Challenges: User Experience
Today, the competition in the financial services landscape is growing rapidly with the entry of non-banks. Small fintech companies are nibbling away at large financial institutions’ market share for their products and services. The major value proposition from fintech is top-of-the-line end-to-end customer experience.
During one of my recent business trips, I traveled from Austin, Texas and used my corporate business card perfectly fine for various expenses, such as Uber, restaurants, and my hotel. But, upon my return when I reached Austin Bergstrom Airport and wanted to rent a cart, the system rejected my credit card and locked it from further use. Luckily, I was at the end of my trip, but it gave me a bad user experience and denied the merchant from having a new transaction.
Every year, billions of dollars of good transactions are denied against the merchants due to a lack of intelligent automation systems to check fraudulent versus clean transactions correctly. The banks and major financial institutions have solid technology from various vendors, which traditionally focused on internal employee functions rather than customer experience. However, today’s tech-savvy millennials need a very different user experience!
With the experienced baby boomer generation on their way to retirement and IT teams more burdened than ever with huge backlogs, there is no one to help business unit users who really understand how their business functions and what a true customer experience should be like. Throwing a customer-facing login page or a registration portal in front of end users does not fulfill the experience. The off-the-shelf products from many vendors do not satisfy the best user experience that can be delivered to end customers—a one-size-fits-all approach simply does not work. Every bank or financial institution wants to be unique in their value proposition and wants to be in the driving seat. Unfortunately for these aspiring financial institutions, bespoke development and customizations are going to be very costly and not replicable.
The problem is exacerbated by the fact that many large banks and financial institutions have bought specialized vendors’ siloed products for applications such as checking/savings account management, small business loans, auto financing, or fraud detection applications. To provide a consistent user experience, exchange-to-exchange (E2E) solutions may need integration between different vendors’ systems. This creates a very disconnected experience—confusing customers and taking longer to build, maintain, upgrade, and perform any additional enhancements that are needed encompassing multiple vendors’ products.
Strategy: Low-code Hyperautomation
Low-code and no-code automation help business users, non-engineers, and non-developers solve end-to-end customer experience problems easily and quickly by creating the use cases themselves. The modern technology stack of low-code automation tools enables citizen developers to solve their problems and replicate to scale across other businesses without having to rely on their overburdened IT staff.
One example of low-code automation is how many traditional systems are focused on identity verification or Know Your Customer (KYC), whereas, most of the frauds for loan financing may be happening through a fraud paystub of the consumer. As pay stubs are the correlators for whether a consumer will pay back their loans successfully on time, it is important to apply AI/ML automation to understand the validity of this important correlator to avoid defaults. Understanding a fraudulent transaction versus a clean transaction quickly and correctly is also very beneficial for the merchants as well as end customers for better user experience and revenue generation.