1. Removing Friction from the Customer Journey
An optimal customer journey makes every step and touchpoint in the buying cycle streamlined, efficient, consistent and personalized from the consumer perspective. Financial institutions need to re-imagine their core journeys from front to back by addressing key customer pain points, identifying new opportunities to delight customers in differentiated ways.
The relatively poor performance by a majority of traditional financial services organizations in delivering a customer-focused digital account opening, onboarding and cross-selling process is an opportunity for those institutions that want to embrace the potential of becoming a “Digital Bank”.
The 75-page Digital Banking Report, ‘State of the Digital Customer Journey,’ provided evidence that banks and credit unions of all sizes are not prepared to combat the increasing encroachment by fintech start-ups that focus on making every stage of the customer journey easy, seamless and contextual. In fact, there are some segments of the industry that are falling significantly behind consumer expectations.
The key takeaways from the previously published report, which surveyed banks and credit unions about digital new account opening, onboarding and cross-selling include:
- Most financial institutions can’t open a new account entirely online or on a mobile device.
- Only 16% of financial organizations provide a tablet assist account opening option in a branch.
- Branch based ID verification and/or signatures/supporting documentation are required at the majority of organizations.
- Multichannel digital account opening (save and resume) is not supported at most financial institutions.
- New account opening abandonment rates are high for institutions that offer online or mobile account opening.
- Only 55% of banks and credit unions have a “structured” onboarding process.
- Only 22% of financial institutions onboard new customers with the “optimal” amount of communication.
- Only 30% of banks and credit unions market products within the mobile banking app.
- Community banks are falling behind both larger banks and credit unions in digitizing the customer journey.
The consumer expects a simple and seamless digital experience. If this can be achieved, it will be reflected in improved satisfaction, loyalty and referral scores. If the digital consumer does not experience a positive end-to-end digital process, new account opening abandonment or existing relationship attrition is likely.
“The upshot of the Wells Fargo scandal will be that banks will seek to prove that they have their customers’ best interests in mind when marketing and cross-selling to them. The result will be a focus on “we’re here to help you improve your financial health,” and a positioning of PFM-related tools and apps as ways to measure and improve financial health.”
“In 2017, limited resources and cultures of ‘legacy thinking’ will cause the gap to widen between customer expectations and digital customer experience at many smaller institutions (under $1B in assets). Thankfully, the year ahead will also see new resources emerge – as well as new examples of organizational agility and operational structuring – that will finally prompt some small institutions to reshape cultures and become digitally proficient and customer-centric.”
– Jim Perry, Consultant and Strategist at Market Insights
“A customer-centric approach will be a ‘must have’ instead of a ‘nice to have’ for financial institutions, with the need to increase engagement or risk getting relegated to being a dumb pipe. Expect more personalized offerings and business models that adapt to lifestyle and the impact of an aging population (most notably enormous healthcare and caregiving costs).”
– Theodora Lau, Director of Market Innovation, AARP
“Everyone’s talking about customer experience and design, but to produce better ROI it’s time to turn to the data. Design is as much science as it is art, and the moment the Dow starts to pause, expect to see more focus on results-driven design (rather than the faddish approach often dominating the headlines today).”
– Jim Van Dyke, Founder and CEO of Futurion.Digital
“We are going to see more emphasis and execution of empathy-led marketing. Social conversion strategy is going to become more prominent, with content marketing strategy being focused on unique high quality and interactive content. Smart businesses will take a much more strategic, thoughtful approach to engage in meaningful ways with their customers and prospects.”
“Mobile banking will transform in 2017, with a focus on making mobile banking apps different by executing on great designs emulating best-in-class consumer vendors such as Facebook and Amazon. There will be an expanded feature set with photo bill pay and debit card controls as well as stand-alone mobile banking apps for debit card controls and alerts.”
– Tom Shen, CEO of Malauzai Software
“The most important trend will be incumbent retail banks implementing on last year’s promise of a smoother customer experience, beginning with onboarding. Challenger banks and technology firms have put a spotlight on the onboarding process, making this almost frictionless with biometric layers and digitized KYC/AML checks. Challenger banks also set the standard for personalized and contextual experiences. It’s time for all of the fintech/bank partnerships, innovation lab experiments and design studios of incumbent banks to deliver.”
– Daryl Wilkinson, Managing Director of DWC Strategy and Innovation
“The banking relationship continues to move from the branch to digital to mobile as technology matures. Despite the advances, the basics of banking still apply: Banks win because of strong relationships driven by consistently reliable and rewarding customer experiences. To build these kinds of interactions, banks will need to evolve from the traditional user experience design process to a design thinking approach supported by a service design methodology.”
– Craig McLaughlin, President of Extractable
“More than ever, the mobile apps that become the ‘Uber of banking’ are becoming the minimum ante to compete in a connected economy. Technology aside, I believe that 2017 is a year that calls for transparency in banking, operations and customer engagement. The prophecy is coming true; we do in fact live in interesting times. Customers and employees are evolving – and how they think about banking, money and success is deviating from the old normal. It’s time for leaders to disrupt themselves before the gift of disruption is given to them by someone else.”
“Personalized service will further evolve beyond communications and interactions, toward the personalization of products (like mortgage, savings deposits and checking accounts with rates and terms that better match client profiles and needs).”
– Nick Bilodeau, Head of Insurance (Canada) for American Express
“The focus for 2017 will be on enhancing the customer experience through proactive customer experience design. Removing the friction from the banking relationship and making banking more intuitive and useful. There will also be a strengthening of brands to enhance appeal and trust in a fragmented and crowded marketplace. This is becoming even more important as fintechs, telcos and start-ups eat our market shares away.”
– Vikram Krishna, EVP and Head of Group Marketing at Emirates NBD
“In 2017, banks need to test their assumptions about what ‘banking’ is – it’s not about opening a checking account or completing transactions. It’s about creating products that assist with all of the steps customers must complete in order to achieve their financial goals.”
– John Fishback, Principal Executive Advisor at CEB
“The banking industry needs to remember that the consumer’s mobile phone is part of their life. Well, at least it is for people who don’t live in woodsy Wisconsin, where reception at home doesn’t work…”
“With the globalization of finance, a dwindling profitable middle class and an ever-growing regulatory overhead, it’s all about creating an engaging and personalized experience, and more importantly, being helpful to customers and users. Soon, customers will demand hyper-personalized conversations with their banks, via an IoT device and with artificial intelligence … will banks be ready?”
– Mike King, Founder and President of Bankwide
“There is a tremendous digital knowledge and talent gap holding traditional banks and credit unions back from responding to the needs of the digital consumer. There are four options; Train, fire, hire, or outsource. Outsourcing is only a short-term solution. And hiring still has challenges due to the nuances of financial services. Therefore, ramping up and investing in delivering the best possible experience will be an important trend for financial institutions as they seek to guide consumers through the digital buying journey.”
– James Robert Lay, CEO of CU Grow
“In the coming year, financial institutions will put a high priority on upgrading digital channels as a key to future successes. As more consumers prioritize their experience on digital channels, FIs will conclude that offering an innovative and modern set of digital offerings is key to survival and customer retention.”
– Jeff Weikert, President of Payveris
“2017 will be the year of the digital-direct effort by banks. In typical form, 7-8 years after Simple and Moven were founded, banks have finally figured out that customers aren’t visiting branches to open accounts anymore and digital acquisition is a thing.”
“Banks will be willing to partner with Fintech startups that offer delightful digital experiences that has resulted in a loyal fan base.”
– Deva Annamalai, Director of Innovation and Insights at Fiserv
“Beyond the retail consumer, there will be momentum around building a better experience for SME banking (especially micro businesses). This is important since most banks and credit unions do not offer this valuable segment any value-added services despite a proven record of being willing to pay for value.”
– Mike Carter, CMO of D3 Banking