In today’s ‘age of the customer’, focus on customer experience (CX) has increased continuously. According to a Walker study, by 2020 CX will overtake price and product as the key brand differentiator. However, the highly regulated and complex financial services industry is lagging in implementing the changes required to meet evolving customer expectations.

A Digital Banking Consumer Survey by PwC highlights the rapidly changing behaviors of digital banking customers.  The results showcase the rise of a specific group that PwC referred to as “omni-digital.” This segment uses only digital channels for banking, avoiding traditional physical channels and call centers. The research found that 46% of consumers use only digital channels today, up from 27% four years ago.

The digital-savvy segment, millennials will move away from a bank they aren’t satisfied with. According to research, 1 in 3 millennials are willing to change banks within 90 days, while another found that 33% believe they won’t need a bank at all in the future.

Banking in the future will be all about managing customer relationships and building good customer experiences at every interaction. Banks can rise to these new challenges by giving customers the seamless experiences they expect. 

Digital experiences and expectations are being set by industries other than banking. Why wait for a cab, when an Uber can be hailed instantly. The impact of Amazon’s one click ordering on the shopping experience can’t be overstated, while FedEx’s speedy delivery and precise tracking has made shipping via the US Postal Service frustrating. It’s important for banks to understand that consumers are no longer only comparing banks to other banks to judge customer experience. They are comparing financial institutions to the Amazons and Ubers. 

Much of the discussion on digital transformation has focused on mobile banking, however, it’s important to see how many consumers are using digital tools. A report by Celent found that only 27% of banking customers have downloaded banking apps. Even among the biggest banks, it’s only 38%, leaving a lot of room for improvement. Banks need to adopt a proactive approach to connect with today’s digital customers, who are less reactive.

As an example, Citizens Bank explored an option when they witnessed a sharp decline in their student loan application process. The process required a lot of communication between applicants and the bank, and Citizens responded to this challenge by implementing a technology that connected every applicant to a 1:1 mobile communication channel. The new channel was also plugged into their CRM platform, triggering messages automatically. Implementing this digital strategy by Citizens resulted in a 10% increase in completed applications, with customers completing them 40% faster. The bank also got digitally connected to 88% of their student loan applicants.

To succeed in this digital era of heightened customer expectations, banks need to make customer experience their top priority to engage the ‘connected customer’. They must invest in channels that enable one-to-one, relevant and proactive communications, giving customers the personalized experience they demand. The focus must be on making it easy for consumers to get what they need, whenever they need it.