The modern-day banking industry is about more than offering the right products and credit. Institutions are battling with each other to provide their customers with a cutting-edge customer experience to secure their loyalty. New technologies and the rise of digital-based fintechs have pushed banks into finding new ways to engage their existing and potential new customers.
Consumers have higher expectations when it comes to experiences than they might have had 5 or 10 years ago. Companies like Amazon, Netflix, Google and Facebook amongst others have created customer first type approaches that take them to a different level of contextual and timely journeys. According to Deltec Bank – Bahamas – “People want every experience they have with a company to follow suit and arguably, there is not any more important institution than the ones who manage their finances.”
With so much choice available, banks that fail to meet expectations can quickly lose customers. In this post, we will highlight some of the key factors they need to consider when it comes to customer experience in banking.
The need for an omnichannel approach
Omnichannel might sound like a bit of a buzzword but it is one that has a lot of weight behind it. This refers to consumers being able to use the channel they want to access their bank and not being forced to follow a specific path. The days of having to phone your bank or visit a branch are behind us in most cases and people want something more. However, the level of service people expects from a mobile, computer or other device is the same as it is ever been.
Going into 2020, banks need to provide their customers with a seamless experience. If they visit the bank using a mobile app, they should be able to do everything they need using that channel. When there is an instance that a person needs to call or email the bank after using the app, there is an issue with the experience.
A 2019 Accenture report on global financial services found that half of all respondents expressed an appetite for a true omnichannel banking experience. This means they would be able to seamlessly switch between physical and digital channels without any discernible service impact in the experience they receive. The same report showed that consumers believe their digital experience with banking is still not up to the same standards as other industries like retail.
Security and Ethics
In reality, you can deploy the greatest technology and services in the world but if the customers do not trust it, they will not use it. In a survey from Salesforce, 80% of consumers said they were more loyal to a company with “good ethics” and 68% would not buy from a company that had questionable ethics.
Banks need to ensure that they provide 100% transparency on how customer data will be used throughout the journey. This includes having very robust security policies and procedures such as fingerprint and biometric technology which have become a virtual must-have deployment.
Credit specialists Equifax says that the typical customer banks via a digital channel four times as often as they do physical branches. In using data from digital channels in the right way, banks are better placed to create quality experiences. Beyond that, they might recognize anomalies in behavior. For example, if a customer normally logs in to their bank at 7 am every day and the pattern suddenly changes, it could alert them to an issue.
A secure model does not mean that institutions need to compromise on customer experience. For example, in using geolocation data, fingerprint technology or biometrics (like retina scans), banks improve security and provide a smooth digital experience.
Personalization and Engagement
Although offering personalized products and services has been a foundation of the banking industry, with the hyper-personalization in the likes of retail, it has become more critical than ever. As there is so much consumer data available from the omnichannel experiences, organizations can now deliver a message to individuals rather than traditional marketing segments. In banking, every person can receive offers that are designed for them and that is what they expect to see.
Statistics from The Financial Brand show that the majority of consumers see their banking relationship as a necessity rather than that of a trusted partner.
To get to a point of trust, banks need to provide contextual, real-time, relevant communications to their demanding consumers, In the same way, their retail counterparts do. For example, Yolt is an open banking app that lets users view all their accounts in one place. It tracks spending and helps customer set targets, sending alerts when there might be an upcoming problem. As well as that they can transfer money between different accounts from the same place.
Similarly, Moneyhub provides users with insights into their spending habits. The insights can get translated into recommendations as to whether financial help or advice might be needed as well as notifications before bills are due.
Other banks and financial service providers are looking for unique selling points like these to acquire customers. Revolut offer a rounding up feature for better saving, Starling offers fee-free spending abroad and Monzo are designing everything to the modern digital customer. The message here is that banks are realizing who their customer base is and providing the services they need.
Essentially, banks need to create tools that are customizable for each and every customer to drive the necessary engagement and loyalty.
A Gartner report from 2018 showed that as many as two-thirds of companies are competing primarily on the basis of customer experience. A decade ago, this stood at just 36%. These figures go to show how important it is for banks to have an experience strategy in place. This goes beyond having the right products and financial services to creating a hyper-personalized journey that drives customers to engage with the bank.
The need for top-notch customer experience will only continue to increase with more market competition and financial institutions need to step up their game if they are going to succeed.
Disclaimer: The author of this text, Robin Trehan, has an Undergraduate degree in economics, Masters in international business and finance and MBA in electronic business. Trehan is Senior VP at Deltec International www.deltecbank.com. The views, thoughts, and opinions expressed in this text are solely the views of the author, and not necessarily reflecting the views of Deltec International Group, its subsidiaries and/or employees.
About Deltec Bank
Headquartered in The Bahamas, Deltec is an independent financial services group that delivers bespoke solutions to meet clients’ unique needs. The Deltec group of companies includes Deltec Bank & Trust Limited, Deltec Fund Services Limited, and Deltec Investment Advisers Limited, Deltec Securities Ltd. and Long Cay Captive Management.