4.2 New Technology And The Customer Experience

Question 1

Banks providing good customer experience

Answer 1

When they put the voice of the customer at the centre of any changes in products or channels.

Banks should pay attention to getting it right with their presence systems and progressing research into product development

Question 2

Simplified processes

Answer 2

Many customers want this so that products can be delivered more quickly.
For example: a customer applying for a loan will have better experience if the process is more straightforward

For a bank, this may mean integrating the banks front office, risk management and back office procedures

Question 3

Messaging apps and Chatbox

Answer 3

Accessing their financial products through this
Existing chat bot can handle simple queries and innovation can improve the ability to deal with more complex issues.

Chatbot are able to understand voice and text command
Customers have their own virtual personal banker

Question 4

Systems can personalise products and give advice

Answer 4

For example: software can be used to identify when a current account is in danger of becoming overdrawn

Allows a bank to intervene early and give advice and support
Can recommend the best product for a customer and help them set goals and track the progress towards these objectives.

Can help the customer use the product safely

Question 5

Digital systems

Answer 5

Can you use graphics to allow customers to track their personal financial data in real time

Make customers more aware of their financial situation can help change the behaviours where this is appropriate
Example: by paying off a credit card account before running up more debt

Question 6

Alternative reality apps

Answer 6

Can simulate a customers future life cycle
This can show them the long-term impact of certain products on their credit worthiness, wealth management and readiness for retirement

Question 7

Greater online security

Answer 7

Can be achieved by using artificial intelligence (AI)
To recognise potential fraudsters

AI can be used to understand a customer normal log in behaviour.
This allows the system to block anyone else who tries to log into the product .

Question 8

Demographics of digital banking

Answer 8

Depends on someone’s age, income and educational attainment.

Younger people - use it at a greater extent, use mobile banking and digital wallets

Over the age of 65 - still prefer to visit a branch and receive f2f service.

Question 9

Socioeconomic factors

Answer 9

Affect the take up of digital banking.

Only around 46% of those who are unemployed or in the lowest grade occupations use digital banking.
People with higher income are more likely to use digital banking services

Question 10

Changes in time spent on banking

Answer 10

Banking online or via a mobile app is convenient and saves time.

Can make transactions at any time and anywhere
Gives them more flexibility and free time

Question 11

Opportunities for banks

Answer 11

New technology has enabled this:

1. Popular - growth market un increasing number of people who want to use the latest technology.
   Great advantage of mobile and digital banking for banks
2. Reduction in operational costs - applications and processes are automatic. Remove the need for a large number of employees to effect transactions.
   Probability of error is lower and the cost of rectifying mistakes are reduced

Question 12

Challenged and risks to banks

Answer 12

• difficulty in keeping up
• costs
• security

Question 13

Difficulty in keeping up

Answer 13

Large traditional banks must keep up with the competition they face from digital banking challengers
who are more specialised.

Mobile banking customers often switch banks when they have an experience that is not a tailored to their unique needs.
This could be due to a system that has not been upgraded at the customer facing end and not the back office end
(Finextra 2023)

Question 14

Costs

Answer 14

Bank can save on labour cost by using technological solutions

Cost involved in the continuous development and maintenance of hardware and software and staff training.

Bank also have cost to keep some branches open

Question 15

Security

Answer 15

Bank must prioritise security to prevent hacking and fraud.

This applies to their own systems and they must help their customers to develop good digital security behaviour.

Banks incur costs to build and maintain firewalls and security levels

Question 16

Detrimental effects on some societal groups

Answer 16

Branches closing down will continue.

Negative impact for those who prefer going to branches (f2f service).
Elderly and those who are not good will technology are vulnerable, and if they have low digital/ financial capability.

Some customers do not like speaking to someone on the phone about their finance, disabled people find it difficult to access cash, those would memory difficulties find it hard to use their banking security measures and find it difficult to navigate the website