Banking is an age-old industry built on relationships and trust: face-to-face interactions in particular. But in the digital age, banks need to reinvent themselves and rethink customer interactions. It’s no longer what you can offer. How you present your offerings ranks just as important. Those that engage customers to the full will win. Be it banks, fintechs or credit unions, organizations that fail to attract a consumer’s attention can’t compete in this new landscape, let alone succeed.
Thanks to Google, Amazon and Uber, newly enlightened and empowered consumers expect instant, on-demand services based on their preferences. They now demand the same from their banks and financial institutions. Customer experience is now the prime differentiator and the turf war for all-important consumer attention has shifted the balance of power between service provider and consumer: It now rests in the hands of the latter.
This raises an all-important question: What do your customers want in their financial engagements? If banks want to keep existing customers and attract new ones, they must work to understand them; customers want meaningful engagement. Gone are the days when banks could just throw extra functionality at consumers. Significantly better informed, they expect value for their money and relevant features. Here are five ways to deliver that value and win them over.
Recognize their personal milestones
In this digital world, many of the connections we make—business and personal—are anonymous. So it’s ironic that consumers need personalized experiences and functionality tailored to their needs. Ubiquitous online banking services aren’t enough. So how well do you know your customer? Did they just get married, retire or start further education? Offer the right products to ease those transitions: relevant ones that solve a problem. Gimmicks and glitter won’t cut it.
Financial institutions possess the tools to redefine the banking experience for their customers; to interact in real time in convenient ways. Wouldn’t you want your bank to guide you towards informed decisions about your future, leading you to better financial health?
Make your digital easy to use
Digital innovation may not do your customers an immediate favor. Rachel Botsman, lecturer at University of Oxford’s Saïd Business School, says: “When you’re asking a customer to do something different—for example, to use an online banking app—that’s a ‘trust leap.’ Many companies underestimate how hard it is to get customers to leap.”
How many times have you searched a website or app and struggled to find what you need? How long did you spend looking for it? Probably not very long. In this culture of instant gratification, users simply abandon the search and take their business elsewhere. A banking app or website must be usable, intuitive, simple to use, capable of quick navigation, and if possible, fun.
Oh, and limit the number of hoops; consumer tolerance is limited for how many they’ll jump through. They expect instant answers with minimum friction. Call it a function of our social media age but customers have an “always on” mentality and expect the same from their bank: whenever, wherever and however. Otherwise, expect them to grumble “Whatever.”
Fight fraud and friction with fintechs
Unfortunately, internet banking’s rising popularity has also meant an increase in digital fraud. Not long ago, social media had better authentication security than banks. Now consumers expect banks to put a premium on security and stay several steps ahead of enterprising fraudsters.
Consumers want banks to treat their hard-earned money right and do their utmost to safeguard it. For all the challenges that poses, many fintechs have negotiated the fine line between security and easy user experience. Hence, partnering with a fintech with this technology in place will enable banks to quickly and cost-effectively up their security game while enhancing the user experience.
Build trust in good times and bad
Consumers must be able trust the financial guidance banks give them and know the information they receive serves both their and the bank’s best interests.
Consumers also want to trust that their bank will stick with them through good and bad times. It’s all very well when a bank supports a thriving business—but what happens when circumstances get tough? Good relationships are all about give and take.
Take charge of excessive charges
Another major grumbling point with consumers centers on all those little hidden bank charges, which when added up aren’t that little after all. Complete transparency and zero surprises will go a long way in winning customer loyalty (along with loyalty rewards, of course).
How crucial is this? BAI Banking Outlook data shows that in terms of customer acquisition, millennials and Gen Xers list lowest fees (42 percent and 43 percent respectively) as their top priority by far. For baby boomers, it finishes just behind best rates and products, at 36 percent. Banks that ignore annoying fees do so at their own peril.
Bank of America has taken its consumers’ experience to heart. It recently announced new features for Erica, its AI-driven virtual assistant. (Bank of America’s Erica was a People’s Choice winner at the 2018 BAI Global Innovation Awards.)
Erica was designed to evolve with its users, and its new features are based on user behaviors and feedback. “When we piloted these new offerings, we received overwhelming feedback,” says Michelle Moore, outgoing head of digital banking at Bank of America. (Listen to her interview on the BAI Banking Strategies podcast.)
Erica helped consumers save a significant amount of money; for example, “Erica alerted them of unwanted subscription charges they did not even realize they had.”
Putting it all together: The wait—literally—is over
Remember: No consumer banks in a vacuum. It’s part of a too-full schedule that might include getting through the work day and helping the kids with homework. They’re grateful that online shopping runs take five minutes or less; they loathe long hold times, time-wasting sales pitches and baffling reams of paperwork.
There simply isn’t time for all that. They’re waiting for their banks to catch up. The question is, how long will they wait? That hinges on how long bank will wait to pull the trigger on customer experience strategies that work.