Ed Obrien
Ed O'Brien May 23, 2017

Gaining experience with customer experience: Advanced digital banking is key to improvement

More banks and credit unions are embracing digital banking: the convergence of online and mobile banking, and often part of a broader banking strategy to more fully engage banking customers.  And it has become critical to the success of today’s retail financial institutions as consumers are used to—and increasingly expect—unified buying experience. All this comes thanks to omnichannel retailing, with many financial institutions offering innovative initiatives that enable customers to choose how, when, and where to bank. 

The ath Power study reveals that digital banking continues to grow beyond its roots as a self-service transaction solution. It’s also now a full-featured planning and action-oriented financial services tool to service a wide range of banking customer needs. The report also identifies areas where financial institutions and FinTech partners potentially fall short in meeting those needs. 

This can prove a particular challenge for FIs, as they have amassed so much customer data and are considered the most trusted provider of banking services. Yet many have done relatively little to leverage this information to better serve customers vis-a-vis evolving digital banking and broader financial services. 

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While survey results show that banking customers are eager to bank with institutions ready to meet and exceed their needs, many FIs fail to deliver. In fact, some perform poorly. The reality is that much more needs to be done if FIs wish to champion their customers and members—and become true digital banking leaders, expanding beyond basic account information and services.

The study also discloses that sophisticated customers—not banks—lead the way in setting the bar for exceptional digital banking that embraces technology in all forms.  Even though two-thirds of respondents say they are very satisfied with their current digital banking solutions, these results dropped from 73 percent in our previous survey. Yet abundant opportunities for improvement exist, as financial institutions possess the power to address sub-par satisfaction levels. 

Aside from heightened expectations by digital-savvy users, much of the decline stems from the inability of FIs to capitalize on foundations they’ve built with their digital solutions. In many cases, they need to move beyond basic functionality: to embrace and improve capabilities important to their customers and members, many of which transcend traditional consumer banking. 

High satisfaction exists with basic features that include checking balances and transferring money within their institution; both received an 80 percent-plus positive rating in the study. Yet satisfaction with higher-level features that promote deeper interaction and engagement often falls flat. This stems from areas such as:

  • Transferring funds to accounts outside an FI
  • Determining whether a check has cleared
  • Mobile remote deposit, and
  • ATM/branch locators 

In each example, about a third of respondents were less than satisfied, indicating lost opportunities for many institutions that could possibly pique customers’ interests in other providers.

The most sought-after digital capabilities go well beyond simple transactions. These now include access to higher-level features that empower banking customers to more fully engage with financial institutions. But the potential disconnect between banking customers, their needs, and digital features available to them, reveals itself when they sound off on important functions and desired advancements. Outside of convenience and security elements, respondents place great emphasis on features such as:

  • Mobile payments at merchant point-of-sale using digital wallets
  • P2P payments
  • Coupons, and
  • Reward capabilities 

This leads to a sobering finding: Almost three in ten study respondents indicate they are either very or somewhat likely to switch institutions over the next two years.

Thus offering advanced digital capabilities is critical for financial institutions. The report findings show how a well-designed and implemented digital banking solution correlates directly to increased banking customer interaction, engagement and loyalty. A comprehensive, easy-to-use consumer digital banking platform is a must for institutions that look to grow, expand—and defend—their client base. 

Without such advanced digital capabilities, FIs risk watching market share erode. And perhaps not so slowly. In an age of AI and FinTech, digital technology now advances at breakneck speed. It’s a random bet at best to expect customer needs and wants will do the opposite.

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Ed O'Brien is EVP, research and strategy, for ath Power Consulting, a premier provider of research and customer experience solutions for the financial services industry.

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