How banks can leverage their digital experiences to stay competitive
During the pandemic, entire industries experienced seismic shifts in the way they operate towards almost all-digital businesses. One sector in particular to which this applies is banking. Banking has traditionally been viewed as a legacy industry that can be slow to respond to changes in society, but it is also an essential service that most people cannot do without. As such, the digital experience offerings of banks are increasingly important in the context of the post-pandemic world.
Due to the pandemic, more people were online than ever before. For example, more than twice as many retirees said they made their first online purchase in 2020. The pandemic has accelerated a trend already underway in the banking industry, with those most dependent on physical branches finding themselves in a more precarious position. Covid-19 meant that across the world many bank branches have had to forcibly close and continue to close.
KPMG suggested the lockdown was in fact a catalyst for change. Banks like ING were already starting to transform the traditional branch into something different. The new identity of the physical bank branch could be more like a service desk, where people can access a range of financial and non-financial services. With most physical branches sometimes forced to close in 2020 and 2021, banks have had to step up their digital experience offerings in a very short period of time.
When the pandemic struck, it was the financial institutions that had already invested in digital transformation that had a foundation that enabled them to quickly adapt to market opportunities and challenges. Banks and credit unions that had access to real-time customer data were able to integrate personalization tools into their marketing platforms and scale new digital products and experiences, giving them a competitive advantage.
The importance of leveraging an omnichannel platform
One problem that presents itself within the digital experience ecosystem is that there is a growing expectation that it should be fully transparent. Currently, only a very small proportion of banks have an omnichannel banking platform.
Customers are demanding more and more – they expect the same experience across many different channels. In our recent survey, it was found that promoter net scores drop dramatically if customers are forced to change channels during the same journey, such as opening a bank account. While journeys can be started and ended digitally, Net Promoter Scores stay high and customers stay engaged. Banks should strive to integrate these channels and processes together, to create a blended customer experience journey. This will prove crucial in the years to come and, as such, it will be essential for banks to integrate digital experience platforms capable of doing so.
Be able to start your customer journey from anywhere
Not only do experiences have to be fluid every time they are viewed, there is also a growing appetite for them to be completely accessible and familiar no matter where and when the customer may begin their journey. With the plethora of devices that are now owned by the average consumer, customer journeys can begin across many different devices such as tablets, phones, desktops, and smartphones. If a consumer is banking on a device, be it a computer or a phone, or even in person at a branch, the experience needs to be consistent and contextual based on both the relationship. established and consumer behaviors over time.
Tech companies have firmly established their digital offerings, ensuring that every time a customer chooses to engage with their service, they encounter a familiar experience. This set a high precedent of expectations that banks and other businesses must now follow. The key is to ensure consistency across different channels, while being mindful of responding to individual preferences simultaneously.
Integrate physical experiences into the customer journey
While it’s important to streamline and modernize their digital experience processes, banks don’t have to completely abandon their physical branches. They should focus on integrating their physical services as part of this new omnichannel mix.
Physical branches are still an important part of a bank’s point of contact with its customers. Aside from those who are uncomfortable with digital interaction, these are mostly more complex processes, such as mortgages. In fact, the main reason is that banks have traditionally not offered these services digitally because the processes were just too long and complex. In other words, rather than the “preferred channel” for consumers, the branch office is often the required channel. There is a renewed demand for this type of complex service to be offered digitally. However, to be successful in this regard, banks should try to adopt an intuitive and efficient format.
The emerging threat of fintech and challenger banks
The pandemic has put enormous psychological pressure on the population – 36% of people suggesting their finances in relation to Covid-19 are causing them the most mental stress – consumers are looking for providers of banking product solutions who can save them money. time and money. This means that the willingness to buy financial services from large tech companies with seamless digital experience offerings, rather than from financial institutions, is likely to increase; especially among young consumers.
The biggest concern, perhaps, for traditional banks is that many of these tech companies consistently achieve higher satisfaction ratings, especially in emerging markets. As pure-play tech companies, fintechs, and other non-traditional vendors gain popularity, it will be harder for retail banks to catch up if they don’t start investing in their digital experiences now.
Providing a great customer experience is the main competitive advantage of any post-Covid institution. Today’s customers demand smooth customer journeys and personalized services from their bank and financial service providers. A digital experience platform offers the optimal opportunity for retail banks to offer this connected, contextual and hyper-personalized experience; to which customers are now well accustomed. It doesn’t have to be intimidating to implement, it can be implemented gradually and the benefits will follow soon.
Monica Hovsepian, Global Industry Strategist for Financial Services, OpenText