COVID Did Not Improve Digital Banking in the UK, but APIs Will

Newsflash, banks and fintechs: poor customer service is hurting your bottom line, big time. The internet has democratised the world of finance such that virtually anyone with an internet connection can read up on the best financial services that are out there. And with the financial landscape being more diverse than it has ever been, you can bet that customers are only looking to engage with financial institutions that can provide them with the smoothest, most agile and engaging services.

Providing good customer service is a no brainer when the benefits of doing so are boundless. Happy customers are more likely to stay, and it’s been proven that organisations that boost customer retention rates by just 5% can enjoy profit increases of anywhere between 25% to 95%.

Now, those numbers may sound incredulous at first sight, but breaking things down shows just how much customer satisfaction rates can lead to better marketing and customer service KPIs:

The current state of banking and fintech in the UK

Unfortunately, UK banks and fintechs aren’t exactly scoring straight A’s on the UK Banking Empathy Experience Index (EXi) report card.

One in three banking and fintech customers express high levels of dissatisfaction with their experience, with barely 15% of them rating service quality as “excellent.”

The result? Banks and fintechs are having trouble getting customers to onboard digital banking services.

At barely three million active users,  or 4% of the UK population, the country’s digital banking volumes are a far cry from  those enjoyed by global leaders in the space, such as Thailand (83%), UAE (69%), and Sweden (53%).

This is after the pandemic-induced digitalisation surge that has swept the globe. Even under such favourable circumstances, both banks and fintechs have experienced difficulty retaining existing users, or they even lost customers outright in 2021.

Every other bank in the UK reported a net loss in user base in Q2 2021.

This could stem from the fact that financial institutions have their hands tied when it comes to how flexible they can be. With so many compliance and regulation standards to abide by, the ability to stand out with personalised, unique services can be tough. But that’s also why customer service becomes an even bigger determinant in deciding which bank or fintech comes out on top.

Customer needs vary greatly, especially when it comes to something as personal as finance. Without good customer service, financial institutions will have a hard time acquiring valuable data from their users, which in turn will affect their ability to tailor their services to meet customer needs. To get out of this classic chicken-and-egg growth conundrum, UK banks and fintechs need communication tools that are secure, compliant, easy to implement, and scalable, so that they can communicate with customers one-on-one affordably.

Communication APIs to the rescue!

SMS APIs: The indispensable channel for reaching more customers in the UK

In terms of scalability and cost-effectiveness , SMS has all other communication channels beat by a country mile. Promotional emails have an open rate of just one in five, and LinkedIn’s private messaging service InMail fares slightly better at 57.5%. But SMS boasts a dominating 98% open rate that is achieved at an astoundingly short  three minutes post-delivery.

Sixty-four percent of UK customers have also specifically stated that they would like businesses to use SMS more, especially when it comes to time-sensitive offers or promotions that have limited slots. Compared to other channels, such as email, where financial institutions experience high attrition rates, banking and fintech users are literally waiting for their financial service providers to contact them via SMS.

To reach the masses effectively, financial institutions (both new and old) can segment their audience and schedule promotional messages to be sent in bulk via communication APIs (or application programming interfaces), such as 8x8’s SMS API solution. APIs do more than just “press send” on your behalf. They also allow agents to customise messages to suit specific clients and optimise campaigns through engagement monitoring.

More importantly, 8x8’s SMS API allows financial institutions to prove their legitimacy by displaying their business info through Google Verified SMS and custom branded links, as well as branded sender ID. Combine that with an add-on feature, SMS Engage, and your agents can have two-way, content-enriched conversations with your customers. This gives you plenty of opportunity to get to know your customers and build services that they want to use over and over again.

Bring the bank branch to your customers with video consultations

While communicating over SMS is convenient, money is still a touchy subject. Therefore, some customers still prefer speaking to an actual person before they decide to hand over their data or commit to a service. Video conferencing services create a middle ground by allowing new customers to chat with a human representative before onboarding, without the hassle of visiting a physical branch.

Of course, financial institutions should only use secure video solutions, such as 8x8 Jitsi as a Service (JaaS), to protect their customers’ data. These cloud-native API solutions are not just independent from unsecured third-party platforms, but they are also guarded by stringent network specifications and round-the-clock assessments to keep customers and banking data safe at all times.

Security and convenience don’t have to be mutually exclusive either thanks to the embeddable video format of JaaS. You can place video conference rooms  on your websites or mobile apps, and allow your customers to connect to your agents with a single click.   This removes the headache of downloading yet another app or registering for another account (and then forgetting the password).

The future of customer service is 8x8 Communication APIs

Communication APIs  are not pie-in-the-sky, futuristic tools that banks and fintechs are hoping to implement “some day” when time and budgets permit. The technology for cost-effective, scalable, and effective customer service is already here. The fact that 8x8 Communication APIs are low-code and compatible with legacy infrastructure means that financial institutions can get long awaited upgrades in a matter of minutes.

Get the full report on why UK banks and fintechs should no longer wait to improve customer communications in this free 8x8 eBook.