The Competition and Marketing Authority (CMA)’s “Open Banking Revolution” promises challenger banks a golden opportunity to steal business from their more established competitors, thanks to their supposedly more modern approach to technology and customer services. However, challenger banks are missing an open goal by making the same customer service mistakes as the old guard, GMC Software has warned. While challenger banks focus on customer service and offering modern services such as mobile apps, their services have been delivered in a fragmented manner. Like their monolithic forebears, this leaves them unable to respond to customer needs in an agile and coordinated manner.

“The CMA’s Open Banking Revolution announcement should have made 2018 the year challenger banks broke into the mainstream, but that just isn’t going to happen unless they act now to get their own houses in order. In fact, if they continue giving a poor customer service experience, the challenger banks might even begin to lose ground as the traditional players take action to meet the new rules and regulations,” said Dave Webster, Financial Services Specialist at GMC Software. “After all, making it easier to compare and switch banks only favours challenger banks if they can demonstrate the improved customer service and forward-looking approach that differentiates them from the competition. If their customer communications does not support this, challenger banks will bring themselves down to the same level as their predecessors, meaning the only differentiation will be in cost or special offers; areas where it’s much harder to compete.”

The CMA is implementing a wide-reaching package of reforms, including a new regulator, increased use of technology, and greater requirements for banks to share information with their customers, designed to increase competition and the opportunities available to both banks and consumers. Whether banks are communicating with their customers face-to-face, by mail and phone, or over a mobile app, consistency in content and message is crucial. While supporting their rapid growth, challenger banks have had to implement different customer communication solutions from different providers, installed by different contractors, and each using different customer data and content. Much like their traditional competitors, this has created silos of data and content that cannot interact with one another; adding costs by replicating tasks, content and data and creating a lack of consistency in customer communications. Customers cannot continue a single conversation across multiple channels; the organisation may use different, and confusing, messages and content with customers when it reaches them over mobile, email or post; and incomplete data means that organisations may well repeat communications with customers or fail to reach them when it needs to.

“It’s not too late, either for challenger banks or their larger competitors, to break down these silos and ensure they have a unified approach to their customers,” continued Webster. “This doesn’t mean reinventing the wheel, or tearing down the entire infrastructure and starting again; organisations instead need a way to combine and unify all the data and content they have. Most importantly, banks need to learn from this experience and ensure that, when new channels are added, data and content are united. Otherwise, they will see the same problems rising again and again.”