Chapter One – An Online Transformation

The self-service revolution

The relationship between financial service businesses and their customers is being progressively redefined by digitization and a proliferation of online services. This trend is most visible in the banking industry. According to the British Bankers Association (BBA), there are currently 7 million logins to online banking services every day. This feeds through to $10bn worth of transactions every week. Usage of online banking services grew by 40% between 2009 and 2013.

The shift to online banking is global trend. Within Europe and Scandinavia, online banking has the greatest reach in Iceland (91% of the banked population), Norway (89%) and Finland (86%). Over the EU as a whole, the reach is 49% with Britain coming in at 57%.

The same transformation (to a greater or lesser degree) has affected other “traditional” financial service providers such as stockbrokers and foreign exchange firms, with online platforms allowing customers to buy, sell and manage their investment portfolios.

Service innovation

Digital technologies are also driving the introduction of new services that could only really exist in the era of Internet platforms. Alternative finance is a case in point. According to figures published by Cambridge University, the “alt finance” sector, as typified by peer-to-peer lending platforms grew 144% to a value of $7bn between 2014 and 2015.

The Internet is also fueling new payment systems, such as the now venerable PayPal, a range of smart phone e-wallet solutions and, more tentatively, consumerfriendly bitcoin payment solutions.

The mobile explosion

Across the entire gamut of e-commerce, PCs and laptops are just one option when transacting online. Bigger screens on smart phones and rising tablet sales have given rise to an anytime, any place, anywhere ‘Martini’ generation of Internet users who will transact on whatever device is most appropriate. (

Mobile banking is a growth area. In the US, the Federal Reserve says that in 2015, 31% of Americans are using cellphone banking. As things stand, the majority of users restrict themselves to checking their accounts but 17% have made payments, and a generational change is underway with under 30s more likely to bank on cellphones or tablets.

A primary channel – the importance of customer experience

Customers prefer to access financial services online. As far back as 2011, an Accenture survey found 80% of bank users saw the Internet as the primary means to access their bank accounts and usage has increased since then. In the future, the quality of digital service will be key to customer retention and brand differentiation. As such, it is vital to create the optimal customer experience.

Chapter Two – The Challenges of Online Financial Services

Creating a satisfying customer experience in a complex environment

Financial services sites typically offer complex functionality on both the consumer-facing and back office sides. At an operational level, the software must work. No financial services organization can afford to expose consumers to a system where transactions fail because of a fault in the system.

Equally important, the software must work ‘for the customer’. If an insurance application form is confusing or the processes involved in setting up, a direct debit or payment are non-intuitive, the customer may be deterred from completing the form.

The site must deliver on its objectives. Site owners want customers to take a certain path, guided by navigation aids. If customers are getting lost, sidetracked or if they are failing to find the information they need, the site isn’t working. Financial services sites are rigorously tested. Nonetheless, undetected errors or poorly designed processes do occur.

Also, with each subsequent upgrade there is a possibility that new and undetected usability, functionality and performance problems will be introduced. Ensuring that problems are rapidly identified and rectified is an ongoing and time-consuming process.

Migrating to mobile

The extension of services across a range of devices and browsers increases the possibility of usability, functionality and performance errors or inconsistencies creeping in.

For instance, a web page rendered on a PC screen might combine information with a series of links that funnel the user to the next stage. When rendered on a small smart cellphone screen those links may be hard to find, creating a barrier for the user. As the number of devices used by customers proliferates, inconsistencies of this kind become a bigger problem.

Barriers to conversion in non-secure areas

A poor experience undoubtedly has an impact on customers. Financial services platforms tend to have secure and non-secure areas, with the former being open to those who have yet to sign up and the latter providing account management functionality. For customers who have yet to sign up, poor usability, performance and functionality are barriers to conversion.

These barriers will mean fewer people completing the journey to check out and purchase, thus having a direct effect on the bottom line. Financial services websites (unlike those in retail or travel) typically see a lower number of visitors, however the long term return for each new customer acquisition is usually many times that of the aforementioned, thus making each initial interaction and experience that much more critical.

Poor experience in secure areas

The impact of a less than optimal experience on customers carrying out transactions in secure areas will largely depend on the nature of the business. In the case of major banks (where customer churn is low), a problem may not lead to customers switching suppliers. However, it could well undermine faith in the cost-effective online channel and drive traffic to the branch or the telephone.

For a challenger bank or an online share-trading platform, a poor experience will quite conceivably trigger a decision to try out a rival’s services. Repeated problems will certainly have a negative impact on trust.

The compliance question

Banks and other financial services institutions are working in a much tighter regulatory environment. Following the financial crisis, regulators initially focused on ensuring that banks had sufficient capital to trade. Since then, scandals such as the inappropriate sale of sub prime mortgages in the US and insurance mis-selling in the UK, have led to a much tighter emphasis on conduct.

In the UK, the Financial Conduct Authority has introduced new conduct risk principles, designed to ensure that financial services companies put the needs of their customers first. Organizations must demonstrate that their sales strategies and targets are driven by an imperative to sell appropriate products. Crucially, they must be able to provide evidence when asked by the regulator.

Tackling fraud

Institutions must also be compliant with data laws requiring them to protect customer information and the integrity of customer accounts. Again, this can be challenging. Fraudsters who have access to account holder user names may repeatedly try to illegally access accounts using a range of passwords. Institutions have a duty to monitor suspicious activity and take action when required.

Why disputes arise

Disputes are inevitable in all sectors of e-commerce, and they usually occur because a claim made by a customer doesn’t tally with the website owner’s perception of events. For instance, let’s say a customer misses a credit card deadline. He claims he tried to make a credit card payment ahead of the deadline but was prevented by repeated software crashes. The site owner denies this and insists on imposing a penalty charge. The result is a dispute that may drag on and ultimately cost the provider a good customer.

Chapter Three – UserReplay & Managing the Customer Experience

The website as your customer sees it

The financial services industry is built on confidence and as customers move online it is vital that the trust they have in providers is maintained in the self-service environment. One way to maintain this trust is to ensure there is a rigorous focus on the quality of the customer experience.

There are various ways to do this, ranging from comprehensive testing through to customer surveys, but not every negative experience issue is detected. On a day-to-day basis, customers encounter usability, performance and functionality problems that are often not apparent to managers.

Bringing down the barriers

Let’s take the example of a non-secure area of a financial services site. Typically the aim of this part of the site will be to educate and convert potential customers. For instance, the goal may be signing customers up to buy a simple life policy, an ISA or a more lucrative pension.

But the chances are that there will be barriers to conversion. Perhaps the information isn’t clear or some of the questions in an online application form are ambiguous. By tracking the journeys of individual customers and analyzing their behavior page-bypage you can:

• See where those barriers to conversion are – often highlighted by ‘thrashing’ (multiple attempts at a single task)
• Quantify the consequences of those barriers.

That second point is important. A poorly written form may cause customers to stumble over certain questions and take longer than necessary to complete. Nevertheless you may find that most will persevere. On the other hand, a software error that rejects 50% of email addresses or that doesn’t recognize certain ZIP codes will stop significant numbers of customers in their tracks. All barriers to conversion should be rectified, but it is important to prioritize the most serious.

The secure site

The same principles apply on the secure side of the site. This will typically offer customers a range of quite complex tools – some of these may not function properly, others will be non-intuitive. By replaying individual journeys you can fully understand the points at which customers are struggling and why. Crucially, UserReplay provides evidence of what the real problems are.

Let’s say fewer than expected people are using a bill payment tool, resulting in higher usage of telephone banking. Managers may recognize there is a problem but don’t know what it is. By replaying journeys they can see exactly where customers are encountering obstacles and take appropriate action. The customer journey can be tracked in different types of devices and browsers. This is important, as a problem may be general or specific to a certain type of device or browser.

Rapid dispute resolution

In section two we cited the example of a customer who attempted to pay a credit card bill by the agreed monthly deadline, only to be faced with a series of page crashes that prevented completion. On phoning the call center the following morning, he talked to an agent who had no way to check whether the software problems had occurred or if the customer was at fault. As a result, the issue was unresolved.

UserReplay provides a simple solution. With the system installed, service agents can simply re-run the relevant section of the journey. If the customer’s version of events is true, the struggle with malfunctioning software will be apparent. The result is a rapid and cost effective resolution.

Detecting fraud

UserReplay comes with advanced analytics tools and a real time dashboard, allowing managers to monitor what is happening across all the customer journeys taking place at any one time. The system can be configured to notify managers of unusual events, such as multiple login attempts or changes to personal details during an online application, that may denote fraud. This allows swift action to be taken. For instance, the account can be blocked until the customer’s identify has been authenticated. If a fraudster does gain access, replays of his or her activities within an account can be analyzed and used as evidence.

Conduct risk

Financial services companies are increasingly being asked to provide evidence that their conduct towards customers is in compliance with the requirements of regulators. For instance, in the UK, the Personal Protection Insurance (PPI) mis-selling scandal has resulted in the newly established Financial Conduct Authority (FCA), taking a close interest in the sale practices of all financial services companies – levying significant fines where malpractice is evident or where good practice has not been followed. In practice that means banks and other institutions must provide evidence that customers were fully informed about the nature of a particular product, and that terms and conditions were not only presented but also read. By deploying UserReplay, companies can prove that sales guidelines were followed.

A secure solution

UserReplay’s functionality can be delivered in a Software as a Service (SaaS) format, requiring little or no integration. However, in the financial service sector, we often recommend using a version that will be installed locally and thus sit within the institutions own security infrastructure. Digitization continues to revolutionize the financial service industry but in the rush to provide advanced services while also cutting costs. Companies must not forget that long-term success depends on creating a great customer experience, whether in the branch, over the telephone or online. UserReplay provides a key tool for ensuring the online experience lives up to expectations.