13 minute read
The new brand of personalisation that’s shaping Citi’s digital banking journey
INTERVIEW The new brand of personalisation that’s shaping Citi’s digital banking journey
Customers want options, but curate it–don’t just offer it, says Citibank’s Nilesh Kumar.
The word personalisation gets thrown around a lot when it comes to digital banking. With 80% of their customers logging into their applications monthly, Citibank knows only too well about these expectations: a customer experience-centred banking journey, right at their fingertips.
But walking the tightrope between personalisation and creating a seamless banking experience is no easy feat, and banks run the risk of “over-personalising” their offerings to the point that the service takes a full 180 turn and appears impersonal.
“Just because you have a service, don’t just offer it all to them, curate it,” Nilesh Kumar, digital channels and experience head of Citibank Singapore, told Asian Banking & Finance. “The customer wants to see all the options upfront. They don’t want banks or any institution to make decisions for them and show them only one option. “Give me the choices and I will make the decision” is what the customer’s preferences are now.”
This is different from the past, when banking interaction consisted of customers focused on completing one specific task.
“They’ll come with a very specific task and complete it, that’s what the banking interaction was. Now it’s changed. I would say that expectations have increased,” Kumar recalls.
Now, it’s all about having options. But curating the right set of options to offer the customer is not as simple as it sounds–especially with financial institutions still attuned to old ways of thinking.
Focus on the individual
One notable pitfall that banks and financial service providers often fall into, Kumar said, is treating customers as part of a larger segment–whether they are a particular demographic, a particular risk profile, or a particular customer belonging to a bucket based on your assets under management or AUM.
Kumar said that this no longer works because customers nowadays have distinct behaviors. For example, he notes two investors of similar demographics, with similar AUMs and risk profiles.
“If we talk about our earlier banking, then we would just send them a similar offer. But if you look at them as an individual, especially in a market up or down situation, they will behave differently. One’s outlook to money can be different from their neighbor’s,” Kumar said, adding that one may engage in panic selling whilst the other may choose to top up on stocks during a market downturn, for example.
This is why data analysis is now central to Citi’s operations. Citi sends their customers outlooks based on where the market may be going in the future, which in turn is based on data from the bank’s own analysts as well as industry analysis available.
“With this, the customer can make an informed decision: should they top it up, or sell it out and maybe enter again. So having that data for the customer, giving them the right information and sending it using the right channel–that’s
Banks run the risk of “over-personalising” their offerings to the point that the service appears impersonal (Photo: Nilesh Kumar, Digital Channels and Experience Head, Citibank Singapore) what personalisation means. You’re treated as an individual and not a bucket of customers.,” Kumar said. Apart from personalisation, speed is another factor that customers seek in their digital banking experience. Speed, according to Kumar, is not just about how fast your web page or app is loading, but rather operational efficiency. This refers to ease of access to contextual information and channel performance. As an example, Kumar notes of a scenario in which a relationship needs to have a pertinent document signed by a customer. “Earlier, if you wanted to get a document signed, either an RM would book time with the customer, or give the customer a schedule to come to the branch. Now we have virtual banking. An RM can simply initiate a video call with the customer, share the screen, share the document, and then walk through all the discussions and advice the customer needs. Once all those things are done, the document can be sent digitally and customers can simply use their mobile app to authorise and digitally sign it.”
Constant self-improvement
“Give me the In order to further transform their customer experience choices and I journeys, Citi has further implemented services that will make the allow them to gauge the effectiveness of both current and decision” is what soon-to-be added features, not just from customers but the customer’s also from their staff. preferences are Kumar shared a special feature in their staff’s mobile app now called “tell us.” The feature enables staff to share any glitches
they may have experienced in the app. It also lets them share any new ideas they may have gotten or come across whilst helping customers.
“That becomes a database for us to say, okay, these are the things that I can do, or the next iteration of experience improvement can be done so we can become empathetic to customers,” Kumar said.
Citi also constantly retrieves journeys via data labs, he added. They do this by conducting “test and learn” sessions with both their staff and their customers. “We get them into a session and ask them to test and learn existing journeys. We give them specific tasks like add this, do a transfer. Once a task is given, we’ll observe their behavior. We will document their experience and all this will give us an idea of what can be done better for improving the customer experience,” Kumar shared.
Agility and empathy
More than anything, it’s the mindset of being open to innovation that empowers banks, amongst them Citi, to excel even at the face of rapid changes.
Asked on his thoughts about the debut of digital banks in Singapore and across APAC, and whether he considers them a threat, Kumar’s response was a resounding “no.”
“They are actually welcome because they will foster the pace of innovation,” he said.
As for what customers can look forward to seeing from Citi in the future? Expect more refined customer experience centred on empathy, Kumar said.
They will also continue to work on hyperpersonalisation. Kumar cites money transfer as an example.
Citi would use past client data–such as when they usually make the transfer, as well as what denominations of currency they deal with–and inform customers at points when the prices of exchange will be most favorable to them.
“If the prices are better on the fifth of this month, we can send a polite message to the customer to say okay, the rates are best at this point, why don’t you utilise this opportunity and keep it ready for when you want to transfer in the future. So, if I quote it as a bank service, rather than focusing on just customer satisfaction, we are working on long term customer delight,” Kumar explained.
Speed is another factor that customers seek in their digital banking experience (Photo from CitiGroup.com)
ANALYSIS: METAVERSE The future of banking could lie in the metaverse
Virtual reality may be the answer to more digitally optimised financial services without having to sacrifice personalisation.
The future of banking may just lie within the comforts of your home whilst you transport yourself into a digital world and your digital self discusses finance with your banking assistant. At least, that’s what banks are betting on as they head into the metaverse.
Global lenders–amongst them big names such as J.P. Morgan and Standard Chartered– have been reportedly snapping up virtual land on which to lay the seeds of their burgeoning digital empires, as they seek to explore how this up-and-coming digital platform may better serve their increasingly tech-savvy customers.
“We have seen an uptick in interest amongst banks, primarily driven by their internal innovation incubators,” Capco’s Paul Sommerin, Partner and Digital, Data and Technology Leader; and Leo Leung, Principal Consultant and Head of Innovation APAC, told Asian Banking & Finance
The focus is on how banks can engage with a younger and more tech-savvy consumer
Nicole Bodack
via written correspondence. “The focus at the moment is on how banks can engage with a younger and more tech-savvy consumer in the future and this is one potential avenue to reach them.”
In Asia, banks have already started exploring the metaverse. KB Kookmin Bank, one of the biggest financial institutions in South Korea, has already created a virtual town with a virtual bank where customers can access personalised financial information and interact one-onone with its financial advisors using virtual reality (VR).
In Singapore, J.P. Morgan has unveiled its Onyx lounge in the metaverse, which facilitates cross-border payments, foreign exchange, financial assets creation, trading and safekeeping in the metaverse. DBS also recently bought a 3x3 virtual land in The Sandbox, a decentralised virtual game environment built on Ethereum, for
Metaverse conceptually can be an immersive front-end to the world of web3.0 its planned DBS BetterWorld project.
The sudden spate of metaverse ventures amongst banks indicates that there is much excitement amongst the lenders in exploring the transformational potential of technology, even when its final form may still be hard to imagine, said Nicole Bodack, Managing Director of Capital Markets, Growth Markets, for Accenture.
“Banks should be prepared to observe a similar trajectory to mobile banking which took five years to fully diffuse into banking. As we go beyond 2D to 3D, we can design an expansive universe with the ability to immerse customers,” Bodack said.
Experience design
The banking world’s progression from 2D and 3D precisely explains how it has arrived to the point where the metaverse is considered a probable banking platform.
“If we think back on banking services up until the 80s, they were analogue-driven. The business model was focused on face-to-face human interaction, building trust and rapport with customers at a physical branch. Fast forward to the present time, the focus has shifted from ATMs to online to digital banking, steered towards increasing distribution and reducing friction,” said Sommerin and Leung.
One downside of the shift to digital, however, is that it came at the expense of side-lining human interactions, replacing them instead with services such as chatbots or automatic replies. This impersonalisation is severely affecting an increasingly important factor in delivering a satisfying banking journey: customer experience.
Metaverse could bridge this gap, according to analysts.
“Simply put, metaverse conceptually can be an immersive front-end to the world of web3.0. It offers a unique opportunity for banks to experiment, bringing back the long-neglected human interactions. With data analytics and service design, financial institutions should be able to offer immersive hyper-personalisation to rebuild and strengthen customer relationships and lifetime value in this nascent
virtual channel,” explained Sommerin and Leung.
Accenture’s Bodack shared the same sentiment. “In the hyperconnected world we live in today, we are still disconnected in many ways. Take banking, for example. Whilst it is functionally complete, most interactions feel transactional,” she noted, adding that a customer could have a more engaging experience with a service representative or advisor represented by a realistic avatar than with a flat screen of a chat application or even a video call.
“Within such a metaverse, banks can bring together people, spaces and objects in both the virtual and real worlds, and evoke a sense of community amongst its customers. Banks can add a third dimension and a sense of human presence to digital banking experiences to bring a more personal touch to remote and virtual customer interactions,” Bodack said.
She added that the metaverse creates an alternative path to embark on the exploratory journey to redefine the financial services experience - specifically targeting millennial and Gen Z consumers.
“Banks can also introduce new products and services by tapping on the metaverse’s burgeoning economy to extend their brands by insuring and lending against digital assets including cryptocurrency, NFTs and virtual real estate,” she said.
Hurdles
Being still in its infancy stage is what gives the metaverse its potential, but it also means that companies–and in particular, banks–wishing to explore the space have a lot of challenges to contend with. Chief amongst these are banks’ own tech. “To achieve progress in partially or fully institutionalising this realm, and to ensure the safety of banking activities, banks and financial institutions will need to upgrade their current technology platforms or partner with fintech players to prepare for the foreseeable future. Large global financial institutions running on legacy platforms will have the most to lose if they don’t upgrade their core platforms and decide to ignore the potential disruptions these emerging technologies could bring,” Leung and Sommerin warned.
Bodack also noted that investors and customers may perceive buying land in Decentraland as volatile and expensive.
Another risk to consider is that of reputation. “For the metaverse, it is quite similar to social media or interactions in the real world. Metaverses may expose brands, including banks, to a range of reputational and legal risks. The nature or extent of these risks might be difficult to anticipate at this early stage as the metaverse is a fairly new concept for banks,” Bodack said.
Bodack advised banks venturing into the space to consider issues that already exist in the real world and how they would handle them in the metaverse. These include issues of abuse and harassment on the internet, money laundering and fraud, and privacy and data risks.
“This is a defining moment for banks. The concerns regulators and consumers already hold today around privacy, bias, fairness, and the human impact of digital platforms will become more acute as the metaverse further blurs the line between people’s physical and digital lives,” the Accenture expert said.
Crypto volatilty
Another factor to consider is that of crypto assets, which is an integral part of most metaverses. The Sandbox, for example, with whom both DBS and Standard Chartered have recently partnered for their first foray into the metaverse, is built on the Ethereum blockchain.
“The widespread adoption of crypto assets in a fully developed metaverse may pose a systemic risk to financial stability. The larger the volume of crypto transactions happening, the larger the potential impact to real-world financial stability if prices were to collapse,” Bodack said.
In an open metaverse, the more the platform grows, the more risks from crypto assets are likely to scale against systemic financial stability, she warned. “Hence, it is critical for regulators to address risks from crypto assets’ use in the metaverse before they reach systemic status.”
Ultimately, it’s up to the banks to balance risk with reward, and take careful steps to ensure stability whilst positioning itself to be at the front once the benefits of the metaverse roll in.
“The metaverse is fast approaching with existing and future utilities. Look no further than to the series of metaverse patents and trademark filings, made by some of the world’s leading payment processing providers, as testament to the strategic potential firms now see in “metaverse commerce’, ” Leung and Sommerin said.
And as XR technologies converge with traditional services, and the pace of integration and adoption increases, Capco expects metaverse commerce as a revenue stream for firms will take off and experience exponential growth.
“This all points to why financial institutions need to consider the metaverse in their omnichannel strategies moving forward,” the analysts concluded.
The metaverse will significantly impact our commercial and personal lives
Source: McKinsey & Co.
