Tag Archive cx

Customer experience in the era of 3.0 FinTech

This article on FinTech was oringinally published on the CX Network. If you want to read another article on FinTech, you can read my take on the future of the ATM.
Credit: CX Network

Credit: CX Network

The 3rd generation of FinTech is fantastic news for customer experience in niche segments, says CX expert Gustavo Imhof.

The surge of technology-savvy and customer-centric entrants in the financial services industry has caused great disruption in the market, forcing the industry as a whole to enhance experiences delivered to customers – putting them in the driving seat, like almost every other industry has. However, for financial services the FinTEch transformation did not happen as swiftly as in other industries. As it happened over two decades, we can distinguish three very distinct dynamics within the industry, you can learn even more about this at PSST! PH.

David and Goliath, Wile E. Coyote and the Road Runner, symbiosis; they perfectly illustrate the dynamics and the relationships we witnessed between FinTech up-spring and traditional financial services players since the early days of the dotcom craze.

In the early days, PayPal was the David to the banks’ Goliath, the small start-up that was there to upset the deep-routed balance in the current account landscape. Soon enough, international money transfer would be disrupted by new entrants like TransferWise, Azimo with lower fees and greater ease of use.

With traditional players reacting and trying to protect their established standing in the market, the dynamic changed towards one closer to the classic 1950s Looney Tunes cartoon Wile E. Coyote and the Road Runner.

It might sound far-fetched, at first, but consider this for a moment:

  • Road Runner is constantly going much faster, iterating routes with incredible ease and pivoting when critical for success and survival
  • The Coyote is very, very smart and resourceful and devises great strategies to reach his goals
  • Much of Coyote’s plans are based around the exact same sort of paradigm (Acme products) and it appears incredibly complicated to move away from established practices
  • It does happen that Coyote catches Road Runner, but even then, the rewards are not perceived to be as massive a success as hoped.

If you were to replace Road Runner by FinTech and Coyote by traditional players, we find striking similarities with recent events in the industry, such as longer established institutions trying to copy new market entrants, creating and running incubators, hackathons, and taking interest in or outright buying-out the more agile and disruptive FinTech actors.

In the early days, PayPal was the David to the banks’ Goliath, the small start-up that was there to upset the deep-routed balance in the current account landscape.

There is however a new dynamic which surfaced recently. This dynamic has actually existed in nature long before the written word but was first described in the late 1800s: symbiosis. A symbiosis is the phenomenon of unlikely organism (FinTech and traditional organisations, in this case) living together in harmony in a mutually beneficial agreement.

Express Current Account for your front-line

You’ve probably heard the case for businesses empowering their front-line staff to delight customers and provide spectacular service recoveries (maybe your business even does it too). In many cases, these staff members have a budget they can spend on these individual interactions with customers. This can leads to burdensome processes to record, book keep and budget.

Tide is a current account platform which gives you a sort code and account number in five minutes, has no monthly fee (but a small transaction charge) and a credit card. And to put the cherry on top of the cake, they provide smart tools to streamline bookkeeping, admin and invoicing directly on a smartphone – accountant-free, which makes it incredibly easy to maintain afloat.

The above scenario would be significantly streamlined if a business was to open a current account for each of their locations, where they would deposit their ‘recovery allowance’ and harness the power of the automated reporting which allows tracking the expenses whenever required (i.e. as a source of insight alongside Voice of the Customer data or localised performance management).

A bank might well want to enter this space, and so they could. But with current accounts not being the most profitable products they can offer (it tends to be more of a step towards more profitable products such as mortgages), most banks would be better off allocating valuable resources into enhancing experiences delivered through critical journeys more in line with their leading products.

(Very) short-term ad-hoc car insurance

Remember the last time you had to borrow someone else’s car? It’s a conundrum where someone must choose between breaking the law and getting a hefty fine, or much paper work and headaches involved for a journey that could be as short as an hour.

Cuvva understands this is a broken journey many consumers are facing which is why they build an entire subscription-based business around this. Their offering is simple: drive any car by the hour, only pay for what you use and be insured in a matter of minutes rather than days whenever you need to drive a new car. Their product enables you to protect the car owner and yourself without even affecting their policy and their no-claims bonus.

In short, it’s a pay-as-you-go service for your car insurance. Obviously, as many services of this type, the minimum unit (here the hour) costs significantly more than if it was part of a tariff, but it does enable a quick, headache-free resolution to a pain point that is all too familiar to car insurance policyholders all over the UK.

This service could be easily mimicked by leading insurers but would signify a complete change in their business model should they want to follow a more pay-as-you-go approach. And people who are always on the road will probably prefer a tariff, which would represent a better deal for them. If you’re interested in learning more about FinTech and its security, check out Geek Insider for more information.

How does this make a FinTech symbiosis?

A symbiosis is the phenomenon of unlikely organism (FinTech and traditional organisations, in this case) living together in harmony in a mutually beneficial agreement.

The offerings of tide and Cuvva are very niche and cater to an audience that is thus far inadequately catered to by the more established players. Yes, they are probably taking some business away from them, but it does not represent the core segment in their customer base (with traditional players investing heavily in CX, the journeys were simply too broken for these to be a priority).

On the other hand, it would be an extremely resource-intensive and herculean task for Cuvva to take on the leading insurers or for tide to become a full-service bank. With Cuvva and tide catering to these niche needs and the rest of the industry providing services to the greater population, FinTech finally found its place in the consumer landscape – not in antagonism but, on the contrary, co-habiting harmoniously. This new-found symbiosis is what I call: ‘next practice in the making’.

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Defining the new normal with AI: How the Nordics are transforming CX

This article was first published on the CX Network. It was later re-published on the AI Intelligent Automation Network.

What can global organisations learn from the AI-road being paved by Nordea and Nordic Choice Hotels?

Every now and then, I find myself discussing with acquaintances a phenomenon I usually describe as “The Nordic Innovation Paradox”.

Ask anyone in the streets, at the office or at home, what is the first thing that comes to their mind when they think about one of the Nordic countries? The overwhelmingly majority is certainly going to be faced with answers such as “IKEA, their flat packs and meatballs”, “LEGO is my whole childhood” or “I had a Nokia 3310, it used to last forever” – and yes, every single living soul at that time had a 3310 or a very similar looking phone.

The paradox is, these five countries (Denmark, Finland, Iceland, Norway, Sweden), gave us so many innovations that are fully embedded in our lives. Yet, somehow the public opinion seems to only remember these three brands.

To name just a few of the most impactful inventions, we have the Finnish-born heart rate monitor (yes, the feature that allowed you to rationalise buying your fitness tracker or smartwatch), the Norwegian paperclip (yes, they are behind the seeming feeling of structure and organisation in paperwork) and the Swedish seatbelt (something you use every time you hit the road… or so you should).

Fortunately for us, although they don’t always get all the credit and recognition they deserve, our Nordic friends did not give up on innovating for everyone’s benefit.

Artificial Intelligence (AI) is on top of everyone’s mind and it isn’t surprising that some Nordic companies are party to it. And it’s time to discuss two examples of how these unsung heroes intend to enhance customer experiences in the very near future.

Putting customers’ time first at Nordea

Imagine a bank on a crusade to fit with customers’ schedules and that goes as far as operating around the clock, all year long. This is Nordea. And they decided to take it a step further by engaging in artificial intelligence.

It first started back in March, when they announced the hiring of Liv. What is so special about Liv? She’s a virtual colleague, performing repetitive tasks faster and more efficiently than their human colleagues, freeing them up to focus on more value-add tasks and thus providing enhanced experiences to their customers. Liv is not only a fast learner, she is also very easily empowered to make the right decisions through rule-based robotics initiatives.

And making colleagues more available to dedicate more time towards great experiences isn’t the only way Nordea is harnessing the power of AI for the benefit of their customers.

Back in July, they announced a partnership with a start-up called Feelingstream with the vision of tackling response times customers face when dealing with customer service. The AI-based text-analytics solution can interpret inbound customer communications (reportedly hundreds a second) and intelligently forward them to the right recipients within the business, cutting away the agent-based sorting (or excess of handoffs) as witnessed in so many businesses around the world.

The solution is being trialled in Finland now and is expected to provide much shorter wait times before a customer can be put in touch with an agent. Should synergies between Feelingstream and Liv be explored, Nordea might well be on a winner and on the verge of reinventing customer services!

A digital-first hotel strategy at Nordic Choice Hotels

Experience in hospitality often leads to extreme emotional responses. One might be far from their family for business purposes and see it as a stressful burden, while on the other hand someone else could be on their honeymoon, at their dream destination. Many businesses have been distinguishing themselves over the years, delivering stand-out, unique and memorable experiences.

Nordic Choice Hotels has committed $29 million to invest in their digital strategy, enabling their Clarion, Comfort and Quality hotels to stand out from the competition with a distinctive blend of physical and digital experiences. The architect making this transformation happen is NCH’s Chief Digital Officer, Lisa Farrar.

SEE ALSO: Nordic Choice Hotels’ Digital Retention Strategy

In August 2016, one of the hotels (Clarion Hotel Amaranten in Stockholm) within the estate reportedly became the first in the world to offer suites with a smart assistant to support them. The Amazon Echo found in the rooms is being enhanced with functions that are tailored to the hospitality universe.

But this is only the tip of the iceberg and NHC is only at the start of making their vision happen. Among the elements that have been revealed to the public, Nordic Choice wants your phone to be your hotel key (already released by Starwood Hotels and Hilton), to provide you a reception-free experience (like the Hotel Buddy in Germany), a voice-controlled room environment and room service, notably thanks to their own iteration of the Amazon Echo.

Farrar also believes technology should facilitate an increasingly more personal experience, with the room having your personal pictures and clothes of your size awaiting you. Obviously, a personal experience is already made possible through services such as Cachet World (a platform offering, among other features, the ability for guest to personalise their hotel rooms by purchasing add-ons such as designer bedding or beauty essentials) in high-end hotels, but the customer is still required to contribute and tell the hotel what they want.

There is little doubt that the latest technologies, such as AI, present the potential to deliver all the above in a seamless and delightful way – and that’s exactly what Nordic Choice seems to be aiming towards; they clearly are investing the required resources to make this vision happen.

Keep in mind that Farrar only started her journey last year, but it clearly is a journey to follow and keep up with, as it has the potential to inspire customer experience professionals across industries.

The verdict?

One thing seems clear, Nordic companies such as Nordic Choice Hotels and Nordea are prime examples of paving the way in harnessing AI for differentiated and enhanced customer experience. This simply is customer experience next practice in the making.

 

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Disruptive Customer experience design in retail*

This article was first published on Nunwood.com – the Customer Experience Blog. It is the exclusive property of KPMG Nunwood, part of KPMG in the UK. It was later re-published on Engage Customer.

Two decades ago, online retail was born. It drastically redefined the way we live and consume. Along with this fantastic growth, it also provided quite a challenge to a few traditional retailers (RadioShack’s went bankrupt in 2015, and the world’s largest music store closed in 2014). So much so that last year, Amazonbecame the largest retailer in the world. One might think that nothing could stop online retail – and would have good reasons to. Until recently.

The emergence of customer experience as a key competitive battleground is changing this. This change offers retailers ways to counter the challenge they were given by the extremely convenient online model while differentiating themselves. We explore here two novelties in customer experience design that are being implemented by brick-and-mortar stores.

Your home at Lowe’s with virtual reality
You probably remember the last time you were looking for a piece of furniture in a store while wondering if it would fit in nicely at your home. It does require an incredible sense of imagination for you to picture that new sofa in the middle of your living room. It did require your imagination, until Lowe’s (39th best US Customer Experience Excellence brand in 2015) came up with its Holoroom.

Within minutes, you will be able to design your dream kitchen inside the store and step in it using an Occulus Rift or Google Cardboard. In doing so, you get the opportunity to get a feel for how this would work in your own place, if colours match, if that new fridge fits in nicely or if you’d rather change models on certain items you’d want to buy. Supported by a sales associate, you can design the perfect kitchen, step inside and not even leave the store while making certain that new fridge is all you wanted.

This major customer experience design innovation represents a crucial advantage for Lowe’s against key competitor groups. It goes beyond traditional retail, as customers can directly and conveniently see on the spot how a certain element would fit in at their home, while also providing the support of a sales associate and the possibility to take away the product directly out of the store, unlike online retail (although carrying that big fridge on your own isn’t really recommended!). With this VR innovation, Lowe’s is definitively taking the lead and transforming what best practice looks like in the industry.

Don’t just buy it, stand next to Master Chief (or Santa Claus)
If you ever owned an Xbox (or have children), you probably already know that Master Chief is the iconic hero of the Halo franchise. Last November, for the launch of the 5th instalment of the franchise, Microsoft and British video game retailer GAME (UK’s 71st best customer experience brand in 2015) decided to mark history by using augmented reality to celebrate the launch. People in the store were given the opportunity to actually stand next to the legendary warrior inside the GAME store.

Needless to say, this definitively is a “brick and mortar” exclusive online retailers won’t be replicating too soon. And this is exactly what a segment like this one, who suffers a lot with online competition (you nowadays can just download the exact same game for the same price online), is needing to recapture stores visits and ultimately, sales. GAME provides its customers with a new experience and opens up new possibilities for future product launches around the world. One can only ask: how interactive and brilliant such a launch for Pokémon Go (an augmented reality game promised for this year) could be!?

Following a positive welcome to this concept, GAME gave a new twist to end of year celebrations. Shaking conventions, the retailer replaced the traditional photo on Santa’s knee for a selfie with its own character: Gamer Claus! Customers went in-store and by following signage took a selfie and shared it on social media.

Using the retail store like an experiential tool won’t shake the industry like the internet did, but it certainly contributes towards building a unique and better customer experience for GAME’s customers and achieve a loyal following. And who knows, it might well help them move further up the CEE ranking.

Virtual reality and augmented reality both come with great promises. Time will tell which one will be best received by customers and will sublime customer experiences the most.

This is the first post in a series of newest innovations in customer experience design and strategy, and how they redefine best practice. Next time we will be exploring innovations in the travel sector.

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