Addressing Evolving Customer Experiences with API Technology

The strategic necessity for digital transformation has been on the rise as businesses are now realizing its importance to effectively automate day-to-day processes. According to SmartBear’s ‘State of APIs’ report, API traffic is growing 2.8 times year-over-year. With API technology, organizations are now able to cut operational costs, secure profitable partnerships and most importantly, give valuable customer experiences. It has also been proven helpful in opening new streams of growth and innovation, thereby helping the bottom line.

The ongoing pandemic has certainly raised the demand for out-of-the-box business strategy that can help organizations stay relevant and connected to key stakeholders even in times of a global crisis. One of the top trends in financial services today is the drive towards Open Banking. It leverages API technology that allows organizations to offer online banking services through multiple platforms. With this technology, businesses are now able to enhance customer loyalty and engagement by harnessing additional data to build a more personalised customer experience.

According to a recent Ernst & Young Global Consumer Banking Survey, 40% of customers expressed decreased dependence on their bank as their primary financial service provider and have instead used non-bank providers for financial services. As the digital first generation hits their peak spending years, the key for any organization to remain relevant is to offer transparency and better user experience. Customers expect rapid, seamless experiences as they navigate between devices and multiple online channels. According to Dimension Data Research, 84% of companies that work to improve their customer experience report an increase in their revenue. It also helps in changing the nature of the customer journey by facilitating the large scaling of new services offering innovative personalized solutions.

So how do businesses satisfy this growing demand for customer experience (CX) with API technology?

• Secure Digital Advantage – Going digital can be difficult but once achieved can open an array of new opportunities. It can help create value for your business, build momentum and provide a competitive advantage. In a study from Kantar, it was found that financial institutions that lead in customer experience (CX) have a higher recommendation rate and a greater likelihood that customers will increase their portfolio of new products and services from their bank. Conversely, it was found that financial institutions that let their customer experience decline risk losing up to 12.5% of their share of deposits.

• Offer Marketplace Banking – Also known as the banking model of the future, ‘Marketplace Banking’ relies heavily on data collected by API to offer tailored products and experiences to the customer. It offers them better-targeted deals and services, using a single interface to switch between multiple banking providers. A potential shift towards the marketplace model is far-reaching: it puts customer needs at the heart of banking.

• Create Loyalty Through Customer Satisfaction – 96% of customers say customer service is important in their choice of loyalty to a business. The value of data can be felt today more than ever as businesses are ready to pay millions to comprehend what their customer really wants. A business’ policies or services may be the best in the financial services market, but if their customer experience is lacking, they may find themselves losing business to their customer-conscious competitors.

• Stay Agile and Open to Innovation – In addition to improving customer experience, it is critical for businesses to honour customer feedback and act swiftly upon it. According to a Trustpilot survey, it was found that customer service and reputation was the most noteworthy quality of a financial institution. Therefore, staying open to innovation and bringing in changes to the existing stream of services to fulfill customer demand is crucial.

While addressing customer experience is necessary for the financial services industry, it is also important to recognize that by embracing API technology, businesses are making a strategic choice. Choosing the right partner that satisfies their needs and offers an end-to-end value proposition is essential. It is important to perform due diligence by checking your prospective partners’ success in order to ensure a long-lasting collaboration. They must be compliant, with all necessary regulations and standards in place, for effective management and performance. Customers crave personalization and offering them just that must be at the heart of any financial service provider’s strategy going forward.