The Amazon challenge: Why banks need to pay attention to Customer Engagement Management

The Amazon challenge: Why banks need to pay attention to Customer Engagement Management

  • Amazon is winning in the UX space.

  • Banks can compete by emulating customer experience best practices.

Amazon isn’t a company to stand still. Jeff Bezos didn’t go from selling books in his garage to being the richest man on Earth without having his fingers in more than a couple of pies. Whether it‘s the unveiling of Prime Video in direct competition to streaming giant Netflix, or the more recent extension into brick and mortar storefronts, Amazon has continually extended itself into new industries outside the realms of online retail. So when it was revealed earlier this year that Amazon was in talks to provide its own current account service that could challenge the big banks, it shouldn’t have been unexpected.

The news sent shivers down bankers’ spines – and for good reason. No longer will people have to make payments via traditional means: non-banks can authorize payments and essentially rob banks of their payment revenue as long as customers agree to their terms. More importantly though, banks will be denied the customer data they so heavily rely on for risk management purposes amongst others. Should Amazon indeed make the leap into this sector, banks could quickly see themselves becoming unprofitable cash runners whilst Amazon and any other optimistic challengers enjoy lucrative financial benefits. But how does the retail giant know customers will flock to their offering over the experience and infrastructure of the real banks? How Amazon will succeed in these developments can be attributed to one thing in particular: their consideration for Customer Experience Management (CEM).

What is CEM?

While banks have spent the last decade primarily focused on their digital transformation, many have missed the crucial importance of monitoring customers’ online journey and UX. By embracing modern technologies to ensure the customer experience is smooth and services are amenable, companies like Amazon are excelling in this area with a perfectly crafted platform that delivers endless sales. So what is CEM exactly?

CEM means understanding exactly what happens during your customer’s lifecycle and using that information to generate a better service. Today, software can be employed that monitors every facet of that lifecycle and go much further than traditional online touchpoints ever could. Knowing what device a customer uses, how long they spend on each page, and the location they access it from are just some of the ways that can inform improvement. Not only that, by addressing areas where customers abandon their journey or struggle to progress due to technical issues or a confusing interface, such intelligence can be reported back to the proprietor in real time and progressive change implemented thereafter.

Why Amazon has the edge

Amazon has already proven its capabilities in the UX space. A/B testing and continuous development has meant the site and mobile application’s UX is always improving. Bank payment systems remain clunky, but by integrating payment into preferred platforms managed by companies which already have the capability to produce unrivalled UX, for customers the choice is clear. Amazon also already naturally attracts digital talent where banks don’t. Supported with big investment to boot, the company’s capability to increase its user base is only growing exponentially.

‘First published on Tearsheet : https://www.tearsheet.co/

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