Technology is empowering customers like never before – we can now access information almost anytime and anywhere in the world, compare the offers and make educated choices based on hard data. With bigger awareness come higher expectations – it is not enough today to have a simply good product, you need to undestand your customer and their experience with it. Being able to improve customers’ journey from the moment they learn about the product, through purchase and further, is today’s must have. And not only retail businesses understand it. Banking sector is definately the one to watch regarding the way they approach customer experience and work with startups to improve their relationship with their clients.
We asked Jakub Grzechnik, Director of the Mobile and Internet Banking Center at PKO Bank Polski – the biggest bank in Central and Eastern Europe, how banks can cooperate with startups and introduce into their operations solutions traditionally not associated with banks’ core activity.
What are the factors that shape the customer experience in the bank?
There is a number of elements that influence the customer experience. Firstly, how is the customer handled in traditional bank branches – it can be as simple as whether it is clean and nice there, or if there are no queues. Secondly, self-service channels, i.e. mobile, internet and call centers. There, the customer’s opinion is influenced by such factors as the way we activate or recover a password for an account. And then there are the products themselves – starting from rules being understandable, through prices, and finally – the formalities related to a given product.
Is there a space for banks to work with fintech startups in these areas?
Most certainly, and not only with fintechs. We used to look for solutions in areas traditionally associated with banking, such as payments, but then it turned out that there were many less obvious areas, where bank could implement startup solutions.
What areas would that be?
The most important are the technologies that support establishing a relationship with the customer – signing of an agreement, verification of their identity, biometrics. We would like to be able to sign an agreement without the customer having to visit the branch. That is why we need to have solutions that will allow us to verify the customer, to check if they are not present on a lists of money laundering entities.
The second area is product innovations, which have an added value for the customer. For example, we are presently introducing solution of a startup called NuDelta – it allows scanning invoices and generating payments based on the scanned data. Theoretically, we could have created a similar tool from the ground up, but it was better to find a company on the market that already had one and integrate it into our system.
Why does the bank want to introduce this type of innovations?
Because we want to provide the best service to our customers. Therefore, we are looking for services that are not traditional banking products but will give the customers something extra. And since these are unusual things for a bank to do, it is better to find a company that has already developed such a thing and start cooperating with it rather than to create something from scratch.
There are plenty of these kind of ideas on the market, how you decide that it is a good fit for the bank?
It often happens that the idea is good, but it does not fit the banking reality. Now there are many projects that assume that the customer logs into the banking application via Facebook. It may be convenient for the customer, but it is not adapted to the banking reality. We as a bank cannot accept that someone on Facebook is known as John Doe, this cannot be an element of verification. We need more reliable mechanisms to confirm customer identity. Other example are solutions that rely on exporting data beyond banking systems and keeping them in a cloud. This is also very problematic.
Maybe the bank should be more flexible?
Banks operate in a regulated environment. There is a number of institutions whose intent is to keep all procedures in banks compliant with their guidelines, they are usually very conservative and prefer to rather be safe than sorry. But startups also make a mistake when they think of their idea as a specialized application that has only one purpose, i.e. to send money, to issue invoices, or to order food from a restaurant.
Such approach sounds reasonable, why it is a mistake?
It is reasonable from a startup perspective, but not necessarily from our perspective. The bank does not want to give the customers 15 different services, but it rather wants to give them as much functionality in one application as possible. If a new tool cannot be implemented as part of a larger whole, it is difficult to implement in practice.
Doesn’t the bank limit itself this way?
Sometimes we ask this question ourselves. Some things are worth implementing outside our banking ecosystem, but we adopt many of the functionalities from startups to enrich the offer for the customer in our own application. If, for example, we add the functionality of paying for parking to our mobile application, it is not to establish the bank in the parking market, but rather for the customer to open our application more often.
Will they not forget that this is a banking application?
No worries. We observe how our customers use our tools. A statistical customer opens the application on average once every two days. They usually check their account balance or make transfers. There is no threat of our customers forgetting that it is a bank application connected to their money.