Banking is one of the world’s oldest industries. It has served its place in society for centuries, helping individuals and businesses secure and manage their finances.
Though banking is now an integral part of daily life, traditional banking systems have not necessarily moved with the times. Restrictive high street opening hours, paperwork full of legal jargon and an impersonal approach are unfortunately still the industry standard.
With the introduction of digital banking, there was a light at the end of the tunnel. All of a sudden, we can process transactions quickly and smoothly, right from the comfort of our homes. We can now see each transaction almost as it leaves our account and we feel we have more control over our finances.
Disappointingly, the light ends there.
The banking industry still has plenty of roadblocks keeping it from joining the modern age. A recent report showed that financial organisations are focussing on digital transformation as their top priority for 2021. But improving digital banking is not the only priority for modernising the banking experience for business owners and individuals.
So, what obstacles are modern banking systems still facing?
How does this affect business and personal banking? This blog delves deeper into these obstacles and discusses the changes needed across the industry to make banking a stress-free and seamless experience.
Common Obstacles within Traditional Banking
Traditional banking was, and still is, full of obstacles for individuals and business owners alike. Impersonal service and a lack of control are the main issues stemming from a variety of frustrating barriers.
At the start of any banking relationship, legal paperwork is an essential part of the process. Without it, the system would fail. Proof of identity, source of funding and anti-money-laundering checks are a standard part of banking. However, little effort is put intoto explaining these in simple terms for customers to understand.
Individuals are expected to decipher the legal language themselves and are left with a feeling of distaste and mistrust right at the beginning of their relationship with a bank.
This is also the point customers begin to feel there is no appreciation for their circumstances. In the beginning, traditional banks seem sincerely interested in the personal and business needs of a customer. But as time progressed, the personal touch has been dropped.
Basic data is injected into a narrow-minded system that treats individuals with a tick-box mentality. If specific criteria are met, an automated decision is made, and a customer is awarded a particular type of account or service. This one-glove-fits-all mentality doesn’t allow room for individual circumstances or business needs.
The same process also applies to customer service and troubleshooting. Customer queries are directed to standardised FAQ pages and call centres. It leaves customers feeling like a number on a page, rather than a person with needs, goals and worries.
In the business world, international payments can still be a cause for headache. Digital banking has given rise to a massive boom in cross-continent payments, with many industries now trading globally. Yet, the processes are still lengthy and can be expensive. International transfers have yet to meet the digital fast-transfer age, and exchange rates, IBAN numbers, taxes and bank processing charges are rarely explained.
This wealth of confusion, coupled with a lack of compassion, drives customers to feel they have no control over their finances and ultimately breaks the trust with banks and their systems.
How to overcome these obstacles…
So how can banks overcome these obstacles?
In its simplest form, banks need to be more human. In a world that is growing more digital by the moment, human-centred communication must be at the core of all banking.
Walking into a high-street bank may be a thing of the past, especially since the outbreak of Covid-19. Consumers rely on technology now more than ever, yet this emphasis on digital service is potentially killing human connections to customers. Mobile apps and online payments streamline most day-to-day transactions. Yet a personal approach to service cannot be digitalised.
Many banks are choosing standardised call centres and automated messaging services over traditional human-to-human conversations. When a customer has a query about the identity documents requested or wants to consider what account is best for their business, no templated response beats a personalised answer.
Leading, innovative banks, such as PayPugs®, are keeping human interaction as a necessity, that is why every one of their members has a personal manager that they can personally contact with any issues.
Customers need to be able to reach out when they have a query and feel they heard it from an experienced professional who cares. Having a one-to-one conversation allows customers to ask any questions they have directly to an experienced banker. Digital banking has its place in basic financial management, but not in customer service.
And it shouldn’t stop at troubleshooting. Banks should also be thinking beyond a customer’s questions about paperwork and processes. They need to emphasise each customer’s drive, goals, and priorities, both personal and business. This will build trust between customers and the banks.
With the UK moving away from the EU, this approach to customer service and support will be imperative. Business owners will be navigating a difficult path during this historic changeover and must know they can turn to their bank for advice throughout.
Overall, instead of being treated as a reference number on a screen, customers want to be known for the individuals that they are. They need trusted advice that is unique to their specific situation. Money is as personal as it gets, so banking should be too.
Moving to Modern Banking
In today’s digital world, we are slowly phasing out traditional banking. Yet, the modern processes still leave behind old-school obstacles that banks need to tackle with urgency.
Instead of diverting queries with standardised responses, banks need to be at the end of the phone for questions. And human interaction should go beyond this. Rather than treating customers as data, it is crucial to build trust and treat each customer as unique. After all, we are all individuals, with particular needs and goals. Banking should be helping with reaching those goals, not hindering.
PayPugs® offer a unique banking experience that is highly personalised while staying streamlined, stress-free.
Contact us now to find out how we can make your banking experience seamless and stress-free.