Our recent report Bank to the Future explored the many ways in which banks are responding (or not responding) to the digital challenge. The message that comes through loud and clear is that business customers increasingly expect banking to be a digital first experience and banks increasingly need to deliver this, if they are to remain competitive in an increasingly digital economy.
Banks know this and 25 percent of banking executives we surveyed indicated that they are extremely concerned about losing SMB market share to digital payments providers while 30 percent are extremely concerned about losing SMB market share to tech giants like Apple and Meta.
Banks recognise the challenge and know they need to act. 36 percent of executives we spoke to for our research foresee a 10 percent plus increase in budget to compete with fintechs. The problem for banks however, is knowing how to respond. Just 11 percent of bank executives we spoke with feel confident that their bank is using data to improve the customer experience effectively, 8 percent feel confident about the delivery of UX. Banks understand the ways data can improve experience for SMB customers, but are unsure of where they should focus. Just 16 percent of those we spoke to are prioritising providing SMBs with data related to business management while 18 percent of executives see a significant role for their bank in providing data that can grow end customers and 18 percent see a role in providing data that can help grow a customers business. This indicates a lack of surety on the part of those we’ve surveyed, they see how data and insights can help their SMB customers, and see a role for banks in providing this, but are not sure what that role looks like yet. Nevertheless, the willingness to adapt and crucially to invest in meeting this challenge is there. The scale of AI investment from the banking sector is matched only by the scale of global investment in AI driven fintech (estimated at $100 billion since 2010). What will be key to banks fortunes is making sure they invest effectively.
At Pollinate, we’ve made it our business to give banks the tools they need to meet the digital challenge and give business customers the experience they expect, while capitalising on the natural advantages that institutional finance still has. These advantages are many, including brand recognition and trust and financial security. Crucially too, banks process huge volumes of data which, properly leveraged, can give them a competitive advantage. Having the data and using it properly however, are two different things.
Using existing data well will be key to banks success in delivering better, and more intelligent user experience. This means unlocking the efficiencies that make the customer experience smoother, through simple measures like eliminating duplicated information requests and using data to develop a more holistic view of the customer lifecycle, so the right products and services can be offered at the right time.
So, where should banks start?
Data alone is just bytes. A Kindle might contain the complete works of Shakespeare, but it takes an intelligent mind to look at the data (Shakespeare), unlock its meaning and integrate it. And it's the same in business.
In an age where data is often described as the ‘new oil’, it can feel as though just gathering business customer data is enough. The truth is however that to succeed businesses need to know how to use that data, and how to apply it with intelligence to real-world problems. And in banking, there are many of these problems that can benefit from the intelligent use of data. Broken customer journeys; loss of customer engagement; lack of personalisation; the constraints imposed by legacy systems; poor CX. The list goes on.
It’s around these crucial points that a good business customer experience is increasingly defined, and where competition from digital first finance businesses is fiercest. So, to compete, banks need to get smart in approaching these problems.
By focusing on building the tools necessary to intelligently apply data to solving these problems, Pollinate is working to build a banking sector fit for the twenty-first century.
Business in the twenty-first century crosses many borders. This includes international borders, where regulation in one jurisdiction might differ from another. It also includes different software borders, where one set of business customers might use one payment platform, while another set uses a different one. All of these will mean different software solutions need to be able to be plugged in and swapped out of a banking platform effortlessly.
By being able to integrate as many solutions as possible, a banking platform can ensure that as many potential business customers as possible can be onboarded and worked with as possible. In an increasingly digital economy, integration is more important than ever and this is especially true in the world of finance. Business customers want to feel confident, want to be able to offer their own customers a smooth and reliable service and want to be able to plug in the best and latest tools that make business easier.
Pollinate’s platform offers banks a toolkit for enabling integration of third party tech solutions, independent software vendors and cross-bank products. This allows banks to go straight to the cutting edge of technology, and to offer that to their merchant accounts. It also generates right data and insights that empower banks to unlock revenue beyond payments.
Why did we build these tools? It’s all about experience. As mentioned above, data alone isn’t enough. It needs to be applied intelligently but also applied in a way which unlocks experience, anticipates the needs of business customers and drives engagement and satisfaction that will in turn drive revenue and customer loyalty.
Research suggests that more than 80% of customers are less likely to engage a brand or business with bad UX. For banks, this is a crucial thing to get right. While banks have many natural advantages when it comes to competing with digital first finance, the payment platforms and tech companies have an advantage when it comes to UX. Digital first finance is built around UX for an audience of digital natives. This cohort has never known anything different, and so UX may well come more naturally to payment platforms and fintechs than it does to mainstream banks which were born in the analogue age.
With today’s business customers putting such a high value on UX however, this is a challenge that the banking sector is going to need to rise to.
It’s with this in mind that our team has couched all of the tools we’ve built to aid integration and intelligence within portals designed with experience in mind. Our platform is also based around a toolkit that helps our partners accelerate front end design and aim for continuous improvement to deliver the UX that business customers increasingly expect. In a world of tech unicorns and white label fintech, banks struggle to attract UX talent, which is attracted to a level of dynamism and creativity which banks, by their nature, cannot offer. So, banks need to partner with design led experts who can deliver cutting edge experience. An experience which seamlessly brings together the myriad parts of the puzzle and presents business customers with a simple, clean and easy to use portal which is easily deployed and easy to iterate.
By digitizing the banking experience and delivering the UX that today’s customers expect, fintech has become big business, with worldwide investment into the sector growing from $61.1 billion in 2015 to $238.9 billion in 2021. This lays down a gauntlet for the banking sector. Investing in tech alone is only part of the solution. The response of the banking sector to the digital challenge has to be intelligent, integrated and experience driven.
The banking sector has a unique opportunity to capitalize on the natural advantages it has, while also teaming up with tech partners who can deliver intelligence, integration and customer experience quickly and at scale. It’s about more than tech though, it’s also about a change in the way banks think about business customers and the services they offer. There can be no more thinking within silos. The Pollinate platform is built to achieve just this. By bringing products, business customers, bespoke tools and all parts of a bank together in one platform, into one experience we are building the banks that the future demands.
For business banking customers, this means the tech and UX they need, plus the trust and security of a well-established bank and this is what will give the sector the edge in the ongoing contest for market share in a digital world.
