The power of CX: Helping banks redefine their role in society

Consumers have come to expect more from banks. With their needs changing and values growing, banks must reconstruct alongside them with a customer-first approach. Organisational rigidity and resistance to change are stifling growth. Monolithic banks must transition into modern financial players with a digital first approach, enabled by a flexible, independent banking infrastructure if they want to stay relevant. They must become “Evolvers“.

Evolvers place consumers at the heart of their approach

According to a joint research study “Evolve or be Extinct” by Mambu and the Financial Times (FT), the banking industry is in dire need of a makeover. The findings show that 58% of banks believe they will cease to exist in the next five years if they fail to change their business model.

The time to act is now.

The Evolver: a role model

Evolvers are fintechs, challenger banks, and forward-thinking traditional players harnessing technology to provide better financial experiences. This means placing consumers at the heart of their approach, layering their business model with agile offerings and progressive social purposes. A modern bank is one that pays attention to its customer values and adapts its services accordingly.

The problem is legacy banks can’t do it all themselves. A third of banks are unable to deploy updated or new products at speed and lack qualified employees with the skill sets needed to operate new technology. Well over a third also don’t have the appropriate systems to support new workforce models. This explains why two fifths of senior executives intend to modernise their platform, but plan on doing so through third-party providers.

This is where the Evolvers race ahead. For example, by working with fintech partners to help them quickly respond to consumer demand, Evolvers are able to harness cloud-based platforms to deploy flexible financial products and achieve a seamless transition to digital.

Transformation starts with a customer-first mindset

But to become an Evolver, banks must first reflect on their own mentalities. After a turbulent 18 months for the global economy, consumers are increasingly seeking more control over their finances, and want banks to support them with the tools and services that can help during challenging times.

Evolving banks are doing exactly that, positioning themselves as “lifestyle partners” able to provide accessible financial products that are customer-centric and offer users a 360-degree view of their financial lives. This is crucial in a post-pandemic world and illustrates why nearly half of Evolvers rank the customer experience as their top digitisation priority.

Eelco Jan Boonstra, Mambu: “Evolvers put people over profits”

As a result, they are able to identify new customer opportunities and deliver highly relevant products and services at the right moments. Consumers enjoy these sorts of financial offerings as Mambu’s report indicates that Evolvers see 24% stronger engagement levels compared to traditional banks. From a bank perspective, the internal and external flexibility customer-centric business models offer translates into greater customer turnover and larger assets under management (AUM).

People over profits

Evolvers put people over profits and focus on facilitating key growth drivers that matter to consumers, such as environmental, social and governance (ESG) and a best-in-class customer experience.

This people-first approach marks a shift in how banks operate. Mambu’s report shows that profits have slipped down the priority list for banks, as “increased revenues” was identified as only the fifth most important factor when adopting a consumer-oriented model.

Likewise, 81% of retail banking leaders strongly agree that replacing outdated mindsets with a progressive social purpose is vital to growth strategy. This reflects the growing importance of a value-led proposition among the next generation of banking users and the pressure on banks to lead from the front on key social issues.

Bringing it all together

With more than half of the banking leaders surveyed believing they will cease to exist completely if they fail to embrace a new business model, the time for banks to take a customer-centric approach is now. The key to this will be the ability to offer intertwined services that are seamlessly integrated under one roof.

It is this interoperability that banks must adopt to fend off growing competition from technology giants, such as Google and Amazon, as well as stay one step ahead of new market entrants. Failing to do so will leave traditional banks on the sidelines as forward-thinking players surge ahead in the battle for the customer.

Financial Evolvers are role models for the industry as champions of the customer experience, and leaders for their progressive mindset to become more than a bank. It is this train of thought that will drive the industry forward in the years to come; those who hold onto their legacies will be left behind.

By Eelco Jan Boonstra, Managing Director EMEA, Mambu