The Retail Customer Digital Journey

Customer interactions with financial services (FS) are increasingly digital. Inspired by other interactions, customers expect faster, easier and more tailored access to financial products. Customers now have a whole ecosystem at their disposal which they can navigate to “pick and choose” their FS products and providers.

FS firms need to respond to those heightened customer expectations so as to preserve or enhance their business. New entrants (“digital natives”) as well as incumbent firms are using, or experimenting with, Artificial Intelligence, Cloud Computing and Open Banking APIs to leverage the power of Big Data, and offer a better experience to customers.

The shift in focus from “product” to “people”, and from human-enabled to digitally-enabled, is taking hold, and takes firms into some nuanced regulatory and technological “hotspots” which require careful consideration and navigation.

• The use of digital channels, rather than, or in conjunction with, human interactions, raises new technology risks as well as challenges associated with the governance and controls around these technologies;
• The ease and speed of access to FS products mean that customers may be less vigilant when buying through digital channels, or assume that the products suggested to them online are knowledge-based and tailored to their personal needs. In this regard, they may be less attentive to the risks. Moreover, in a digital world, the human link to test and check the customer’s understanding of the risks is less present than in a traditional interaction. Therefore, the risk of customers buying FS products rapidly and easily, but without understanding the related risks, is heightened; and
• In a more complex ecosystem, the relationship between the various participants may be less immediately clear, and their respective regulatory responsibilities more difficult to identify and communicate clearly to customers.

Here we seek to highlight some of those regulatory hotspots around conduct risks, digital risks, financial crime and data protection. These arise from a customer journey facilitated primarily through digital channels incorporating new technologies, and replacing substantively the need for a human agent. The technological considerations are also key, as operational resilience and data quality directly affect the quality of the customer experience.

We further enhance this journey with the results of our YouGov survey, conducted in March 2019, where we surveyed a sample of 2,000 UK adults through a series of specific questions on their perceptions around risks and financial advice through a digital channel.