Enhance customer experience in financial services with the cloud

A guest editorial by Waheed Mahmood, financial services lead, Rackspace Technology

In July 2023, the Financial Conduct Authority (FCA) published its Consumer Duty guidelines which were designed to set clearer standards of protection for consumers of financial services.

The Consumer Duty was created to ensure that financial institutions (FIs) act fairly and faithfully while preventing customers from making poor financial decisions. Described by the FCA’s chief executive as “one of the most far-reaching, cross-cutting pieces of regulation” in decades, the Duty was an opportunity for FIs to improve their compliance standards and enhance customer relationships by building engagement and trust.

Despite the guidelines, some FIs are still struggling to meet customers’ needs and are not working hard enough to protect their finances. In May 2024, the FCA fined HSBC UK Bank plc, HSBC Bank plc and Marks and Spencer Financial Services plc £6,280,100 for its historic inadequate treatment of customers in financial difficulty across secured and unsecured products. Between June 2017 and October 2018, HSBC failed to properly consider some people’s circumstances when they had missed payments, the FCA claimed.

Consumers now expect their financial services to be as accessible and easy to use as other areas of their lives. Technology can help achieve this. FIs that leverage technology can increase customer satisfaction, reduce the cost to serve and boost conversion rates and growth.

As we look ahead to the next year of implementation, here are some ways FIs can harness technology to drive customer satisfaction.

Adapting to advancing technology

Firstly, FIs must thoroughly assess existing solutions, applications and systems to identify weak points before embarking on digital transformation initiatives. Many FIs continue to rely on outdated technology, putting them at a disadvantage as customer demands and expectations grow. This outdated infrastructure is particularly vulnerable, leaving sensitive customer data exposed to risk.

By modernising their technology stack, FIs can enhance customer touchpoints while optimising critical systems for transaction processing and personalisation. These enhancements collectively deliver an experience tailored to specific customer needs.  

FIs are already harnessing the power of Generative AI (GenAI) to elevate the customer experience. AI-powered chatbots, for instance, can provide real-time support and guidance to customers, freeing up humans to focus on more complex issues.

FIs are also harnessing machine learning to analyse customer spending patterns and offer personalised financial advice and recommendations. Meanwhile, blockchain technology is enabling more transparent and efficient processes, particularly in cross-border finance. These innovations don’t just streamline internal operations – they empower customers with greater control and visibility over their finances, fostering more rewarding relationships with their financial providers.

However, to fully capitalise on GenAI, FIs must ensure they have the right infrastructure in place. GenAI models rely heavily on high-quality, well-structured data for training and making accurate predictions. FIs also need robust internal systems and data management practices that can feed these models.

A cloud-enabled platform is particularly well-suited for FIs with specific requirements related to control, security and workload customisation. By adopting this architecture, institutions can equip their systems to handle the large storage and encryption requirements of GenAI. This, in turn, enhances both the performance capabilities and the data security that are essential for scaling these technologies.

The power of cloud-enabled ecosystems

The FCA’s Consumer Duty places high significance on helping customers make good financial decisions. Customer insights play an important role in this, however, outdated systems can obstruct data analysis, restricting FIs from offering customised advice.

The cloud can bridge this gap by providing a platform to modernise applications and infrastructure. By leveraging cloud capabilities, FIs can rollout innovative services like real-time transaction monitoring, accelerated response times for approvals and personalised advice. Crucially, cloud-enabled environments also provide banks with enhanced visibility into their operations, helping them identify and address potential issues that could disrupt usability and service delivery. This transparency translates to greater bottom-line resilience, as FIs can more proactively manage risks and maintain seamless customer experiences.

Data flow and interoperability can also be improved by integrating cloud environments with current banking workflows. Modern data analysis tools now provide the capability to analyse in real-time, which offers a new depth of insight into end-user habits. This empowers banks to develop and deliver personalised advice and services, enhancing customer satisfaction and engagement.

If organisations want to leverage these capabilities successfully, they must start by addressing data siloes between departments. Reducing the isolation of vital customer data can facilitate improvements in customer service, marketing strategies and product development. This is best done by leveraging multi-disciplinary teams to build a unified data strategy. To achieve this, integrating both design and data efforts and ensuring the final architecture is tied to a platform is essential, as these will lay the groundwork for easily actionable insights.

Leveraging the power of AI, powered by the scalability and flexibility of cloud infrastructure, is essential for FIs seeking to deliver the experiences modern customers expect. By implementing these innovative capabilities, financial providers can elevate their customer interactions, anticipating needs, streamlining processes, and building the kinds of rewarding, long-lasting relationships that drive sustainable growth. 

The key lies in streamlining core processes, such as the payment system, and breaking down internal silos to gain a holistic, data-driven understanding of the customer journey. By identifying and removing sources of friction, FIs can fine-tune their digital touchpoints, optimising the elements that resonate most and driving deeper engagement.

To stay competitive, financial service providers must make the customer experience a top strategic priority. Delighting and engaging customers on a personal level has become table stakes. Ultimately, the institutions that succeed in delivering this level of service – one that leaves customers with no reason to look elsewhere will be best positioned to attract new business and foster lasting loyalty.

Image: Waheed Mahmood, Rackspace Technology

Guest Editorial This article was produced specially for Fintech Intel by an expert guest contributor.