Avoiding Digital Banking Parity

Most bank and credit union decision makers are aware that their customers want online and mobile services. That is why financial institutions of all sizes offer these services. Are your problems solved, or have your problems just begun? Today, with virtually every financial institution having hopped on the digital bandwagon, merely offering online and mobile services no longer creates a competitive advantage. At best, it keeps you at parity.

As calendars go, January 9, 2007 doesn’t seem that long ago. But as technology goes, it is eons in the past. It was on that day that Google wrote off two years of development and scrapped plans to announce the first Android smart phone. The reason was, in a word, the iPhone. All touchscreen, it rendered Google’s planned Blackberry-esque design instantly obsolete.

Apple had changed smart phones, and later tablets, forever. But who’d have thought at the time that Apple had also changed banking forever?

Google caught up fast. Today, Google’s and Apple’s operating systems split the smart phone and tablet market more or less evenly, with a few percentage points going to brands ignominiously lumped under “other.” No matter which platform you prefer (let’s not debate “religion” here), smart phones and tablets—and using them for banking—have taken the world by storm.

All that in seven years. Our world has changed while some of us blinked. And it isn’t through changing yet.

The percentage of people paying bills via mobile devices doubled in the last year alone. The number of U.S. adults abandoning landlines for smart phones continues to rise, with adoption of online banking tracking right along with it. Though adoption speed varies from one age demographic to the next, all ages are embracing mobile banking.

Some naysayers point out that the overall adoption rate of online banking has slowed. True enough, but the slowing is a not a sign of declining demand, but of near ubiquity. Online banking and bill pay have formed a new landscape that is here to stay.

Smart phones led the race, but may be passing the baton to tablets. More than half of U.S. adults own a tablet, while one in six tablet owners today do not own a smart phone.

Clearly, banks with an interest in sticking around need an online presence. On desktop and laptop computers, on smart phones, and on tablets.

But recognizing that is the easy part. It gets harder from there.

War of the Clones

Most financial institutions get the importance of offering digital banking services. But what many fail to get is that that much has come to be expected. Offering digital services will not impress your customers. All it does is confirm that you’re in the 21st Century. Merely offering what every other bank offers does not set you apart.

This is not a new problem. Not long ago, bankers figured out that their industry had all but become a parity product. To set themselves apart, they focused — or a least claimed to focus — on personal relationships. Fine, but a personal relationship can be a tad difficult to pull off in the course of a digital transaction, where you can’t shake hands and ask how the kids are doing.

Yet the concept of relationship banking offers a clue for rescuing your institution from parity status. Bankers of yore who recognized customers by name and remembered personal details added a not easily imitated pleasing experience to banking functionality. In like manner today, a well crafted digital suite can set a bank apart from the clones by delivering digital functionality amid a pleasing experience.

It requires something of a shift in thinking. Bankers need to realize that a variety of Maslow’s hierarchy applies digital banking. Once a customer’s basic digital transactional needs have been met, “higher” needs begin clamoring for fulfillment. Most banks today meet the basic needs. Few have a clue as to what the higher ones are, much less meeting them.

Read More: 20 Best Mobile Banking Apps )

Creating a ‘Digital Experience’

Here’s what human-centered design guru Don Norman has to say about the customer experience: “It’s the total experience that matters. And that starts from when you first hear about a product … experience is more based upon memory than reality. If your memory of the product is wonderful, you will excuse all sorts of incidental things.”

To his point, when I think about Disneyland, I think about the fun my wife and kids had there on our last trip. The long lines and aching legs fade from memory. That’s because, for us, Disneyland is more than rides. It’s an overall positive experience.

Banks don’t have Mickey’s toontown and adrenaline-raising rollercoasters, but they have other tools at their disposal for creating a pleasantly recalled experience. It starts with setting aside what you think customers want and waking up to what they do want. Beyond apps that work (which hopefully is a given), here are some tips for enhancing the customer’s digital experience:

  • Don’t make your mobile apps a clone of your desktop banking site. If customers wanted to use your website on a mobile device, they’d use the mobile device to go to your website. But they don’t. They download your app. Their expectation is that the app will take advantage of their mobile devices features.
  • Smart phones and tablets are not created equal. Smart phones and tablets are different animals, and people use them differently. When people access their accounts on a smart phone, they’re usually on the go. The app design should facilitate with easy navigation, buttons that hurried fingers can use, and with most-used features prominently available. By contrast, people spend more time accessing accounts on a tablet. They’re more likely to be working in the quiet of home or office, where they have more time to focus and explore.
  • Mobile operating systems are not created equal. iOS and Android OS are different systems, each with its own features and advantages. Apps should be designed so that aficionados can tell that you designed for their platform. It’s more important to them than you might think. Above, I facetiously referred to operating system preferences as religion. The metaphor is not far off.
  • Devices are not created equal. While an iPhone pretty much is an iPhone, there are myriad Android OS devices out there. They are not all alike. It pays to style apps for the device. For one thing, some devices will allow you to provide conveniences that others may not, and users expect to be able to take advantage of them. Perhaps more important, you don’t want a function that works well on one device to cause problems for customers using another.
  • Not just a utility, but a resource. Beyond transactions, consider what else may interest or prove useful to customers using your app, and the kind of convenience you might provide by building it in. This offers two advantges: One, you might increase share of wallet as consumers remain in and explore your app a bit longer; Two, consumers will begin to see your app as not just a utility but a resource. Obvious features include interest, budgeting, and other calculators. But how options for local weather info, local merchants offering deals, sports updates, movies, a news headline scroll, traffic advisories, podcasts, and even games?

Read More: Antes vs. Drivers: 3 Steps to Find Relevant Differentiation )

No Excuses

There’s nothing wrong with having a parity product, provided you don’t mind foregoing brand loyalty and competing on price and availability instead of on what makes you uniquely you. But financial institutions that fare best do not content themselves with waiting for sundry customers to default through their front doors.

Digital services are new enough that there’s still time for you to stand out as a leader, to avoid being just another bank with online services. There’s no excuse for failing to seize the opportunity.

Matt-Wilcox-100-colorMatt Wilcox is the Managing Director, Marketing Strategy and Innovation at Fiserv. He guides holistic marketing of Fiserv solutions with an emphasis on digital and emerging payments for consumer and small businesses. He also oversees collaboration opportunities with those that are early adopters of emerging payment technologies. A frequent speaker and publisher of a popular blog, Wilcox provides insight and vision into the financial services landscape and how marketing and innovation are shaping the industry. You can also follow Matt Wilcox on Twitter by clicking here.

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