How to create trust in financial services in turbulent times and beyond

Great article in the AFR outlining benefits to both financial services firms and their customers when digitising manual processes….


“Digital platforms and processes are imperative for building trust with consumers and supporting staff in financial services”

“Connecting disparate legacy systems with a system of action creates opportunities for automation, which supports operational agility and resilience. This has never been more important given all the pressures COVID has placed on banks”

When the COVID-19 pandemic was declared in 2020, Kiwibank was fortunately some way down the path of digitising its customer operations.

The outbreak only served to speed up this process for New Zealand’s state-owned bank, which was required to immediately close its branches under strict stage-four lockdown restrictions in early 2020.

“It was a watershed moment,” says ServiceNow’s head of financial services Matthew Talbot.

“Approving and processing loans, which were then multi-step, manual processes, ground to a halt. Since then, Kiwibank has automated over 43 loan request types into digital workflows. Hundreds of manual steps have now been digitised as part of this program of work, vastly improving both the customer and employee experience.”

“All of a sudden, the organisation’s most important asset, its people, could spend more time on high-value tasks, rather than being bogged down in manual processes. Not only did customer and employee satisfaction both improve as a result, but automating processes also strengthened the bank’s ability to meet its regulatory obligations. So there were wins across the board,” he says

The results were stunning. Thanks to digitising many of its formerly manual processes, Kiwibank has been able to reduce the time taken to serve its loan customers by 75 per cent. The percentage of loan applications that required reworking also dropped by 83 per cent.

Back in Australia, big-four bank ANZ is reaping similar rewards, thanks to the work it is doing with ServiceNow to streamline employee workflows, which are processes that connect tasks and teams to increase efficiencies across organisations.

ANZ’s CEO, Shayne Elliott, recently shared at a Trans-Tasman Business Council Briefing that ANZ is starting to enjoy all the benefits that go with improving the employee experience through technology.

The bank started working with ServiceNow in early 2021 to consolidate and simplify its IT systems and streamline operations to streamline how employees get work done.

“ServiceNow’s platform also gives ANZ the advantage of a fully-integrated view of technology and risk,” Talbot says.

Build trust and minimise risk

Robust digital platforms and processes are essential for building trust with consumers, which is so essential in financial services.

“If customers’ interactions with a bank don’t flow well, they start to lose faith in the organisations that safeguard their money, which has serious negative consequences,” says Talbot.

“Well-structured, simplified digital processes are critical in supporting staff to do their job to their potential. They are also instrumental in helping financial services businesses to meet compliance requirements, by making operations transparent and measurable.”

Digital workflows that connect different teams and tasks can streamline every process between clients, banks, and third-party organisations like regulators and service providers.

They make it easier for consumers to engage with financial services businesses, covering everything from know-your-customer processes to opening accounts, applying for loans or onboarding new business customers and products.

Adopting agile and cloud-based technologies also ensures incumbent businesses can compete and engage with fintechs, which are not labouring under complex legacy systems in the same way established banks are.

“Connecting disparate legacy systems with a system of action creates opportunities for automation, which supports operational agility and resilience. This has never been more important given all the pressures COVID has placed on banks,” adds Talbot.

Fast-tracking connection

Kiwibank and ANZ are just two antipodean financial services businesses that are transforming their operations by connecting, simplifying and digitising operational processes. A growing cohort are also replacing cumbersome middle-office tasks with integrated digital systems.

“Middle offices rely heavily on unstructured data and labour-intensive processes. We call it the messy middle,” says Talbot.

“Despite the advances in consumer-facing digital tools, most financial institutions still have extensive siloed legacy systems that create complexity and slow services down, not just for consumers, but also for commercial and institutional customers.

For instance, a large US bank that digitised its credit card onboarding process reduced what used to be an eight-week process down to eight days. “Across the financial services sector, entities from wealth management to insurance are all implementing straight through processing to onboard customers. In a fast-paced digital world, the last thing customers want is to wait a week or more to start transacting through their new financial services provider,” he adds.

COVID has fast-tracked the digitisation of the industry. How and where customers engage with financial institutions compared to just 18 months ago marks a critical juncture in the banking landscape. More broadly, the industry is evolving from a “shift and lift” approach to digitising processes, to rethinking the way the work is done, especially in areas like risk and compliance.

This presents rich opportunities for the banking industry to find new ways to provide seamless, secure, and personalised services, overcoming fragmented teams and systems, and building trust by keeping compliance and ethical practices front and centre – both through challenging times and well into the future.