Reynaldo C. Lugtu, Jr. l September 1, 2023 l Business World
In the Philippines, the financial services industry is experiencing a profound transformation in its approach to customer experience (CX). Fueled by advancements in technology, changing consumer expectations, and a competitive landscape, financial institutions are reimagining their strategies to provide seamless, personalized, and convenient interactions with their customers.
One observable strategy of financial institutions is the shift toward customer-centricity. The traditional approach of financial institutions, characterized by bureaucratic processes and limited customer engagement, is undergoing a radical shift. Customer-centricity has become a guiding principle, urging organizations to prioritize the needs, preferences, and convenience of their customers.
This is coupled by the adoption of strategies on digital transformation. The proliferation of digital technology has empowered financial institutions to offer highly personalized services to their customers. Online banking platforms and mobile apps have become essential tools for customers to access their accounts, make transactions, and manage their finances at their convenience. Institutions are utilizing data analytics and artificial intelligence to analyze customer behavior and preferences, allowing them to tailor product recommendations and service offerings.
For instance, some local banks launched their “lifestyle” programs, which use transaction data to categorize customers’ spending patterns. This enables the banks to provide personalized lifestyle perks and rewards, enhancing the overall CX.
The emergence of fintech startups is also challenging traditional financial institutions to innovate rapidly. These startups often focus on addressing pain points in the customer journey that have long been neglected.
Several fintech companies offer digital wallets that allow users to buy prepaid load, pay bills, and transfer money. These platforms have gained immense popularity due to its user-friendly interface and its ability to provide essential financial services to underserved populations.
Financial institutions are likewise investing in improving their customer support services through digital channels. Chatbots and AI-powered virtual assistants are becoming commonplace, providing instant responses to customer queries, and assisting with basic transactions. This not only enhances efficiency but also ensures round-the-clock availability. Several banks have implemented AI-powered chatbots that address customer inquiries and provide information on services, accounts, and transactions.
What bodes well for financial services customers in the Philippines is the support of regulatory bodies such as the Bangko Sentral ng Pilipinas (BSP), which are actively working to enhance CX through regulatory measures. These measures aim to ensure transparency, fairness, and security in financial transactions.
For example, the BSP introduced the National Retail Payment System (NRPS), which promotes interoperability among different payment channels and helps facilitate faster, safer, and more convenient financial transactions for customers.
The BSP is also taking proactive steps to facilitate the adoption of open banking in the Philippines. The BSP’s Circular No. 1105 outlines guidelines for open banking and sets the stage for the development of a secure and standardized ecosystem for data sharing. Open banking dismantles the traditional model where a single bank holds all of a customer’s financial data. Instead, it allows customers to grant permission for their data to be shared across multiple institutions. This sharing of data empowers customers with more choices and enables them to access a wide range of financial products and services from various providers, all within a single interface.
While significant progress has been made, challenges persist in delivering a consistently exceptional CX. Cybersecurity concerns, data privacy regulations, and the digital divide are factors that need to be addressed to ensure that all customers can benefit from these advancements.
In the future, as technologies like blockchain, biometrics, and advanced analytics continue to mature, the potential for even more seamless and secure customer interactions in the financial services industry will expand.
The financial services industry in the Philippines is indeed undergoing a remarkable transformation in its approach to CX. Digital transformation, fintech disruption, personalized services, and regulatory measures are all contributing to a more customer-centric landscape. As financial institutions continue to innovate and embrace technology, the future holds the promise of further enhancing CX, fostering financial inclusion, and ultimately shaping a more accessible and efficient financial ecosystem.
*** Reynaldo C. Lugtu, Jr. is the founder and CEO of Hungry Workhorse, a digital, culture, and customer experience transformation consulting firm. He is a fellow at the US-based Institute for Digital Transformation. He is the chairman of the Digital Transformation IT Governance Committee of FINEX Academy. He teaches strategic management and digital transformation in the MBA Program of De La Salle University. The author may be e-mailed at rey.lugtu@hungryworkhorse.com