Can Banks Ever Meet Customer Expectations?

Today's connected customer expects more of their bank. Whether they are consumers or businesses, they want an Apple- or Amazon-like experience.

This represents both an opportunity and a challenge of epic proportions for today’s banks. In this and future blogs we will explore how banks can deliver a distinctive “native digital” experience across all of their channels.

Based on my experience as a 30-year banking veteran, I have debated with many banking executives about how best to make this essential transition to a more nimble customer strategy.

Evolve quickly or lose market share

Consumers have changed. So have business users. A “connected banking” arms race has begun.

Most pundits and analysts agree that customer expectations are evolving, and that as a result customers are becoming less satisfied with their banks. Banks must adapt.

Banks have spent large amounts on customer-facing channels. Yet they are losing the race to keep up with customer expectations. The CapGemini Customer Experience Index (CEI) dropped in 2015, for the second year running. Even worse, the report finds that 50% of millennials consider themselves likely to change their banks in the next six months.

CapGemini and other analyst research find that banks have focused too much of their investment on customer-facing channels, and not enough on middle-office and back-office functions.

Fintechs and Digital Banks will continue driving innovation into the market, poaching customers left and right from the established banks. This is especially true for millennials, who are the most promising consumer growth sector. Remember too that business customer interactions with banks are increasingly being conducted by millennials.

The “connected customer”

Our world has become highly connected and that has radically altered our expectations of our banks. For millennials, the world has always been connected – they are the “digital natives”. Those of us who are older are “digital immigrants”. We think we understand, but we still remember and sometimes hanker after the old disconnected methods of email and (gasp!) letters.

“Most consumers in most countries would miss their phone more than their wallet” (Bain Consulting survey)

The figure below summarizes our research on 12 expectations of connected customers. What can banks do to meet them?

There have been some useful lists of emerging trends in customer expectations. For example Micah Solomon in Forbes, and Michele McGovern in Customer Experience Insights.  We will be writing much more about this in upcoming blogs. For example, the graphic summarizes expectations, but they are nuanced. For example “Know me” also means “don’t know too much about me” and “don’t share what you know with others”. They also have different implications for business as against consumer banking, and in different stages of the customer journey.

What can banks do?

The short answer is “a lot”. Banks are still very well placed to meet the needs of consumers and businesses. But it isn’t going to be easy.

Banks face many barriers, opportunities and imperatives.  This series of blog posts will explore some of them. We will ask how banks can understand and respond to evolving customer expectations. Here are a few of the questions we will address:

1. What do customers expect in the different stages of the customer journey? Interactions are different from initial marketing through sales, onboarding, fulfillment, servicing and closure.
2. How are consumers different from business customers? What do they have in common?
3. What are the biggest barriers that banks face? Categories will include technology, organization, culture and regulation.
4. How do banks need to adjust their technology strategy, in order to respond to today’s customers?
5. How does Fintech offer hope for banks? What will Fintech firms and banks need to do to realize that hope?
6. Banks and Fintech together need to set out on a journey now, to catch up with customer expectations. What is the roadmap?

I do hope you will join us on this ride!