The price of an undelivered email

Mobile payments, online banking and apps mean customers increasingly interact with banks and credit card companies through digital platforms. However, the boom in offering customer convenience is not without challenges. Poor back-office IT to support these systems is putting many banks at financial and reputational risk.

Tens of millions of banking apps have been downloaded. Customers now have an expectation that they can access and manage accounts seamlessly, switching between mobile, internet, and more traditional channels, like paper letters, to deal with their finances.

Banks, building societies and credit card firms find creating this seamless experience very difficult because many are hampered by legacy IT systems. Crucially, the fragmentation between newer systems and older communication streams is creating customer services challenges and putting firms in the firing line for FCA fines.

Omnichannel challenges

An omnichannel strategy that links different communication channels is what banks are trying to achieve. This ensures that customers can get the same experience no matter which method of banking that they prefer. It also means that one channel can influence another. For example, a letter automatically being posted as a result of a response to an SMS or an email triggered by an app notification that hasn’t been acknowledged.

Linking up different channels is common sense and sounds simple. The reality is that many banks and credit companies aren’t doing this because of huge hurdles. The challenges caused by fragmented back office systems, often created by historic mergers, means that different systems often don’t talk to each other. As a result, firms could risk not meeting their obligation, set by the FCA, which tasks them with keeping an auditable trail of where and how statements have been shared with customers.

As an example, email is the main way banks notify their growing number of digital customers that their statements are ready to view. But, those with full inboxes or out of date addresses won’t receive them. Banks should be sending written letters to customers to remind them to update their email address when this happens. Without an omnichannel strategy, bounce backs from these addresses don’t necessarily trigger any action. This puts any communication trail at jeopardy and leaves banks open to hefty fines.

The lack of a linked-up approach can also create extra administration for customers. If customers get multiple written reminders after they’ve responded to something on an app, it detracts from the improved convenience they think that they’ve signed up for.

Getting around legacy IT

Mergers and acquisitions across the sector over the last 20 years have left many banks and building societies with unconnected systems. Many of these control different streams of communication and it makes trying to get to a stage where one system talks to another very difficult.

A grass-roots IT upgrade requires huge levels of investment. While there is a whole host of reasons for banks to do this, it isn’t something that’s on the agenda to do every year. However, there are other options to work with existing systems to bridge the gap between channels.

We worked with a leading building society to remove the risks created by fragmentation by implementing an omnichannel platform that sits in front of their systems. This cleanses all email data initially, applying simple hygiene checks on each address to ensure it has an ‘@’ symbol in it, or a .com or .co.uk. This check can pull off incorrect emails that would otherwise have gone unnoticed. This first search takes all of these emails and filters them into a second database, which is then populated with any ‘correct’ emails that have caused a bounce back after communications have gone out.

This then allows banks to send a printed letter, reminding customers to update their email details and letting them know that their statement can be viewed online, to all of the customers with non-working addresses. Each month this process is managed between the print and digital communication teams and when an additional email address is added to this ‘bounce back’ database, it automatically triggers a printed letter to go out to the customer – maintaining the bank’s audit trail.

Think like a customer

With a whole host of major regulatory pressures, avoiding fines as a result of poor customer communication audit trails may feel like a relatively small issue to contend with. However, there are other incentives outside of the regulation.

Firms need to be agile to react to consumer trends and creating omnichannel strategies helps them to do this. For example, customers have to verify new devices like ApplePay via an SMS notification and if a mobile number isn’t correct this can make the process cumbersome and frustrating.

Gone are the days when people stayed with their bank from cradle to grave. Consumers are more willing to switch than ever before. If traditional firms can’t make the process of setting up and using new technology as seamless as possible, they could lose out to the more agile digital-only banks, which aren’t bound by the same legacy IT issues.

Firms need to establish the best way of work around outdated legacy IT systems and move towards omnichannel communication. This will not only ensure data is organically updated, it can protect against fines and at the same time help them respond to the rapidly evolving ways in which customers want to interact with their bank.

Nic Sheen is ‎Group Solutions Director at Communisis Plc

 

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