New responses to customers
Digital transformation and new consumer behaviors demand changes in the management models of financial institutions, which have adapted their service structures and have sought new professional profiles to meet the requirements that the moment imposesDecember 2019 | February 2020
Organizational cultures have been reviewed by business leaders because of new market trends driven by digital transformation and changing consumer profiles and habits. In the services area, including financial services, the radical transition that consumption and customer services relationships go through requires significant adaptations of both management and business models.
“Customer expectations have changed at a very rapid rate in the last years, and this is directly linked to the use of new technologies. Today, the way we consume financial services and products is entirely different from what we knew a few years ago”, explains Sergio Biagini, Deloitte’s lead partner for the Financial Services industry. “Companies need to adapt to this new reality, which brings a new and higher standard of experience that is delivered to clients”, he adds.
In this sense, a question arises: what should companies do to adapt consolidated processes, which had been working correctly, to the new market trends driven by digital transformation?
Marco Mastroeni, vice-president of Innovation at Banco ABC Brasil, suggests something that may seem radical: “My first reaction when confronted with this question was to think that we had to throw it all away – I couldn’t make the mistake of thinking it was all right. You always have to question the status quo because your process could die tomorrow because a fintech invented a much better way to do what you always did. No process is really consolidated, and they all have to be questioned on a daily basis.”
Pondering his own point, Mastroeni adds: “Obviously, you can’t throw it all away, but a characteristic of current times, regardless of the size of the institution, is the speed of adaptation. The changes will happen, as they always have, but much faster. The answer to this new reality is what will make an organization survive.”
The customer is in charge
In fact, the speed with which transformations have been occurring is considerable. According to “Febraban Banking Technology Survey 2019”, conducted by Deloitte, the number of bank financial transactions – that is, those where there is an exchange of funds between individuals or companies – grew 33% in 2018, compared to 2017. When considering the mobile banking channel (smartphone applications), the increase in the number of these transactions was 80%. Given these results, Gustavo Fosse, director of Technology and Banking Automation at Febraban, says that the challenge for banks “will be to anticipate customer needs and create products to meet these demands.”
In order to do this, one needs to go beyond the basic package of offerings and differentiate themselves in a market that is rapidly evolving through the adoption of new technologies. The bank that positions itself as a true service platform – and wins end-customer preference for experience, customization and quantity of products – will surely achieve a more successful competitive model over time.
The resources provided to people are mainly due to the expansion and facilitation of access to the Internet, information, solutions, tools and also with technologies becoming cheaper. Thus, in addition to the benefits to consumers, technological entrepreneurship was stimulated. ”The technology itself is much cheaper and more powerful, which enables more people to invest to developing new solutions to real problems. This movement popularized tools that allowed consumers to have a lot of power – today they can make a buying decision about anything with much more information. This makes the level of competition very high” says Marco Mastroeni.
Refurbished face-to-face service
Also according to the “Febraban Banking Technology 2019 Survey”, of the total banking transactions (involving amounts or not) carried out in the various service channels of the institutions, 60% were carried out through digital channels (internet banking or mobile banking). The remaining 40% were made at face-to-face service points, such as branches, and others (banking correspondents, self-service, etc.). This last percentage, therefore, is not negligible, despite the fact that banks already promote transformations in the service model and in the service and product offerings at branches.
In this regard, Gustavo Fosse explains: “We observed that the branches have become locations to take questions from customers, provide financial consulting and serve more structured operations.
Branches tend to have a more consultative and technology-connected role, a place where the customer can use this environment to reconnect with the bank, resorting to consulting services, financial advisory and contracting more complex products. “Customers demand several types of support with different levels of complexity. The physical channel still is fundamental in certain situations, but the experience delivered here must also be connected and integrated with the digital channels”, adds Biagini.
When we talk about face-to-face service, we need to offer an experience that can connect the physical with the digital Sergio Biagini, Deloitte's Lead Partner for the Financial Services Industry
Faced with all the changes that have been occurring in consumer relations with banks, evidenced above all by the growing migration of operations to digital channels, organizations in the financial sector also need people who know how to deal with this new reality. People must be trained to understand this new dynamic, understand and operate technological tools that tend to demand a more complex and analytical training.
“The profile of the professionals who will be at the front of a branch of the future will evolve. It will be more consultancy-oriented, with more knowledge about products and clients’ needs, and with more consultative skills. People need to be prepared over time, which requires investments to train talents for new processes, for new business models”, says Sergio Biagini.
Banks invested R$ 38.4 million in technology training for 63.1 thousand professionals in 2018. This is a need that cannot be neglected by organizations in this transformation scenario. “Innovation, technology and new business models for all this, we will need people who have the ability to face such challenges,” says the Deloitte’s partner. “It is necessary to invest in talents who can learn from the use of technologies and experiment them.”
How should one face the challenge of being prepared to adjust the way professionals see and deal with the transformations in relation to the way they should work? Immersion in the digital ecosystems is one of the possible paths. This can be done in a variety of ways, ranging from lectures and workshops with experts, to following a day of activity within a coworking office or a startups accelerator. “Depending on the field of action, the reality shock needs to be a little bigger. The solution could be a week in innovation hubs, in Silicon Valley (USA), in China, in Israel”, suggests Mastroeni.
Alberto Campos, vice-president of Technology at Serasa Experian, highlights some problems that Brazilian managers must face. “We have a deficiency in basic training in the areas called ‘STEM’ (science, technology, engineering and mathematics) in the United States, which makes the interpretation and application of new technologies a little more difficult. We come back to the question that companies need to help build this basic training. And this will happen increasingly, given the obsolescence and the difficulty of finding labor.”
Technologies to ensure competitiveness
In this complex scenario of transformations, it can be seen that managers and entrepreneurs are already aware of the technologies that have moved the services segment. The question is how to structure and enable the evolution of the organizations’ management to ensure their sustainability and continuity.
“Some technologies that are being studied and experimented with will be key competition factors in the future to achieve a better efficiency rate,” explains Sergio Biagini. “Artificial intelligence, data analytics and blockchain will generate an expressive competitive differential for organizations when they are fully adopted.”
The challenge is to understand the customer’s wishes and offer what they demand or may be interested in, in a way that there is a connection between all the management, production and service structures of an organization.
In the end, it is up to the entrepreneur and the business leader to be strategic, to plan, to have technological, management and personnel resources trained and updated to act in line with the digital transformations, structuring a data architecture that can exploit the enormous volume of information in its fullness. It is also necessary to ensure respect for the aspects of privacy, transparency and compliance with the application and use of technologies. The sum of these factors will certainly sustain and promote success for financial services institutions in the near future.
Brazil in the transformation scenario
Just as the consumer has been very open to the innovations and transformations promoted from the current digital revolution, the entrepreneur and the manager who work in Brazil also benefit from their propensity to easily accept and adapt to the new.
For Alberto Campos, “crises create the need to be creative, resilient. The management of Brazilian companies is at a different, higher level. I also see that technological tools are widely used, which in the past only happened in large companies. In addition to technological transformation, we have great cultural advantages, such as flexibility, adaptability, and this is very important. Maybe, on the world stage, we’ve never had as many chances as we do now.”