The search for optimization in the banking business focusses on customer advice with its high costs. Digitizing consulting improves the customer experience, avoids errors and saves costs. We have dealt with credit advice in our product development and want to share UNiQUARE’s view on it. The question is: with or without advisors?


Background

Digital self-service without advisors is the dream of many (online) banks. ING Germany wants to make this dream come true in the credit process (finanz-szene.de/Paywall). Many customer advisors and bank customers still have a long way to go. There are many reasons why this is not simple. Some products are not easy to understand and not all customers are digitally astute. Some customers want advice because they value advisors as experts. Nevertheless, making consulting more digital is beneficial. It allows you to you use the advantages of digital processes. Ultimately, those responsible should consider what advisors are supposed to do.

Digitalization – not only that of customer advice – is also a strategic and differentiating component for banks. The banks consider what added value they want to offer their customers. They must ask themselves what they no longer want to do. We sat down with our customers and thought about what customer advice could look like in the future. On July 1, 2024, we launched a new product, the advice portal, on our SaaS financial marketplace Optio. It makes credit advice more digital. We want to use this product launch as an opportunity to share some of our thoughts with you.

Benefits of digitalization

People seek help from advisors for simple reasons. Banking requires expert knowledge because products are complicated and information about them is difficult to obtain. This means that customers must assess how much of their time and effort they want to ‘invest’. The problem is that the reasons are not always the same. They depend on the circumstances, the aims and the product. They usually want simple and low-effort processing. Advice serves a purpose. There are good reasons why consulting should be more digital than it currently is:

1️⃣ Improved customer experience: this involves considering what the customers need and what benefits the advice will bring them.

2️⃣ Avoidance of errors in processes: system breaks are potential sources of unnecessary errors.

3️⃣ Cost reduction while maintain quality: process efficiency and effectiveness improves when it is easy to examine the relevant content.

Opportunities to make consulting more digital

The possibilities of making consulting more digital are limitless. In software development, it is often about proportionality; about a return on investment compared to the previous arrangement. Where would we start?

▶️ Data entry: When (potential) customers disclose information about their situation, we are at the core of the consulting. All data should be recorded as simply as possible and only once. It should also be easy to use existing data, data from external sources, from the self-service in online banking, or from the financial center. It is of course most sensible to automate non-value-added activities (or to omit them altogether). For example, access to the account can shorten the conversation about the financial situation.

🔃Output processing: This is about the avoidance of media breaks and the maintenance of an integrated database. Data transfer is a potential source of errors. However, optimal advice requires having the collected data together. The connection to third-party systems may also be important to arrive at a suitable offer. For example, so called ‘valve solutions’, i.e. mediation with third-party banks, work only if there are links to platforms or network banks.

🎴 Supporting the arguments: This is about using the collected facts to objectify decisions in the consultation. These facts should be presented in meaningful graphics to support the argument. Artificial intelligence can evaluate data and recognize patterns much better than existing algorithms. An extreme case could then be a ‘Roboadvisor’, but the results must be considered.

🎭 Media changes and flexibility: Flexibility is important to be able to respond to the customer’s circumstances. This can be the location or the type of the consultation. Video consultation can help or a consultation via tablets. The must meet the need for simplicity and low effort.

Conclusion

We believe that not everything has to be digital. It is only what makes sense for the customer and for the bank. Advice should be optimally tailored to the situation and needs of the customer. Thus, there is often not one general solution. The banks must think about customer needs in different areas. The digitalization of advisory processes can bring advantages. Customers only enter data once and the bank stores them in a database. This allows customers and the bank to concentrate on the aims of the advice. In the headline, we asked: with or without advisors? Each bank must answer this based on its strategy.

We are interested in your ideas. What are your priorities in digitizing advice or is it already being implemented? Feel free to comment under the LinkedIn article or send us a message for an exchange of views. If you are interested in digitizing credit advice, we will be happy to send you documents about our new advice portal. Comment in LinkedIn under “Unterlagen Beratungsportal” or “✋🏻” .


Note: The creation of the images (DALL-E-3) and the revision of the text (DeepL Write) were supported by AI.