Why Compliance and Customer Experience Go Hand-in-Hand

The internet has redefined business in too many ways to count, but most importantly it has given every consumer a much louder voice than they ever before enjoyed. For any business that wants success, their business motto must be, “It’s all about the customer experience.” Now that the internet has become ubiquitous in almost every part of life, traditional brick and mortar businesses face a real threat from online competitors. In particular, banks face a new and significant challenge from emerging payment providers.

Thanks to social media, consumer engagement can have a major effect on the bottom line. While traditional banks aren’t experienced in building online relationships, emerging payment providers have a major advantage, as they come from the spirit of companies such as Apple, Amazon and Facebook. Unlike the culture of the financial industry, emerging payment providers understand the needs of their customers by embracing innovation, risk-taking and a fearless drive toward self-improvement.

Compliance and how you deal with compliance requirements are what ultimately sets the online finance industry apart from other internet-based industries. It is important to recognize and understand that compliance requirements should not upstage the customer experience, but rather be effectively integrated into that experience.

A Question of Allegiance

Until about half a century ago, computers were solely owned and utilized by the military and large corporations. Today, nearly everyone owns a computer – in the form of a desktop, laptop, tablet and/or smart phone. Many own multiple devices. People expect not only a seamless online experience, but also a personalized, interactive online experience from our financial providers, which includes perfect service quality and personal engagement. Technical expertise and the ability to experiment on the internet has allowed payment processors to achieve a confidence level with at least some consumers where these providers are now considered a realistic alternative to a bank. However, in this day and age, satisfying a customer’s functional needs to complete transactions successfully and securely isn’t quite enough, it is also important to develop an emotional connection to the internet user.

Loyalty is generated from ongoing, positive customer experiences. It is therefore very important to build a trusting and loyal relationship with your customer base through frequent, high-quality, personalized contact. Most banks today typically offer only generic and transactional services, which are neither personal nor reflective.

Too Much Security Can Deter Customer Loyalty

To have engaged, loyal customers who will act as brand ambassadors, you must meet customers’ needs without sacrificing security, as too many security prompts can hamper the customer experience. This means that how a financial services organization approaches the balance between security and usability can ultimately impact its competitive edge, its ability to innovate, and its profitability.

Overly aggressive security can be expensive and customers today do not want to be inconvenienced by false positives, and alienated by requests for too much information. Since offering a cumbersome security process will harm your online reputation and your business, it’s necessary to do away with anything that creates an adversarial relationship between the payment provider and customer.

I’m not suggesting that security is less important than customer experience. However, it is important to serve the customers on their own terms, so it is pivotal to take steps to inform your customers that security is a necessity, while still ensuring that the level of security/steps required feels reasonable. It is important for your customers to understand that security and usability are designed to be in balance.

Staying Ahead of the Curve

As new and dynamic payment alternatives are becoming more feature rich at addressing everyday customer needs, traditional banking is suffering fro new, aggressive and innovative competition. So the question is: how do you market a product in today’s world where the consumer controls the story and you can’t directly influence buying decisions?

The solution is to make sure your customers walk away satisfied with your product, price, and “personality.” It is pivotal that your customers are aware of what security steps are needed without threatening the privacy of your internal processes. In addition to stay one-step ahead, make sure you always put yourself in the customers’ shoes in order to understand their needs, behaviors and emotions and most importantly, master the balance between compliance and user experience.

Last but not least, make it a priority to be available and engaged with your customers. Engagement is about having the flexibility to assemble the right information and functionality to provide a seamless online experience. Customer loyalty is essentially all about providing an easy, relevant and secure personalized experience for your customers.

Ferhan Patel is Chief Compliance Officer, Director of Global Risk and Compliance for Payza