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How to help your customers eliminate the go to the bank from their to-do list

When most people think about the term “Bank” they probably envision a retail branch with long queues, behind a rope waiting to seek the services of a teller or branch representative. Well those days are becoming more and more obsolete, as Gen Y and Millennials are seeking convenient, innovative, digital means of banking. 

Banks need to elevate their game if they want to compete against the Neobanks by restructuring their organizations around how to provide flexible solutions to consumer needs instead of the traditional methods, which often meant working with isolated teams that worked within defined product mandates.

In the recent years, banks have tried to be more accommodating by unbundling banking services and improving their front end for retail customers via better customer care, new branding and pricing models.  They have also started to change their business model from revenue driven to data driven and developing new services around real time payments.  Additionally, they have adopted mobile technology – built bank apps and have enabled some digital banking services – and yet it’s still not enough.  There is more the banks can do, to further improve the customer experience.

Banks in future, or to be precise ‘Banks of the future’ need to let go of their customers (not literally of course). What I mean is less hand-holding by providing more self-servicing capabilities. With fingerprint readers embedded in smartphones, card readers via NFC technology, and other new and emerging financial technologies, which ensure privacy and reduce fraud concerns, banks can empower their clientele with increasingly innovative technologies to facilitate the customer experience and improve customer satisfaction.  Here are a few ways that can help the modern banks accomplish just that:

  • Add digital payment options to mobile banking services to cut through standard banking red tape.
  • Improve the Kiosks channels to do most of the functions with intuitive and easy to use steps for transaction processing
  • Rather than compete with FinTech, learn to partner with them. Integrate with start-ups and fintech.  Set up independent innovation labs that thrive on making customer experience with banking institutions contactless.
  • Learn from Neobanks on how to provide digital and mobile first financial solutions, payments, money transfer, money lending and more.
  • Amalgamate with social media payments to complete peer-to-peer transactions using virtual accounts at front-end, while keeping the banking information centralized to itself.
  • Improve the physical card segments by completing transactions internationally without the need of card upgrades or getting a new card altogether when transacting across borders. Working on approaches like One Card for all transactions globally will take time and a lot of infrastructural and integrational changes, but the idea is not unlikely, considering a decade ago no one would have thought of sending money via Facebook or Twitter.

Indeed, technology will remove much of the face-to-face bank-customer interactions, which will be a convenience for customers, however, this may negatively impact customer loyalty.  As it will be easy to open a new account at another bank, it will be easy to download a new app and it will be easy to walk away.  As with any new approach, new problems will also arise, understanding the impact of these new solutions will go a long way in minimizing the impact to your customers and make the transition seem worthwhile and seamless.

 

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Comments: (3)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 16 March, 2020, 17:48Be the first to give this comment the thumbs up 0 likes

Sorry but, for reasons I highlighted in Secret Of Survival Of Bank Branches, "eliminate go to the bank" is tantamount to elimination of new product sales. Since no bank would like that, Branch And Digital Channels Will Coexist Forever.

John Burgos
John Burgos - Mindgate Solutions | www.mindgate.us - Boston, Massachusetts 19 March, 2020, 14:03Be the first to give this comment the thumbs up 0 likes

Hi Ketharaman, 

I will agree with you that some traditional banks may always want to have both a digital and branch channel available. However, it wont be because of upselling limitations, as you pointed out in your 2015 blog. Digital capabilities have vast improved since your blog. All you have to do is to look around for you to see all the Neobanks that have popped up just in the last year to see that the new model for a bank is to be all digital.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 19 March, 2020, 18:03Be the first to give this comment the thumbs up 0 likes

Digital has improved but that's only a necessary condition but not a sufficient condition for mainstream adoption of "all digital" banking. My posts may be old but the assertions I made in them have even more backing today than when they were published 3-5 years ago. 

Let me quote some recent research about the banking industry in USA and UK: 

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Why Millennials and Gen Z Love Megabanks

You'd think younger consumers would be heavy users of digital-only banks. Not so according to research, which reveals a surprising demand for in-person support. For now, the big four U.S. megabanks dominate — not just with Millennials and Gen Z, but among all generations.

In total only 4% of Gen Z respondents have bank accounts with digital banks.

“The main obstacle holding [consumers] back from opening an account with challenger banks … was the lack of physical branches, with 37% agreeing that banks without any branches was off-putting.”

The research found that Gen Zers want face-to-face service alongside tech-led channels from their banking providers. 

"Better in-branch experience and service" is the #1 reason why people choose their primary banking provider.

Neobanks in USA have only 7M retail deposit accounts (Source).

"Despite the launch of half a dozen new banks in last few years, largest legacy banks still have 77% of UK market now vs. 69% in 1999." (Source). 

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Sorry but, based on the above data, the "no branch, all digital" model is snakeoil. 

Not just personal experience and anecdotal evidence but solid research is now available to support my years-old contention that branch and digital channels will coexist with one other for the forseeable future.