The business case for card modernization
“The last best experience that anyone has anywhere, becomes the minimum expectation for the experience they want everywhere.” Bridget Van Kralingen, SVP, IBM Global Markets
Never has this quote been truer than right now. Gone are the days of comparing the customer experience of your financial institution (FI) to that of another FI within your peer group. With the rise of the mobile device, predictive analytics and AI, the “experience” has become industry agnostic. With the impact of COVID, and the shift in consumer preferences (largely from in-person to digital), it’s safe to say there’s a spotlight on the digital transformation that has been slow coming in financial services.
We are now living in a world of the digital “haves” and “have nots”. And the award of best-in-class, which translates to new or repeat business, is largely awarded to the organization that is laser focused on providing the best customer experience; one that has been working to narrow the gap of digital competencies. Your customers aren’t impressed if you’ve reduced the customer service on hold time from four minutes to one minute if they prefer to interact via chat and in real time.
It’s time to ask the question…where does your FI stand in the race to provide a truly exceptional experience? Be sure to answer this question while proudly wearing your consumer hat. And, no matter what the answer, the pace of technological change (because of market demand and consumer preferences) isn’t slowing down anytime soon; so, you must be prepared to act swiftly.
Chances are, you know you have room to improve. And that’s okay.
Here are a few things (not all) to consider as areas of impact as you begin to build a business case for becoming a digital-first institution:
- User experience or improved customer engagement. Your first need to understand where you are and where your customers want (or expect) you to go. What are your customers telling you? Or better yet, what is your data telling you? Is your attrition rate increasing? Are consumers using more or less from your institution than in years past? What experience are you providing today and how does that compare to what you *should* be providing?
Let go of what has been and set your eyes on what could be. This includes a massive mindset change. Don’t go into this wanting new technology to do exactly what old technology did. Embrace the advancements and changes. New engagement processes and models will be created. But in the end, your customers will thank you and new prospects will make their way to your new offerings. Worried it might shock your customers, or that they aren’t ready for a change? Don’t be. Your customers have been consuming the latest technology from every industry EXCEPT financial services. It’s time to give them what they are used to and what they expect. Or they will find it elsewhere.
- Financial savings and revenue impact. What’s the old saying? The best things in life are free, the second best are really expensive? There will be a cost associated with a transformation of any kind; especially digital. But, with the right improvements, your return on investment can pay dividends. It’s important to focus on what financial levers new technology will impact within your institution. What cost savings can be realized and in what timeframe? Will you be able to discontinue obsolete systems? With more self-serve options for your customers, will your operating expenses be reduced? How will this drive engagement and therefore increase profitability of those customers
Pay attention to the revenue levers that can be pulled with the implementation of new technologies. Will your cross-sell penetration increase? Will you generate more fee income or interchange revenue? What is the impact to your product offering? How does this enhance your message to the market in the differentiation of your institution in your marketing spend? As you evaluate options, identify partners or technologies that will help to recoup your investment.
- Employee experience and retention. Lastly (for today), don’t forget about the impact to the experience of your employees. Making the shift to digital-first, and prioritizing those efforts provides your employees with a sense of pride in working for an innovative organization. It allows them to be confident that they are providing a positive experience to the customers or products they serve.
Of course, this is not an all-encompassing list, but it’s a good start.
Yes, there are budget allocations that will need to be made.
Yes, there will be an impact to your customers and potentially internal disruption.
The reward however — a more engaged and satisfied customer — is far greater than the risk.