Until recently, digital banking strategies were considered adequate so long as they established a bank’s online presence. Quite simply, providing consumers with a basic mobile banking app reduced costs for local branches and attracted a wave of digital native customers.
With time, however, digital banking has become the norm and, as a result, differentiating an organization’s approach has become much more important. According to data from FI Navigator and Celent, 57.1% of financial institutions (90%+ of organizations with more than $500 million in assets) offer a mobile banking app and that number continues to grow.
Success absent of the digital banking channel is nearly impossible, with the emphasis now being placed on the way in which the mobile channel is leveraged. But asking “how do we make it better?” is the wrong question … you don’t necessarily need to make mobile banking better. It’s about using mobile banking as a tool that reflects your defined retail banking strategy.
What is Your Retail Strategy?
Every investment a financial institution makes should always come back to whether it will contribute to accomplishing its institutional goals over the next 12-24 months. There’s no right or wrong when it comes to identifying your organization’s strategic focus; it’s been my experience that banks and credit unions take a variety of approaches in this regard. The starting point is to do a self-evaluation by asking the following basic questions:
- Where is your focus in the market (vertical industries or consumer segments)?
- How are you reaching each segment?
- What is your current approach to advertising and promoting to each segment?
- How do you deliver each product currently?
The bottom line is that whatever you’re doing in your branch – from collateral development, to prioritizing products, to training tellers to talk about those products – should be aligned with the results of the self-evaluation. Most, if not all retail bankers and credit union executives have no issue answering these questions about their own business, and if there’s one thing that retail bankers and credit union executives know, it’s how to engage consumers and deliver personalized service at the branch level. So what’s the issue when it comes to translating that experience into digital?
The Digital Disconnect
Even though digital channels should be an extension of the retail strategy, many organizations adopted mobile quickly and created a situation where they were providing two very different experiences. Think about it this way – What would you do at the branch that you want reflected in your mobile app? Digital offerings should be reviewed in the context of your retail self-evaluation. Conducting a gap analysis between the branch and digital experience will reveal where engagement is lacking and forces the question, “are my digital offerings helping or hurting my business?”
For example, you don’t want people entering the branch and not getting greeted. However, most digital banking offerings are strictly transactional – the equivalent of a branch with only teller lines and no human touch. The level of comfort and familiarity for the customer should be consistent, regardless of whether he or she is in the branch to discuss opening a savings account or depositing a check from the kitchen table. You would be surprised to find that even simple changes – colors, font sizes and types and other visual factors – can be drivers of satisfaction (or dissatisfaction).
The customer experience should also be examined to ensure features and functions are aligned with retail offerings, and delivered in such a way that the customer can easily interact with the functionality and control their account.
You may want to consider offering multiple mobile apps, with different features and functionality that meet the needs of each segment identified in your self-evaluation. For example remote-deposit is a must for all segments, whereas account aggregation and P2P payments are features younger customers seek more often.
Cohesion across all channels removes friction and increases the lifetime value of the customer. Working closely with tech vendors to align cross-channel capabilities creates a path to digital success and ensures that your organization, not the branch, becomes associated with personalized service that keeps customers coming back.
Incorporate Social and Increase Loyalty
Social engagement drives the dialogue between financial institutions and consumers and there are mobile banking providers that have general and specialized social features that attract and retain customers. However, this must be executed correctly. For instance, if the objective is growing small business deposits, how social media is leveraged will be different than if your focus is on acquiring new customers in a consumer segment, say Millennials.
Leveraging internal resources, such as your CRM content, for social engagement, allows you to leverage more effective and more meaningful messaging that promote your value to targeted audiences and in different ways. And just like the retail environment, social channels are a great place to establish and enhance relationships – not just to sell products.
The concept of using social channels to provide loyalty offers and digital incentives is emerging as a driver of engagement between consumers and financial institutions. A digital presence in and of itself is worthless without a plan in place to disseminate consistent, relevant content across the many social platforms (the most prominent today being Instagram, Facebook and Twitter).
This includes specialized communications that encourage customer-initiated interactions, instead of just waiting for customers to open your mobile app and conduct transactions such as deposit checks or view their balances. It also includes loyalty benefits or points programs to reward customers for their engagement and entice them to return to your digital channels more frequently.
Incentives can be big or small, but their availability is especially important as consumer reliance on mobile devices is rapidly increasing. Combining social features with loyalty benefits provides your organization with greater opportunities to connect and meet customers’ financial needs and identify new ones.
Extending Retail with Digital
Providing an unforgettable banking experience through digital channels is less complicated than some may have you believe. Moreover, digital success is not exclusive to larger financial institutions.
After all, it has been the community banks and credit unions whose roots are firmly planted in the everyday lives of their local customers that provide the best insight for long term loyalty. The success of community banks and credit unions have always been predicated on a solid strategy based on knowledge of the customer, and the delivery of financial services accordingly.
Digital and mobile channels are simply effective tools that can extend the existing model far beyond the physical branch, strengthening existing relationships and attracting the next generation of customers.