Rethinking the Customer Experience: Themes from the 2017 Model Bank Submissions

This is the third article in a weekly series highlighting trends and themes from Celent’s Model Bank submission process. Dan Latimore and Zil Bareisis led off with two great pieces on the evolution of the Model Bank Awards. Articles from this week on will explore some of the broader themes within each category. Customer experience initiatives are typically the most numerous. While this makes the category more difficult to judge, it offers immense insight into what’s happening in the market. The standards of customer engagement are constantly changing, and banks are experimenting with new ways to drive increased satisfaction, higher revenue, and greater loyalty. Three themes stand out this year. Digital banking subsidiaries: Many banks are finding that existing systems are too rigid to accommodate a truly digital experience. A number of customer experience submissions this year focus on building out separate digital subsidiary brands within traditional institutions. Banks are typically going in two different directions. The first is a digital subsidiary as an offshoot of the parent bank. These brands are basically separate products that offer a digital-first experience to a certain demographic, but are closely tied to the main bank. Brands are similar and products/ services are frequently cross-sold. The second type is a completely separate brand ring-fenced under a different technology stack, operating under the umbrella of the parent organization but effectively a separate entity. These banks may leverage the parent for product support, but are usually sandboxes for “testing” digital. Submissions were a mix of the two approaches. Fintech partnerships: The shift from disruptive to collaborative relationships between financial services and Fintech startups feature prominently in this year’s award submissions. They range from standard B2B vendor relationships to more advanced functional partnerships where portions of the Fintech’s offering is exposed within the traditional institutions digital UI. Initiatives reflect the growing acceptance among the industry that banks can’t be all things to all people. Institutions are acknowledging the valuable and complementary role Fintech can play in providing a modern, innovative customer experience. AI and bot technology: Bursting out of the gate in 2015/16, Banks have begun a mad dash towards AI and other bot technologies. This is a broad spectrum of projects that include everything from simple bots to cognitive computing. Submissions this year show institutions spreading their resources across many different applications. Like any emerging technology, most institutions are in a “test and learn” phase. These technologies are at varying levels of maturity, but the potential to revolutionize the customer experience through AI may be truly transformational, and Celent was pleased to see so many projects in this space. This is just a taste of what we’ll have in store at the 10^th annual Innovation and Insight Day on April 4^th in Boston. We’ll be diving much deeper into the various topics, revealing the winners of all the awards, and discussing how they combined serious innovation with tangible business benefits to stand out from so many strong contenders. I look forward to seeing you all there.