Are Financial Institutions Wasting Their Time Chasing a Digital Dream?

Banks and credit unions should always have the best digital experiences possible. But that cannot be the only focus. If you have the best apps but the worst customer service and experience, the quality of the app will never matter to the customer.

It sounds outrageous in 2020 to argue for not focusing on digital experience, but take my word for it. If you focus solely on digital, you will sell yourselves and your clients short.

While some global financial institutions can pull off world-class digital at scale, most won’t be able to. Here’s the question you should ask in today’s “digital first” environment: Is the goal to have the best digital experience in the region and great relationships, or to have a “good” digital experience and unbelievably great relationships?

Digital is and will remain vital to any bank and credit union’s long-term success, but it cannot and should not be the sole focus of marketing teams. In truth, this was not my opinion when I first entered the world of financial services from real estate marketing. But the data on digital banking experiences — both qualitative and quantitative — speaks for itself when we look at digital usage and customer engagement and retention.

According to the 2020 State of the Financial Marketer report from TotalExpert, for example, nearly two out of five banks and credit unions (39%) report that 90% to 100% of their customers regularly engage with online banking. But 46% of organizations rate their own mobile app experience average, at best. So, what does that tell us?

Simply that not every digital experience has to be top-notch — the experience just can’t be bad.

More important to consumers are their end-to-end interactions with their financial institution. Whether these are on the web, in Facebook Messenger or at a branch, the interactions need to be strong, authentic, helpful and on point. That is where the true opportunity resides and where banks and credit unions need to be focused post-COVID.

Not all consumers are rushing to fintechs for their banking needs. Among U.S. consumers that use the internet, 46% are fintech users, according to an EY study cited in eMarketer. Compare that to 87% in China and 71% in the U.K.

A study released by Vaynermedia in June 2020 reports that 44% of Generation Z believe COVID-19 is going to impact their future in a negative way. However, from the same group 51% say things will get better. The report concludes that Gen Z already has become the new family influencers, driving everything from day-to-day behaviors to purchasing decisions.

This represents a tremendous opportunity to develop strong pipelines for customer growth today and for years to come. But it will require a focus on the full customer experience; everything from online chat, call centers, email, and even in-person interactions.

Engage Early and Often – But Smartly

Our marketing team recently ran a test with a multi-national bank competitor to see how they engage their customers digitally. To do this, we opened a standard checking account and then watched and waited. What happened next was rather interesting. We were bombarded with email messages welcoming us to the organization — including how-to messages and other related news from the bank. But what was most astounding was that some of the messages came multiple times a day. This is all to say that there is a right way and a wrong way to engage your customers.

The Financial Brand reported that one in ten banking providers successfully engage new customers after opening a checking account. This is not only a missed opportunity to begin the relationship on a positive note, it’s a tremendously expensive mistake. A 2017 study by Javelin found that fully engaged customers produce “an estimated $212 more in annual profit” than their inactive counterparts.

Depending on the size, scope and strategy, this on-boarding can take many forms. Sometimes the right e-mail workflow is the right approach. Sometimes it is a personal note from the officer who opened the account. I’d argue it should be a hybrid approach. In any event, there needs to be a clear plan in place driving the on-boarding process.

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What You Want: Positive Customer Experiences Every Time

Geoff Thomas, Chief Product Officer at Harland Clarke, says it best: “A customer opens an account with every intention to use it… they want to use it. And if you’re going to have a shot at a new customer growing up to deliver lifetime value, you need for them to use it.”

This statement is what keeps financial marketers up at night. Opening up new accounts is great. But if all we are getting are dormant — or “one-toe-in — customers, we will never move the needle forward to building long-term relationships.

Thomas goes on to say that it is vital to deliver meaningful engagement every time — starting on day one. That is why our test experiment from the international institution was so startling because half the messages were meaningless and unnecessary.

We are all consumers and we have all had to deal with customer service. You remember the good experiences; and I’m certain you remember the bad ones too. Ovum, in their report, “Take a Modern Approach to Customer Experience,” says that the “foremost factor affecting customer satisfaction is issue resolution on the first contact with agents.”

Nothing is worse for the customer than to have to bounce around from agent to agent across multiple engagements to solve a problem. But further, only 35% of agents can accomplish this one-engagement solution goal. That is not a very positive experience for the customer.

We all want positive digital experiences it’s true. To put this in the proper perspective, MX.com asked consumers this question: “What do you want most from your financial institution?” A quarter of respondents said “The best digital experience,” while nearly the same number (23%) said “The best customer service.” I would posit that a few of those who say the best digital experience would trade that for the best customer service.

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Create Authentic Interaction

I recently re-watched a talk from Rilla Delorier, former EVP and Chief Strategy Officer at Umpqua Bank, given at The Financial Brand Forum. She said that instead of focusing on AI (Artificial Intelligence), they were focused on AI (Authentic Interaction). I loved that. It’s the key to winning hearts and minds in our current economy.

But that doesn’t mean we don’t leverage AI (Artificial Intelligence) when it makes sense to do so.

Banking consumers today want smarter identity and credit protection. That’s artificial intelligence programming. They want automated financial guidance to help them manage their money. That’s artificial intelligence put to use as an advisor.

The data is already there in our financial management apps, we just need to be tapping into it in a way that adds value while leading to faster and more efficient issue resolution.

The real winners will be those banks and credit unions that find the happy medium between positive digital banking experiences and authentic interactions at every touch point.

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