With new competitors on the horizon, the best bet for traditional banks is to give people what they want.
Until recently, the banking sector was not known for its willingness to embrace innovation. That's changing fast. In response to evolving customer expectations, competition from established technology companies, and an endless stream of well-funded and nimble start-ups luring customers with innovative digital solutions, institutions of all sizes are reimagining their approach to customer service and the role of technology in delivering their products and services.
That's great news for customers who have become accustomed to the rapid adoption of technology in other industries like online retailing. Regardless of the channel, that exposure puts the pressure on financial institutions to step up their use of technology and their ability to deliver personalized interactions while also providing seamless account access and a full range of services.
So in the face of shifting customer expectations, what changes can we expect to sweep the sector in 2019? And how can a bank with an interest in bolstering its competitiveness accelerate its use of technology and its ability to attract and retain increasingly demanding customers? Here are four changes we believe customers want to see in 2019 as well as guidance on how banks can make them happen.
Sell to Me Like You Know Me
One of the fastest ways to alienate existing or prospective customers is to promote something they don't want. Through digitization, which allows technology to be embedded in every aspect of the customer service experience, banks can unleash the power of personalization.
As the name implies, personalization is the opposite of a one-size-fits-all approach. Instead, a company markets a product or service tailored to specific individuals or customer segments. Rather than blanketing every customer with the same message, personalization relies on a data-driven approach, designed to create messaging that will resonate with individuals and encourage action. For example, if an individual is a part of a group whose accounts show purchases for baby products, when that customer next visits their bank website, the messaging and images could highlight how the bank can support the financial needs of a growing family.
A recent Mastercard-sponsored report from the Harvard Business Review Analytic Services included a detailed discussion of the benefits of personalization as well as best practices. When surveyed, 90% of respondents said that customers expect businesses to anticipate their needs and act accordingly. For banks, that requires an understanding of which metrics will best capture, analyze and evolve the role of personalization in the sales process.
Let Me Access My Account When and How I Want
The ubiquity of smartphones makes mobile banking the preference of millions of customers. Nonetheless, regardless of the channel they choose, they still expect a seamless experience.
In an omnichannel model, every touchpoint, be it online, mobile or in the branch, should provide a customer with access to the services they need, but with a consistent brand experience.
In spite of the dire predictions of their demise, there is still a role for physical bank branches in an omnichannel model. Innovative banks see their branches as a complement to their push to digitize operations. Instead of staffing branches with employees whose primary role is to process routine transactions, many leading banks are increasing their investment in branch-related technology like self-service kiosks.
Access to a digital channel in branches allows for a consistent customer experience. It also releases employees from routine tasks by allowing them to focus on higher touch, more involved transactions and services requiring greater sophistication. So, instead of replacing it, going digital allows a bank to reposition the branch and deliver face-to-face personalization.
Advise Me on Major Financial Decisions
At nearly every stage of adult life, individuals must make important financial decisions. Whether financing a house, purchasing a car or selecting the best retirement plan, advice is often needed.
Through the segmented data generated and recorded in customer accounts, banks typically have all the information they need to develop tailored recommendations.
To provide such advice, some organizations like the Spanish bank BBVA have created dedicated apps to help customers manage their personal finances. In addition to providing customers with an innovative platform to analyze their own situation, the app also allows them to benchmark themselves against other anonymous customers of similar financial standing.
Protect My Money and Identity
A recent article suggests that younger people do not trust traditional banks as much as new financial technology companies. With this in mind, it's even more important for a bank to be able to protect every customer's personal information and their money.
Banks must strike a balance between delivering sufficient security and shifting the responsibility to the individual account holder. Banks must also deliver a consistent security experience by ensuring the protocols for specific transactions do not vary significantly by sales channel — with the exception, of course, of risk factors like a new mobile device.
As alternatives to traditional models emerge, banks must embrace technology at every stage of the customer lifecycle as a means of streamlining processes and delivering a consistent and engaging customer experience.
Ask Grayson Clarke
Questions on this article? Reach out to Grayson Clarke to learn more about the changes that customers want from their banks.