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How Digital is Redefining the Banking Experience

Few industries have been affected by technology disruption as much as retail banking. Despite banks having the reputation for being “slow to change”, it is phenomenal how fast the industry is evolving. In addition - however - for the more established banks, transforming to serve the changing habits and requirements of today’s consumers continues to pose challenges, while also creating new untapped opportunities.

To emphasize how important the key technological trends and advancements are, you only have to read the 2017 Retail Banking Trends and Predictions report from industry expert Jim Marous of The Financial Brand.

It surveyed over 900 financial institutions and concluded that 54 percent of respondents believe that removing friction from the customer journey is the number one priority for banks to improve on this year.  And, while customer service has and always will be important, how do banks actually deliver on the imperative to remove friction from the journey and deliver a better customer experience?

Reshaping the customer journey:

To quote The Financial Brand, “Financial institutions need to re-imagine their core journeys from front to back by addressing key customer pain points, identifying new opportunities to delight customers in differentiated ways.” Today, the clear-cut way to differentiate is through mobile.

To put this into perspective, consider the report by the BBA that found that consumers are using mobile banking apps more than 7,610 times a minute and over 4 billion times a year. Further, almost 70 percent of those who own a smartphone now prefer conducting their banking transactions with it. Additionally, in the US, there are around 75 million millennials, all digital natives, and coming of age. This age group has higher expectations for personalised and on-demand access to services.

Internet and mobile banking is preferred:

Another reflection of how these changes have affected banking institutions is in the case of HSBC. This global bank has reported recently that it will shut another 62 branches this year in the UK. This is on top of the 55 already planned for closure, in a move caused by customers increasingly managing banking through the internet and on mobile phones.

Four ways to improve the customer journey:

Clearly mobile has an important role to play, and while most companies appreciate the importance of measuring the impacts of customer engagements and improving them, solving the need is still challenging. So, with mobile in mind, how can banks remove friction and improve the customer journey? What four key areas should they consider as they strive to improve the banking experiences for their customers?

Improve new account opening and on-boarding experience:

Customers want to be able to apply for an account and fund it, without having to take time out of their day to visit a branch. Typically, it is common for customers to start this process and then abandon mid-stream. This becomes a lost opportunity for the bank.  Whilst doing all the work to acquire a new customer, many lose them to a competitor which provided a simpler customer journey. So, ensuring this on-boarding process is straight-forward and simple is critical.

Consider user-friendly authentication:

Customers understand the importance of security. But, they don’t want it to get in the way of their experience. Technologies like fingerprint readers (Touch ID), facial recognition, and iris scanning create an added layer of security that is non-intrusive for the customer. These can be used for initial authentication or as a form of “step up” authentication for riskier transactions such as large money transfers.  Banks should explore implementing them as they create the peace of mind required to put security fears at ease for mobile banking users.  It could also be a reason for new users to finally adopt mobile banking.

Embrace the rise of the bots:

Last month, we saw the introduction of Cleo, a chatbot made to handle text-based conversations with banks across text message, Facebook Messenger, Amazon Alexa and Google Assistant.  After scoring investments from big names, such as, the founders of Skype and Wonga, chatbots will become even more prevalent with the adoption of technologies such as Siri, Google Assistant and Alexa.

Further, implementing bot technology offers banks opportunities to cut costs, scale up, and offer customers a personalised, always-on service wherever they are. More than ever, it is important for banks to message the right offer to the right person at the right time and across the right channel.

Embrace cross selling:

Cross selling can be a highly effective tool for growing the bank’s business and forming better relationships with customers. Cross selling can also enable a bank to acquire new customers and improve customer lifetime value. Importantly, it also demonstrates that the bank is aware of the customers’ needs and care about their satisfaction and overall experience. With unique capabilities such as geolocation, mobile, as a channel, offers banks the perfect channel through which to do this. Its importance is underrated and banks need to evaluate how they can embrace the mobile moments that they have with customers.

With over 2 billion mobile users expected to use mobile banking by 2020, customers will expect a new level of personal banking whilst also on-the-go. Not adapting to these customer demands and changes in habits could potentially mean losing out to competitors. Therefore, improving the customer experience by reducing friction in the customer journey is paramount to success. 


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