In an era when companies such as Amazon, Apple and Facebook are setting ever higher standards for online customer experience, we’ve found that UK banks are failing to impress customers in the same way.
Our study ‘Leaders in Financial Services Are Experts in Customer Identity’ carried out by Forrester, compared the UK’s adoption of technology to identify customers against that of the US, Australia, Singapore and China.
Of more than 300 firms across the five countries, the UK lagged behind in aspects of its approach to customer identity and this could be seriously harming its global competitiveness.
Life or death
We found that 84% of financial service firms in the UK are concerned about their ability to identify customers.
Ultimately, we believe they should be investing in new technologies that can speed up the identification process, such as facial recognition, automated data capture and social media data analysis, yet none of these are being widely adopted in the UK.
Both traditional banks and fintechs around the world are far outspending our firms on the digital customer experience.
This is a major issue underlined by the Forrester research, which stated that: “Financial service firms will live (or die) by delighting customers via digital channels.”
Customers expect more
One thing we all know is that customer expectations are constantly rising. The likes of the iPhone X mean that many people use facial recognition every day, and this technology – along with automated electronic document capture – is familiar in every airport. In this digitally sophisticated world, it seems particularly clunky and outdated to have to visit a branch and produce a hard copy of an identity document before you can open an account, or to have to wait hours or even days for a decision to be made.
Prioritising cost control
So why are UK firms being so cautious? Perhaps because of the major regulatory changes this year – including Open Banking and GDPR – as well as planning for the implications of the ongoing Brexit negotiations. We know there are numerous competing priorities for UK financial service firms. Whatever the reason, our report shows that they are more focused on cost control than their global counterparts.
To thrive, though, UK financial service firms need to engage rather than enrage, and provide online customers with services that exceed their expectations. This means addressing the clear gap between their approach to adopting new technology and that of their global rivals.
A brighter future
Now for the good news. Although the UK is currently behind the rest of the world in its digital approach to customer identity, there are promising signs. Our research shows that UK fintechs are more interested than the established banks in adopting new approaches. Many are planning to increase investment in the next 12 months.
So, as we navigate a tricky year of legislation and policy change, these new challenger banks can play a vital role in helping the UK financial services sector to catch up with the rest of the world.
For more information on our report conducted with Forrester, visit www.idiq2018.com.
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