Competing Against Emerging Digital Disruptors in Financial Services

CX Today spoke with Avaya's Bikremjeet Mannan

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Competing Against Emerging Digital Disruptors in Financial Services
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Last Edited: February 18, 2022

Charlie Mitchell

In the UK, four retail banks – Lloyds Banking Group, Barclays, HSBC, and NatWest – occupy the lion’s share of the market. Known as the “Big Four”, these stalwart brands have successfully managed significant market disruption in recent years. 

Perhaps most notably, the transition to digital online banking (web, mobile apps, proactive notifications, email, social) proved a particularly challenging wave for these traditional financial institutions to overcome. Of course, many have now weathered the storm. Nevertheless, new swells are emerging on the horizon. 

Digital Disruption in Financial Services: A Closer Look

For now, the Big Four still dominate UK banking. Yet the first signs of this situation changing are becoming evident. Since 2018, their share of current accounts has dropped from 68% to 64%, according to figures from the Financial Conduct Authority. Meanwhile, the percentage for “digital disruptors” that emphasize online digital customer engagement grew from 1% to 8%. 

It is not only digital innovation that pushes this trend forwards.  Anti-competition schemes, which make it easier for customers to switch bank accounts and share information with other financial services providers, also drive disruption. 

In addition, the ongoing challenges of managing COVID-19 loom over traditional banking institutions. Thus, banks must monitor and optimise new working models after overhauling conventional working structures in response to the pandemic. 

The size of stalwart financial institutions and their economies of scale have – so far – helped to steady the ship. Multiple voices and digital customer-facing channels have given banks the flexibility to adapt to help their customers during this worrying time. 

Reflecting on the COVID-19 response of financial institutions, Bikremjeet Mannan, an account manager with Avaya, says: 

“The voice contact centre, labelled as legacy and shrinking by those pushing the digital transformation agenda, was the knight in shining armour. As the government instructed customers to stay at home, this restricted access to branches. As a result, online banking was buckling under the increased load as COVID-19 closed contact centre buildings, creating the perfect storm. The only option was remote working. Tens of thousands of contact centre workers were enabled for homeworking within days, and this gave time for those customers not online to finally take the leap” 

Mannan points towards a much more substantial disruptive threat that lurks over the horizon: global digital disruptors entering the fray. In the short-term, new niche players like Karna and Monzo are creating customer value, and brands such as Amazon, Facebook, and Apple taking market share from banking leaders is an ever-present danger.  

The differentiator that keeps banking leaders at the front of the pack, ahead of digital disruptors of all shapes and sizes, is their experienced staff. 

Here lies the quandary. As Mannan states: “Post COVID-19, lower interest rates act as a straitjacket limiting profits for retail banks, forcing them to cut costs and – therefore – staff. However, by losing staff, traditional banks lose the very thing that differentiates them from the digital disruptors.” 

Of course, staffing branches is tricky to achieve from a costing perspective. Yet, there is another way to ignite human interactions within customer journeys that fuel customer loyalty for traditional banks. 

Create a Resource Pool to Accentuate the Human Factor in Customer Experience (CX)

This approach will see banks combine branch and contact centre staff to create one flexible resource pool which cost-effectively maximises the human factor needed for superior CX. 

Naturally, there are many hurdles to achieving this aim, such as business processes, and staff skills. However, with a creative approach, banking leaders can leverage the human support that sets them apart from their digital competitors. 

Mannan recommends teaming up with a partner like Avaya to accomplish this goal. He says:  

“Avaya is uniquely positioned to provide the know-how and technology to enable a homogenous approach to back-office and front-office communications and close partnerships with leaders in workforce management”  

Alongside these capabilities, Avaya offers an array of digital channels and AI-powered applications, combined with a consultancy practice, to create and compose solutions for companies facing the same challenges.  

Through such a partnership, banking institutions can keep pace with digital disruptors while accentuating the value of their workforce.  

Of course, this is a daunting prospect. Longstanding bureaucratic processes, corporate culture, and employee mindsets are critical challenges to overcome. Yet, perhaps most importantly, it involves waving goodbye to heavily customised on-premises solutions. 

Digital Decoupling – A Phased Approach to Transformation

“Many financial services companies still cling onto their heavily customised, on-premises solutions,” says Mannan. “In years gone by, these technologies offered an opportunity to differentiate CX. Now, they make up a complex patchwork of siloed systems.” 

This complexity limits the success of transformation initiatives and inhibits the innovation curve of banks. Adding to the issue, a large-scale plan to migrate the entire ecosystem will likely take years to implement, meaning that institutions risk falling further behind their competitors. 

Mannan, therefore, recommends “digital decoupling” – a process that involves taking a phased transformation approach. Not only is this more likely to achieve a mandate from the C-suite, but institutions can also standardise and simplify processes as needed. Customer journey orchestration then becomes less laborious and more beneficial.  

Many financial institutions are approaching CX transformation this way. By doing so and adopting a “wave-like” strategy, one bank has unlocked many new learnings, which they shared with Deloitte. 

As The Head of Enterprise Agility says: “It’s not a “big bang”, but different waves targeting different segments or different areas. But we’ve taken the full stack. So, we take one area, we take the entire area, we don’t leave things outside. So that’s a gradual approach, we’re doing it in a progressive way and learning from previous waves that we are executing.”  

Most banks follow a similar strategy, with Deloitte reporting that financial institutions are one and half times more likely to use an incremental strategy rather than a “big bang” approach. 

In doing so, these institutions leverage the entire technology ecosystem, simplify processes, and kickstart CX innovation that blends digital transformation with exceptional human support. 

Speak to Avaya and Develop a Digital Decoupling Strategy

As the danger of global brands entering the financial sector grows, agile banks that maximise digital innovation and the human factor in CX will thrive. Yet fragile businesses will struggle to survive. 

To compete, Avaya supports financial institutions in developing a phased approach to CX transformation that emphasises human support and digital innovation. 

Discover more about how the leading CX provider works with its clients by visiting: 



AI in the Contact CentreArtificial IntelligenceCOVID-19Digital TransformationFinance

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