Digitally transforming a bank's customer touchpoints

Digital transformation is all about using information technology to radically change the ways we live and do business. This second of a two-part blog post looks at how a local bank, here called the red-ties-and-black-suits (RTBS), took on the steps related to customer touchpoints, adjusting its digital strategy to meet shifting needs.

The RTBS started pushing ahead with what it called “realignment” in 2012. A digital strategy, developed in 2015, was a key part of that realignment. Its goal was clear: to advance its business model, to make the required investments to secure tomorrow’s earnings, to meet emerging customer needs and to “identify the best courses of action provided by digitalization”.

1. Test, iterate, and be prepared to change course

In 2015, the RTBS was among the first to launch a crowdfunding platform. In October 2016, it started an online marketplace for small and medium-sized enterprises (SMEs), as a joint venture with a startup company, which provides pre-financing of outstanding customer invoices.

In 2017, there were circulating but unconfirmed news reports that the crowdfunding platform would close. The apparent reason that the platform didn’t take off as well was that the criteria for SMEs looking for credit was too tightly and strictly defined.

However, in November 2017, the bank re-adjusted and replaced the platform with a “crowd-supporting” solution to support societal and environmental projects and start-ups. It also transferred part of its sponsoring budget into this digital initiative.

2. Invest in content

The RTBS redesigned and re-positioned its blog and uses it as the centerpiece of its social media strategy. The blog pulls together insights from internal and external contributors who share their expertise with the community, on topics ranging from buying real estate and servicing home loans to financing renovations and promoting environment sustainability.

The bank also uses digital signage at its branches, with moving images in its customer zones. These are designed to shorten waiting time and also to promote events and services. All these content efforts build on the bank’s image and enhance the way it is perceived by customers.

3. Cover all customer touchpoints

While you might think that going digital leads to closing down physical locations, the bank branch continues to play a central role for the RTBS as a meeting and consulting place with customers and one of its main distribution channels.

Customer needs change constantly and they change even faster in the digital world. Since 2011, counter transactions have declined by 30%. At the same time, demand for consulting services has doubled. The RTBS adapted its sales points in terms of the look-and-feel and what they offer. Jobs roles are also changing. Customer service consultants are gradually replacing classic bank tellers in a 3:1 ratio. The bank’s main call center handles about 1,300 customer calls each day, from 7am to 7pm, beyond the previous opening times.

“The significance of cash transactions at the counter is fading whereas the customer’s experience of advice and products as offered by the branches gains in importance. Analyses of customer behavior show that the diversity of contact - starting from the branch to the self-service at the mobile bank - is very important to our clients. They expect to be able to get in touch with us by means of various channels so as to get their request dealt with.”

4. Differentiate the touchpoints

Going digital sometimes means reinventing the physical. The RTBS embarked in March 2017 on a new branch concept and rebuilding its branches. This should be completed by 2021 to the cost of a two-digit million figure, estimated at 30-40 million. Its current 23 branches across the canton, more or less unified and heterogeneous, would be diversified. One branch was closed in September 2017, 18 branches would be turned into consulting banks and four would become self-service banks.

Following local reactions to the branch that was closed, the bank started a pilot trial: a mobile bank would visit the community twice a week and the bank would decide in late 2018 if this offer would be continued.

With that, the RTBS revived its mobile banking trucks, a concept started 10 years ago, in a streamlined form. Customer research showed that the trucks would be welcome. With the newer, smaller trucks, the RTBS can be present at local events and festivals. The trucks are equipped with ATMs and come with a furnished customer zone.

Digital transformation, as the RTBS has done, means integrating digital technology into all areas of a business, fundamentally changing how you operate and deliver value to customers. On one side, it calls for changing cultures and mindsets. On the other, it requires a solid content management architecture, with the right tools in place to handle integrations with legacy systems, while keeping open the flexibility to connect future systems.

The first of this two-part blog post looked at steps related to products and operations.

Magnolia will be at Forrester’s Digital Transformation Europe from June 14 to 15 in London, UK and will give a talk on how its customers master DX challenges through integrating legacy technology, removing silos and building agile platforms and processes.