They say that “To those with a hammer, every problem is a nail.” Bank and credit union executives would do well to keep this cautionary admonition in mind as institutions across the country announce their “Digital First” strategies in growing numbers. It should serve as a constant reminder to avoid a myopic focus on technology as a way to drive efficiency and reduce costs while losing sight of creating engaging and integrated customer experiences. Our most recent research indicates that failure to keep the user perspective front and center during the digital transformation process can lead to product and service commoditization that makes institutions indistinguishable from each other.
“Consumers seem less connected to many financial brands today than they were in the pre-digital era.”
To be clear, we have seen many great benefits accrue to banks and credit unions and the consumers and businesses they serve in the wake of technology modernization projects that create better agility, efficiency and customer engagement. Online banking and mobile apps have opened the door to unprecedented operational efficiency and convenience across the entire spectrum of small, medium and large institutions.
The down side: However, we have also noted that — in too many instances — something important can get lost on the path to digitization. J.D. Power voice of the customer surveys on the financial services sector reveal an ongoing degradation in the emotional connections that have traditionally been critical to the relationship between banks and credit unions and the consumers and businesses they serve.
A Disconnection that’s Growing Worse
We are not reporting that people are less satisfied. We are simply observing that consumers seem less connected to many financial brands today than they were in the pre-digital era. When confronted with digital product choices, they increasingly research and shop alternatives.
The underlying reason revolves around a sense that online experiences for consumers are more or less commoditized. With a few notable exceptions, the features and functions of one online banking experience are undifferentiated from others.
This phenomenon is gathering steam. More and more banks and credit unions have been closing branches and steering people to mobile apps, interactive voice response menus and self-help sections on their websites.
To many consumers, institutions seem to be fine with sacrificing human engagement for operational efficiency.
This is not a good bargain for financial institutions to make. And it isn’t a necessary one.
Customer advocacy and loyalty continue to serve as the foundation for building strong financial brands, regardless of an institution’s size. Year after year, J.D. Power consumer studies show that institutions gain valuable referrals and repeat business from people who have an emotional connection with a brand.
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How Financial Marketers Can Find Tech/Human Balance
So how can financial institutions move forward with digital transformation initiatives that do not leave consumers and businesses feeling … blah?
Institutions that harness digital efficiency while maintaining a strong connection with people display five attributes:
1. Banking as I like it.They make interfaces customizable so that people can configure their website view or mobile app to their personal preferences to “make it their own.”
2. Put a human seconds away. Offer easy-to-access options that immediately transition the customer to human engagement and interaction at key moments. An example: When the customer needs to resolve complex problems or is addressing life-changing issues such as marriage, birth of a child, or retirement.
3. No one hugs chatbots. Provide proactive and empathetic responses in force majeure situations. A personal touch is much appreciated by individuals affected by fraud, natural disaster, or hardship of some sort. The best financial brands have even figured out, where appropriate, to provide community support at a regional or even local level.
4. Address the needs, not your product sheet. Focus communications and engagement on people’s emotions and objectives, rather than on the brand’s products and services. For example, if someone needs a loan to create the wedding of their dreams, providers that are able to maintain the focus of the marketing and ultimately the interaction on the life event, rather than on the transaction, produce much more compelling experiences that are remembered fondly.
5. Begin with an essential — trust. Banks and credit unions should establish trust to lay an ongoing foundation for emotional connection. This includes the most basic things, like following through on promises, but also subtle decisions that require staff to exercise discretion, such as sharing the blame, and perhaps the cost, when some things go wrong. For instance, if a bank makes a mistake on a statement that causes confusion and a late payment, the bank shows willingness to give up a late fee charge.
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Making Technology and Humanity Synch for Better Banking Service
The key to success is implementing these behaviors in an integrated manner and creating a seamless experience across automated digital interactions that transition to human interactions. It requires multidisciplinary groups to carry out cross-functional activities. For example:
- Marketing needs to make sure people feel their bank is interested in supporting their life events — not just processing financial transactions.
- Technology teams are critical to making sure the customer interface is intuitive and allows for easy flow from digital to human modes of interaction.
- Sales teams must make sure products are properly positioned and executed to drive a positive emotional connection, even after people enroll.
- Operations teams must make sure processes and staff are consistently aligned to deliver the customer experience that institutions are promising to the market.
It’s vitally important to remember that the needs of current and prospective customers are constantly changing. J.D. Power research on different segments of the financial services sector clearly shows just how much personal touch matters. Across retail banking, credit card, personal loans, or mortgage servicing, implementing a culture of personal service means greater promotion from the people you serve. This directly contributes to maintaining strong emotional connections.
This is no easy undertaking. But it is the key to sustained differentiation, customer retention — and ultimately — new revenue generation.