Solving payments and card challenges with a platform approach
Bank customers can be excused for tuning out any talk of digital transformation in the financial services industry. But the reality is that the big investments financial services companies have made in their digital channels is highly relevant to the daily lives and experiences of their customers.
Take the example of payments, particularly the range of new technologies that have been developed to make that experience seamless and easy for customers. “Across the globe, there has been a lot of investment in real-time payments,” says Tammi Shapiro, ServiceNow’s global head of product for the financial services industry. “If you look at your experience with a bank today, you can send person-to-person (P2P) payments, pay your bills and move money between accounts.
“The innovation in payments has also raised the bar in terms of customers’ expecting that their money can move as quickly as they send it and if they have an issue, it gets resolved as quickly as they notice it.”
Although big investments in digital payments capabilities have the potential to elevate customer satisfaction, they have also revealed a problematic gap. Indeed, while the engagement level that customers interact with is important, it can only truly be a tool for improved customer engagement and trust if it is connected to a bank’s middle and back offices. Why? Because that is where payments are actually processed and information about their status resides. Without a seamless and intuitive connection from the engagement level to the back office, banks actually risk frustrating and alienating the very customers they are trying to serve and delight.
This is particularly true in today’s uncertain economic climate. Over the past several months, banks have played a central role in efforts to help individuals and businesses weather the coronavirus. With a rise in everything from disputes to fee waivers to loan deferrals, banks have seen the volume of transactions they need to handle skyrocket, underscoring the need to act quickly and at scale.
A mission to help banks fully deliver on their priority to become increasingly customer-centric is why ServiceNow has worked collaboratively with a wide variety of financial institutions to develop their Financial Services Operations product to achieve that objective through end-to-end innovation.
“We know there is an opportunity to improve operations,” Shapiro says. “By working with the industry, we have been able to develop ways to do that which also drive cost efficiencies, enable faster time to market to position banks alongside emerging fintechs, improve innovation and comply with changing regulations. That starts with payments and cards, but expands to all aspects of bank operations.”
Examining how payments operations of many financial institutions ultimately affect customers is revelatory. For many banks, the internal systems and processes used for payments are a collection of capabilities built in-house or by outside vendors. That complex architecture may look elegant on a PowerPoint slide, but it is likely to falter in the everyday situations customers evaluate to determine whether a bank is meeting their expectations. “If a customer calls in and they have an issue with a bill payment, the bank may log in to one system. If it’s a P2P payment, they may log in to another system,” Shapiro says. “Those systems may be connected or not, and how long it takes to get that issue resolved may depend on how many emails are required for the bank’s employees to work the case.”
The disconnected and often manual tasks required for bank employees to resolve a payments or card issue inevitably introduces inefficiency and customer frustration. But it also introduces the possibility of error and lacks the kind of flexibility and automation required to adapt and comply with changing regulations.
A platform approach improves efficiency and customer trust
In sharp contrast, however, a platform approach that connects a bank’s engagement layer to its middle and back offices eliminates the silos and balkanised ecosystem that create inefficiencies, mistakes and ultimately unhappy employees and customers. For example, consider the workflows triggered with payments and card operations. “When a case or a question comes in, we’re bringing that all together in one place and allowing the multiple people across multiple departments that may have a role in it to really work together and collaborate,” Shapiro says. “If there is a regulatory change or a regulatory mandate that an issue needs to be handled in a certain period of time, that can all be tracked in a central place.”
How that holistic connectivity improves efficiency, customer experience and trust can be seen in how it transforms the process a consumer goes through to get a credit card. Once the consumer goes to a bank website or uses their phone to apply for a card, that application kick-starts a number of workflows inside the bank that are handled by different departments.
There are application documents to be reviewed, there’s a credit assessment and approval required, and eventually, the card needs to be shipped to the customer. “All of these can touch different areas of the bank, as well as external parties. So ultimately what we’re doing is enabling that collaboration to happen all within one place,” Shapiro says. “Everyone working on the task has visibility into where in the process things are held up and where they can work together to reduce the time to finish something.”
A centralised platform also provides customers real-time visibility into the status of their application. In similar ways, fully connected operations help bank employees access the information they need in real time to answer questions about the status of payments, make changes to pending payments and initiate the investigation of potential fraud. Bank employees can also leverage a centralised platform to troubleshoot and resolve payment issues, such as missing payments, as well as streamline common tasks like changing credit limits and managing loan servicing cases and claims. Defined and visible workflows also enable more automation and controls to be put in place, freeing up staff to better serve customers.
Another important benefit of a platform approach comes when it also includes connectivity to information technology (IT) and other systems. For example, if a customer calls asking about a missed payment, the problem may be the result of a system or network issue. “Having platform connectivity to IT and other systems and giving customers as well as the front, middle, and back offices visibility into that can streamline servicing and even help avoid calls altogether,” Shapiro said.
End-to-end connection and visibility are already delivering real-world benefits to banks. For example, one large US bank uses the ServiceNow platform to handle corporate credit card onboarding. In the past, the bank took up to 50 days to review, approve and ship the cards. Using ServiceNow has sliced that time to fewer than ten days.
“A lot of that is due to the fact that teams can work together simultaneously and more collaboratively, and platform automation has reduced the number of manual steps,” Shapiro explains. “There is a significant reduction of costs by streamlining those steps. Further, getting the cards out faster also means customers can start using them faster. That is not just a better customer experience, but it also increases the time to revenue for the bank.”