What’s Holding Banks back from Investing in Tech?

The finance industry has been transformed by digital innovation over the past decade. The way consumers – and businesses – manage their finances has shifted, moving from in-branch visits to 24/7, autonomous banking via smartphones. And this pace of adoption isn’t going to stop; CACI recently predicted that mobile banking transactions are set to rise by around 121 per cent between 2017-2022. Much has been said about how technology has changed the way customers are banking – from Barclay’s voice recognition tech to Monzo’s video verification service – but what about the technology that’s powering the service banks’ employees can offer?

At SugarCRM, we recently conducted research with a number of businesses – including those in financial services – to understand the hurdles which still need to be overcome when it comes to deploying and investing in the tech that will help employees do their jobs more efficiently. So what are these factors?

It all comes down to cost

Perhaps unsurprisingly, our survey revealed that almost half of firms (48%) are putting off investing in technology for their sales teams because of concerns over cost. Ultimately, every business ultimately has a bottom line to maintain and the c-suite needs to be convinced of the value new tech will bring before they part with their budget. However despite these worries, 63 per cent of UK companies spend at least £1,200 on technology annually per sales representative to equip them with the right tools to do their jobs effectively – including smart phones, laptops, CRM systems and web meeting platforms. And nearly a quarter (22%) of the respondents said they spend at least £2,400 per sales employee.

Whilst sales employees need technology to support them in their lead generation and nurturing, when we turn our attention to the customer service departments in banks, it’s crucial that they have access to the tools and equipment to provide the best possible customer experience. Money matters are delicate and highly personal, so it’s crucial that banks have the right systems in place for customer-facing employees to handle queries – whether basic or complex – in a seamless way which leaves customers feeling valued and happy.

This is the case whether it’s retail banks or capital markets for high net worth individuals; every consumer expects an informed, efficient customer service from the very start of a phone call, queries over digital channels or face-to- face meeting. It’s therefore crucial that employees have instant access to information on the person they’re speaking with, for example immediately knowing the nature of their last enquiry, and even predicting why they might be calling now based on insight from previous interactions.

Is a lack of skills the issue?

Aside from the expense, the research also highlighted a lack of confidence and expertise in installing new technology. More than two-thirds (69%) were concerned about the need for training staff, and 20 per cent were worried about a lack of skills in using the tools. This highlights a challenge in an industry that needs to keep evolving to meet customer expectations, and be ready for the introduction of complex new legislation on the horizon in the form of GDPR and PSD2.

Unfortunately, it seems this struggle for skills could become exacerbated by Brexit. According to research from recruitment consultants Arrows Group, there has been a 10% reduction of skilled tech workers from within the EU relocating to the UK over the last year. And with RBS recently announcing it’s planning to cut 900 technology jobs at its London office by 2020 to reduce costs, tech departments may find themselves under pressure. This may not bode particularly well for the future of the bank’s customer satisfaction levels; it was recently named the UK's worst-rated current account provider for customer service.

However it’s not all doom and gloom in UK finance; Innovate Finance recently announced that UK-based fintech startups pulled in £433m of venture capital investment in the first six months of the year, more than half of which came from outside Britain, a rise of 37% from the first half of 2016.

Fuelling the customer experience

In a crowded and often commoditised market, consumers are increasingly choosing who they bank with based on the experience they can provide; Gartner estimates that 89 per cent of companies now expect to be judged solely on this. Whilst meeting compliance and regulations is clearly critical, banks must also focus their attention on the customer service they provide – which begins with the quality of data management tools which are integrated within the organisation, that help employees to do their jobs more efficiently.

Although our research revealed there are challenges in investing in new tech, businesses are still willing to spend money on new tools and equipment. It’s crucial that customer-facing organisations – in any sector – understand the value of accessible and easy-to- use customer-facing systems in empowering employees. If this doesn’t happen, they risk being left behind with outdated and cumbersome systems which can’t deliver what today’s customers expect: a fast, pain-free and efficient experience.

By Larry Augustin, CEO, Sugar CRM