue to move slowly along with their outdated capabilities.
Hospitality solutions to banking industry challenges
As the finance industry continues to ponder these challenges in the retail banking sector, they do not have to despair. Solutions do exist that can help them create stronger bonds with their customers and begin to offer the services that these customers have come to expect across all industries.
The hospitality industry, in particular, has solutions that the banking industry can use to begin to turn their businesses around. Those who thrive in the hospitality sector understand how to better engage customers and adapt to the changing world of technology, and that information can empower banking employees and executives to take the next step forward towards success.
Here are just a few of the ways that providing hospitality training for employees in the banking industry can help financial institutions improve their customer engagement and position themselves for a stronger future.
1. Briefing & debriefing: Towards team efficiency
The hospitality industry is the world champion in briefing and debriefing: once every day for the entire operating team, before and after each service 3 times a day, once a week for the week to come and to review the past week, once a month for the month to come and to review last month. These briefing and debriefings are done including both the kitchen (back of house) and the service team (front-of-house) which allows the teams to be insync when it comes to delivering the best sevice for their clients.
Briefings and debriefings only have one objective in mind: improve the customer experience.
The banking sector, with its multitude of back-of-house departments should also have one single objective in mind: serving the final customer who will either get the services on-line, at a desk or with a customer service representative. The briefing and debriefing tool can be applied to each of the departments and enables to increase the inter-departmental efficiency as well as ultimately improve the customer experience and speed of answer.
2. Feedback culture: Towards improving customer service
Hotel staff have to be independent and need freedom to take initiatives, since they are spread everywhere in the hotel and can be confronted with customers at any given time during the day or night without the presence of their manager. Colleagues working together depend on the feedback they give and receive to/from each other. They need to trust themselves and trust their colleagues to respectively give and receive feedback.
This feedback ranges from professional to personal feedback; colleagues should feel free enough to deliver all types of feedback. They need to learn how to do this and be respectful towards each other, understanding that it is only a good service culture that will allow teams to better perform and work in a more harmonious environment.
Feedback has only one objective: improve the way things are done.
The banking sector is very much confronted with the same situation with teams working independently from their managers and depending on each other to improve the way tasks are done. Professional feedback is considered relatively easy by banking staff but the personal feedback is not so natural. Understanding that feedback should not be judgmental is not yet easy for many bankers.
3. Customer service culture: Best practices for the banking industry
The hospitality industry focuses on creating customer experience via three main P’s: Product, Process and People. The product is defined by the market and the type of customers you are looking for. The processes or Standard Operating Procedures allow the strategy to be lived by the customer during each interaction with the hotel and the staff. When the first two P’s have been well defined, then staff can focus on making the difference by mastering the standard operating procedures and focusing solely on the customer.
Customer service culture has only one objective: satisfy the end customer.
One bank product is very much equal to another, the processes are very similar among banks with some minor differences, but in the end, the difference is made through the people. A customer will recommend a bank thanks to the service received or become the worst ambassador of a bank because of the lack of focus and concern given to him/her.
Anything done by anybody in the bank at any given moment should only have one objective in mind: to satisfy the end customer. A bank needs solid products, clear processes and trained and hospitable people, like the hospitality industry and like any service industry.
Improving customer perception at every touchpoint
As digital capabilities continue to play ever-increasing roles in the interactions between customers and brands, the customer touchpoint has experienced significant reductions. Customers do not engage directly face-to-face with as many brand representatives as they once did. This means that each time they do engage with someone in person, the touchpoint has that much greater chance of creating an impression with the customer, both positively and negatively.
Brands need to learn how to create a hyper-personalized experience regardless of industry, which is what makes hospitality training valuable for professionals in so many sectors.
EHL Advisory Services training programs can help build a stronger workforce and prepare those in the banking industry to face the future confidently with an eye towards growth.