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CPaaS will Enable Banks to Win the Customer Service Battle

29 Mar 2018 - 4 min read

The ways in which enterprises buy and deploy software and hardware has undergone a transformative change. Software as a Service (SaaS) and Infrastructure as a Service (IaaS) are the dominant models for building and deploying digital first business. As these platforms have evolved, they have had a dramatic effect on how companies approach customer service, in particular how they communicate with their customers.

In tandem, consumers are ‘always on’, and expect the companies they routinely interact with to reciprocate. This is particularly true of their banks and other financial institutions. Everything from a simple request for a balance check, to authentication and being able to view transaction history, is a consumer requirement that must be dealt with instantaneously, across multiple communication channels, in the moment of need.

With the advent of a high-street banking market that is opening up, advanced by legal requirements like PSD2 and ‘switching’ services, failure to meet instantaneous needs can result in customer churn. Banks need to push hard on innovation to differentiate themselves, and can no longer rely on loyalty in a market where the consumer freely ‘shops’ for their financial services.

This puts customer service up there as the new battleground for consumers – an area that banks have traditionally underperformed in. Customers don’t want to have to wait in long queues or spend ages on the telephone, just to ask a simple account question. In fact, according to the latest UK Customer Satisfaction Index, banking lags behind other sectors like retail and tourism when it comes to customer service.

Against this backdrop, banks continue to close branches. In the UK alone, 948 were closed in 2017. Despite banks increasingly moving their services online and on mobile, another recent study found that most customers, including millennials, still prefer having a physical branch nearby, particularly for major financial services like mortgages.

It follows that the closing of high-street branches is having a detrimental effect on overall customer satisfaction. According to another study by KPMG, 77 per cent of the UK’s current accounts are still managed by the big four banks, but poor customer experience cost them a whopping £3.7 billion between 2015 and 2018.

There is an apparent widening gap between customer service and the increasing low-contact (and low-cost) trend in moving services online.

Keeping ahead of the innovation curve

The rapid pace of technological change can be a problem even for the most agile of enterprises. New technologies and devices in turn create new patterns of demand, meaning that keeping pace, let alone future proofing, can be a challenge.

Whilst some of that expectation is being met by AI driven chatbots (Gartner predicts that 25 per cent of customer service and support operations will be chatbot driven by 2020), consumers want to interact across multiple platforms – typically via voice, SMS, messaging apps and increasingly, video. These communication channels can be fragmented and difficult to manage.

The rise of Communications Platform as a Service (CPaaS), makes it easier than ever for companies to create differentiating customer experiences, whilst at the same time promising to reduce costs and expedite innovation. Built on the ‘as-a-service’ model, CPaaS enables enterprises to reduce fragmentation in the customer journey by easily integrating voice, video and text functionality within their own customer-facing applications.

According to a recent Juniper and CLX research white paper, the value of the CPaaS market grew by 50% to more than $1.6 billion last year, and is set to quadruple over the next four years to $6.7 billion by 2022. While early CPaaS adopters have primarily been agile, digital-first players, like the raft of new challenger banks, traditional high-street banks face a race against time to develop the range of communication services consumers now expect.

Crucially the growth of the CPaaS market aligns with emerging trends in customer-facing communications. That means a much richer, contextual set of tools that enable businesses to improve the overall customer experience –meeting the in-the-moment expectations of consumers and harnessing the vital role that differentiation and personalization plays in attracting and retaining them.

Banking in an omnichannel communications era

As well as chatbots, CPaaS API’s enable the deep integration of communications capabilities such as SMS appointment reminders, authentication services, video-enabled service agents and contact centers into customer-facing applications, so that options such as click-to-call and clicktomessage can be included with minimal time and effort.

In general, businesses acknowledge that a new battleground is opening up based on high levels of customer service, and that a more contextual approach to communication will become the norm. To thrive in this environment, digital adoption and innovation are key, and the focus needs to be on a holistic approach for both back-end and customer facing services.

The CPaaS model unpacks the complexity of contextual communication, so that customer service is no longer a fragmented affair and difficult to implement. For banks in particular, against a backdrop of shrinking branch networks and intensifying competition, taking a CPaaS enabled approach will be vital in winning and retaining consumers in the years to come.

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