Boosting Profitability and Enhancing Deeper Customer Engagement with Conversational Banking

By Marina Bolfan, Senior Customer Growth Executive at Infobip Nigeria

Nigeria’s banking sector is becoming increasingly more competitive. This is especially the case within the digital banking space where traditional banks not only have to compete against each other in the use of cutting-edge technology to deliver better financial services, but also having to contend with emerging fintechs driven by the need to accelerate financial inclusion.

Marina Bolfan, Senior Customer Growth Executive at Infobip Nigeria

For financial institutions to maintain a competitive edge, it is becoming crucial to embark on a deeply rooted customer engagement strategy that will enable them to create strong and long-lasting relationships with their customers. Today, modern customers have various options at their disposal and are willing to switch to another bank should they feel dissatisfied with the Customer Experience (CX) at their current financial institution.

On the other hand, customers who feel connected with their bank are more likely to remain loyal and will even recommend the bank to other users. Loyal customers are also more likely to use banking services regularly and to try out new products and services. This ultimately leads to greater revenue generation and profitability for the financial institution.

As such, key stakeholders within the banking sector have come to the realisation that value innovation from a customer experience perspective is required, where new tactics to improve banking experiences from an end-to-end customer engagement viewpoint should be adopted to facilitate the launch of new business models backed by analytical insights.

New communication channels

Considering the current landscape, banks that continue to use traditional or conventional digital channels of communication such as SMS, USSD, email and mobile apps, are placed at a disadvantage and are less likely to gain a lead in the market. Instead, the rise of digital banking is prompting banks to focus on new communication channels that will tie their customers to them through enhanced experiences, that result in a better CX. While traditional channels will still remain part of the banking landscape, banks must provide additional banking channels and customer engagement platforms to compete in today’s market.

Part of this strategy is for banks to provide conversational or chat banking that takes offline banking online by enabling customers to interact with chatbots, voice assistance systems, human agents, and online chats that can provide personalised advice without customers having to visit a branch. Conversational banking enables banks to shift towards hyper-personalisation, automation and 24/7 availability, which can be harnessed to deliver personalised and seamless experiences while also driving cost efficiency for the business. This results in improved CX and drives business growth, which is ultimately every bank’s main goal.

Rich Communication Services

Rich Communication Services (RCS) is a channel that is becoming integral to conversational banking. While still relatively new to Nigeria, RCS can be seen as an upgraded version of SMS, complete with the rich features of a chat app. Rich features include images, videos, and audio files that can be seen in RCS messages and that provide a more engaging and personalised experience for customers. RCS offers a wide range of features that can improve CX, including interactive functionality that enables customers to make bill payments or balance enquiries, while providing privacy and security through end-to-end encryption.

The main value of incorporating an RCS channel is that it yields better customer engagement, increases trust and builds long-term customer relationships. By sending RCS messages, banks can ensure that customers gain higher visibility of their brand, while also presenting new offers and campaigns in a more effective way, such as information about loans, changing interest rates or new credit cards. Banks can also use RCS to send notifications or useful reminders about card activations or payment instructions.

While RCS is new to the local market, the opportunities it presents are huge and use cases will grow exponentially as the channel gains traction. Conversational banking should ultimately provide a seamless flow of conversation to ensure positive CX and manage a host of complex transactions that will lead to a deeply rooted engagement that translates into a long-term relationship between a bank and its customers.