In any business, the basic rule is simple – how you provide your service dictates how satisfied the customers would be. Is the transaction fast? Are the requirements easy to acquire? Or the is process too complex?
In the current financial market, many companies have already transitioned their processes to a more modernized and digitized way to better cater their customers.
Applying for a bank loan? Of course, you would expect to know whether it was approved or not immediately.
Getting a new credit card? You would want to receive updates in real-time.
Financial companies are now expected to provide every detail in the palm of your hand – transaction records, purchase statuses, and historical summaries should be instantly accessible.
Most financial transactions are now digital for customers, but the supporting procedures pose vast room for optimization. The underlying processes involved in these transactions are usually still manual which are most likely negatively impact the end-to-end experience of the consumers.
This exact thing is the ultimate challenge for most companies who have relied on traditional practices and are now trying to evolve their processes. It involves great pressure created by the demand for a more digital experience in order to compete.
To be able to keep pace in the competition, financial institutions should take a look into the “paradox” of modernizing their rigid traditional processes.
Digital KYC: Might be a Double-Edged Sword
Since the birth of FinTech, the market has rapidly transitioned to digitalized processes in providing services to the consumers. This caused over-the-roof expectations from the public when it comes to financial services. At the forefront, you can say that these digital solutions are seamless.
However, the underlying steps and procedures involved are still, in most cases, manual.
For most complex processes, there are most likely supporting procedures that are being manually completed at the back end. These pose a disjointed end-to-end user experience leading to customer dissatisfaction.
Normally, companies rely on technology solutions when it comes to process improvements. This commonly involved automation which include applications that are supposed to manage data and step-by-step processes from a manual to a digital form.
These type of streamlining come as project initiatives with a team as oversight to the overall transition, matching and mapping, lots of testing and loads of meetings, just to improve a single process. These, of course, usually require resources and huge efforts.
You might think that these kinds of projects should greatly lessen manual tasks and the overall workforce needed. However, it’s the opposite that usually happens. In most cases, tool improvements have led to an increase in the human workforce.
Humans are usually not eliminated, but rather, given new tasks that relate to the connection of the manual and digital procedures. These tasks usually include compliance checks and are usually more complex, hence, need more staff. One example of this is the bank giant ABN Amro which has previously shown a great increase in its compliance workforce. In 2013, they have around 1,000 staffs. Come 2019, the number skyrocketed by thrice of this.
It is undeniable that digital automation give companies the opportunity to re-engineer their processes, with the aim of providing much smoother services to the customers.
However, if not done right, digitalization could be a double-edged sword. Aside from the fact that it would most likely increase cost, manual complex processes could also lead to an increase in waiting time and longer retention, leading to unsatisfied customers.
Recalibrate and Break the Paradox
To ensure that a process change would likely provide benefits to the company and drive customer satisfaction, businesses should start with a thorough assessment of all manual steps involved in a specific process. With this, it could be determined whether that certain process could potentially be transformed to drive a positive impact.
The first thing you can consider is to assess whether that specific activity could be completely removed. Take a look into its essence and identify if it is really necessary or is it something you can streamline or better, eliminate.
If not, further analyze and ask the question, is it something that can be automated?
There are many existing technologies that do not require advanced knowledge in programming. You can leverage no-code applications involving machine learning and data processing that once developed, do not need any manual intervention.
With these no-code platforms, you can instil technical capabilities to your staff even though they do not have a great foundation in IT. This could potentially lead to creating a work environment that highly promotes and values digitization.
By performing proper examinations to the company’s day-to-day practices, businesses would be able to transform complex tasks and procedures into highly efficient processes.
Appropriate streamlining and automation could help break the potential of digital processes in creating unsatisfactory services, and instead provide a better end-to-end user experience.