According to the Statistic Brain Research Institute, roughly 50% of individuals set New Year’s Resolutions each year, with 50% of those having infrequent success and only 8% being completely successful with their resolutions. Despite what on the surface appears to be a futile process, it was found that those who explicitly make resolutions are 10 times more likely to attain their goals than people who don’t explicitly make resolutions.
With this potential for success in mind, I collaborated with Ron Shevlin, Director of Research at Cornerstone Advisors, and author of the book Smarter Bank, to determine what New Year’s Resolutions would make sense for bank and credit union executives hoping to improve their digital banking maturity in 2016.
Resolve to Improve Your Digital Banking Maturity
Deloitte provides a great starting point for this year’s resolutions, recommending that banking organizations should set their sights on improving their digital maturity across these five dimensions;
- Account Opening and Onboarding: The level of automation and digitalization of the account opening and onboarding process.
- Content and Functionalities: The ability to offer basic as well as value-added content and functionalities through digital channels.
- Design and Ergonomics: The simplicity of design, availability of contextual offers and ability to personalize the experience.
- Navigation: The ability to leverage customer insight for improved information access.
- Safety/Security: The level of enhanced security available to protect identity and funds access.
Improving a bank’s digital maturity ensures higher efficiency in some processes (e.g. account opening, onboarding, credit offering, etc.) and improved interaction and customer experience. To reap maximum advantage in an increasingly digital society, organizations will need to provide above-average performance in all categories.
“Banks will have to increase their operational efficiency and improve the customer experience if they want to keep their position in core markets. Non-traditional and digitally mature companies are winning market share partly because they are able to match the digital expectations of the 21st century customers,” explains Pascal Martino, Partner and Digital Leader at Deloitte.
In most cases, there is a significant gap between the digital performance of banks and consumer expectations. The New Year’s Resolutions below are a good starting place to improve your organization’s digital maturity.
1. Digitize Account Opening and Onboarding
Of all of the resolutions suggested, the most important may be to improve ability for consumers to open a new account using digital channels and to efficiently onboard the new customer digitally. As highlighted in the Digital Banking Report titled, less than 30% of the largest banking organizations have the ability to open a new checking account end-to-end on a mobile device.
“It is currently easier for customers to open a bank account by visiting the brick-and-mortar branch than through digital channels,” states states Petra Hazenberg from Deloitte. “In this area, banks differ strikingly from the new market players who offer a convenient end-to-end online process.”
There are many solution providers who offer digital account opening tools that can capture personal data, pre-fill forms, suggest add-on services and eliminate all paperwork from the new account opening and onboarding process. By eliminating the cumbersome application process, there will be far fewer consumers abandoning the account opening process and a greater overall satisfaction.
Ron Shevlin suggests going a step further, “Taking product apps online or through mobile devices is great for consumers, but mostly in terms of upfront data collection. What about the rest of the process? I resolve to digitize the entire process … not just the front-end.”
2. Offer Value Added Functionality
According to Deloitte, basic functionalities are required in order to avoid dissatisfaction, but are unlikely to positively affect customer experience in a meaningful way. Value-added content and functionalities, in contrast, will contribute strongly towards a positive customer experience.
Digital consumers already expect to be able to access balances, make transfers and payments, access bank statements and communicate with an advisor using digital channels. But can they open a new account, order a debit or credit card, book an appointment or access more involved financial services such as budgeting tools, investment services, lending products, etc.?
Other value-added functionalities that should be considered for 2016 include:
- Digital document safekeeping
- Blocking debit or credit cards
- Access to financial news
- Digital investing
- Personalized digital alerts
- P2P payments
- Digital savings tools
- Online chat
Ron Shevlin doesn’t believe these all new functionalities need to be part of the same mobile banking application. “Instead of having every piece of functionality the bank can dream up crammed into one big-honking mobile banking app, I resolve to provide separate mobile apps for specific consumer segments and needs – like a house hunting app (that facilitates mortgage and insurance applications), a car shopping app (like the house hunting app), a wedding planning app (take a look at what Geezeo recently launched), a baby planning app, and other life stage specific apps.”
3. Simplify the Digital Experience
The differentiation between competitors with regard to design and ergonomics is surprisingly minimal. Most online applications are based on legacy accounting and website designs, and most mobile applications are simply a scaled back version of legacy online banking applications.
In the future, design will be a much bigger differentiator, with simplicity being the overarching goal. Elements allowing consumers to personalize their digital banking experience, such as contextual cross-selling, the ability to set up personalized digital alerts and even the ability for the customer to design their own digital banking app (font sizes, accessibility of certain functions, etc.) will increase in importance.
Traditional thinking in the banking industry is that “more is better”. In the future, digital banking applications will be judged based on the lack of touches needed to get from point A to point B. Financial institutions should set a resolution that steps be eliminated through iterative learning to improve the individual consumer experience.
4. Improve Digital Navigation
According to the Deloitte analysis, financial institutions need to realize that segmenting customer groups enable targeted, customized content that will facilitate navigation. A key aspect in this context will be the landing page.
For customers and potential customers, the landing page represents the first contact with the bank and any subsequent navigation and redirection should be simple and user friendly.
“Banks should consider an acquisitions app as opposed to the traditional, overarching servicing app. The app should show me why I should be a customer as opposed to assuming I already am one.”
Cherian Abraham, Director, Mobile Commerce and Payments at Experian Decision Analytics
This acquisitions app may also ask the potential customer for information about their needs and financial goals that will enable the display of relevant account information as opposed to everything the bank offers. This simplifies the navigation process and helps the potential customer create a customized experience.
“Segmenting customers will not only facilitate navigation, but also enable targeted product placement, thus increasing the likelihood of further sales,” according to Deloitte.
For a rather easy to implement, yet powerful capability, a good New Year’s Resolution could be the inclusion of a search capability on both the public website as well as the digital banking app.
5. Introduce Improved Security Capabilities
Identity protection and account security will continue to increase in importance as hacking become more sophisticated and widespread. Advanced fraud detection mechanisms and the possibility to leverage personalized security preferences and alerts will become more widespread. For any security enhancement to be accepted and efficient, however, will require that the user experience (ease) not be impacted.
It is expected that more financial institutions will test biometric security, including fingerprint technology, facial recognition and even voice recognition. This trend will escalate as a result of the increased use of Apple’s Touch ID.
Banks and credit unions should consider investigating and implementing additional layers of security that will reduce the potential for device and account level fraud. While there will still be breaches in the coming year, the goal will be to reduce the potential for losses and customer impact.
Don’t Forget ‘Big Data’ and Branches
In the interest of keeping the number of New Year’s Resolutions to a manageable number, we have not included resolutions around ‘big data’ or the branch network. This is not to suggest that goals should not be established around these two additional keys to digital banking maturity.
First of all, the use of advanced data analytics needs to increase to allow for several of the above resolutions to occur. In addition, consumers are becoming impatient with financial institutions that continue to mistarget offers and solutions. With non-financial organizations getting better and better at contextual offers that are based on collected insights, consumers expect no less from their financial institution. Customization and personalization of experiences is expected.
Second, the need to reduce costs and increase efficiency is more important than ever. Therefore, the branch network can’t be ignored.
“Give up any delusions about the branch. Bankers should resolve to not let consumer stats – specifically those that purport to show a high percentage of them coming into branches on a regular basis – lead them to believe that they should be investing more money in branches or branch-related processes.”
Ron Shevlin, Director of Research for Cornerstone Advisors and author of the book Smarter Bank
To this end, bankers and credit union executives should continue to evaluate the reduction in branching (both the number of units and the size of existing facilities). In addition, the investment in digital technology to replace more expensive human interactions needs to be considered. This should include, but not be limited to, tablets for universal bankers, automated tellers and digital kiosks to facilitate account opening and customer inquiries.
Making Digital Banking Resolutions Stick
As financial organizations continue on their digital journey, they can take advantage of the opportunities that digital provides in terms of customer experience and efficiency. Embracing digital technology and becoming a ‘digital bank’ is no longer optional … it has become inevitable.
Unfortunately, some bankers haven’t gotten the message.
“Most bankers do not believe in digital. They talk about it. They think about it. They know they must do it. But a bit like dieting or giving up alcohol, there’s a lot of talking and thinking about it, but making it happen is much harder.”
Chris Skinner, Chairman of the Financial Services Club and author of the bestseller, Digital Bank
As an overarching New Year’s Resolution, Skinner believes that the entire organization needs to believe in turning the bank digital.
So, how do you set digital banking resolutions that will not be forgotten by February? It is the same way you should set personal resolutions. According to the very well read Lifehacker article, Top 10 Strategies for Making Your New Year’s Resolution Stick, here are some suggestions for success:
- Focus on fewer, achievable resolutions: The fewer things you need to deal with, the better. Also, make sure the goal is achievable.
- Get someone to hold you accountable: This partner can actually help you achieve one or more of your resolutions.
- Be ultra-specific: Big and general goals are harder to attain than more specific goals that are shorter-term.
- Piggyback your resolution on a current strategy: Combining a goal with a successful process already in place will make it easier to achieve.
- Give your resolution a trial run: If your resolution isn’t proceeding in the first 30 days, adjust the goal.
- Trick your mind: Not to be confused with “lying to yourself,” find ways to show that you are making progress.
- Visualize the end result: Imagine the carrot, not the stick as you proceed with your resolution.
- Monitor progress and celebrate wins: It is easier to achieve a goal that is measured. As you reach milestones, celebrate wins. If progress is slow, don’t be afraid to adjust your goals.
- Set daily reminders: From post-it notes … to calendar inserts … to measurement tools, remind all involved of the goals that have been set.
- Start today: Procrastination is the enemy of achievement.