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Building An Omni-Channel Banking Experience Around Digital Natives

In his annual letter to shareholders, Jamie Dimon, CEO of JPMorgan Chase, warned that technology companies armed with smart people, deep pockets and big data are aiming to reinvent the financial services market.

While many in the industry consider moments like these to be harbingers of doom to the financial markets as we know them, the more important takeaway should be that financial institutions have an opportunity to think like startups, focusing on both the experience and engagement. Banks and credit unions need to engage a new generation of consumers, one built around digital natives — those who expect frictionless experiences, near real-time accountability, and continuity across digital and branch experiences.

To meet these expectations, financial institutions must stop focusing on the lifetime value metrics that have long been an industry standard, and instead, must consider customer journeys, the high value steps people take with their financial institutions. By focusing on journeys, such as account opening process, applying for loans or other financial instruments, redeeming loyalty points, exploring investments, online bill pay, security and even ATM transactions, financial marketers can easily identify opportunities for improvement.

Amazon once famously declared that every 100 milliseconds of latency on its website reduced the likeliness of purchase by 1%. This means today’s consumer might be as much as 10% less likely to purchase for every second lost waiting for a page to load. Meanwhile, as Mr. Dimon noted in his shareholder letter, various lending decisions “might take banks weeks.” This creates a huge gap between the expectations of today’s consumer and the experience for that most banks and credit unions are able to deliver.

This expectation of near instant gratification and resolution isn’t limited to Millennials either. Grandparents are on Facebook, and video chatting through Skype, and using FaceTime on their tablets. Financial marketers need to understand that almost everyone today begins their journey as a digital consumer, and embrace the opportunities this presents. Even tapping into social networks can help speed the application process.

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To improve the customer journey, banks and credit unions must identify pain points, and what actions consumers may take when encountering these obstacles. For instance, applying for a loan can trigger dozens of questions for the applicant, even if today’s consumer has done a bunch of research and is generally more informed than consumers of a decade ago. To address this, you must have options that enable people to access subject matter experts, and in the channel the customer prefers. That can either mean email, chat or click-to-call, in addition to physical branches. In every channel, it is imperative that the subject matter experts offering advice are able to pick-up where the customer left off. Opening an account must be an asynchronous process for those who want the personal hand-holding of an in-person visit, while digital channels must be simple enough for people to breeze through on their first attempt. The account opening process should now occur according to the accountholder’s schedule, not yours.

Create Your Own Disruption, and Think Digital

Financial institutions work in arguably the most heavily regulated industry in the U.S. The compliance requirements within a “Know Your Customer” (KYC) framework can create dozens of extra steps in your account opening process, with each step adding more time. And don’t forget, as Amazon says, “time is the one thing consumers aren’t willing to give up.” To address all of the regulatory hurdles and to provide secure access, you must look at ways to expedite and accelerate your most time-consuming processes. Frequently, the most burdensome step in the account opening journey is the manual entry of data. By simply digitizing these processes, you can dramatically reduce the amount of time consumers have to invest. This is especially important across enrollment channels. A customer who begins their application on a tablet but subsequently comes into a branch with questions must be able to immediately pick-up where they left off; starting over from scratch is definitely not an option. That’s why you need the right digital solutions in place — built with today’s omni-channel consumer in mind.

As Mr. Dimon points out, many of the companies that are reportedly out to “destroy” banks today are more likely to be those banks’ vendors. Financial institutions have tended to adopt technologies built by established, legacy companies — not entrepreneurial, Silicon Valley startups. Years ago, the phrase “no one was ever fired for hiring IBM” was indicative of the typical approach most financial institutions took to buying technology. But by focusing on customer journeys, you can quickly become better equipped to compete with those outside disruptors everyone says are threatening your future.

Key Takeaway: In every delivery channel, you need to identify the pain points in your customers’ journeys and eliminate friction.


Derek Corcoran is the Chief Experience Officer at Avoka. His focus is on understanding best practices for sales and service transactions, credit card applications, loan originations and account opening. Derek has 20 years of IT, BPO, and business development experience engaging with hundreds of clients in the USA, Europe, and Australia.

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Comments

  1. Eric Lindeen says:

    Derek, your observation on the importance of time optimization in the account opening processes is a critical point for financial institutions (FIs) to consider when reworking their legacy systems. While I agree that digitizing the account opening process is a successful strategy in achieving this implementing this innovative technology seems to take years for many institutions. With the rapid rate of change in mobile technologies, this often prohibits many FIs from gaining a competitive advantage. However, as you observe, by focusing on a customer’s journey, FIs will find they are meeting customer needs while also growing profit, retention, and ultimately gaining that competitive edge.

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