The Digital Banking Evolution: From Transactions to Relationships

The combination of data and advanced analytics allow financial institutions to build personalized relationships that could be more powerful than ever possible. The question is whether banks and credit unions will seize this amazing opportunity.

For decades, the name of the game in banking has been about efficiency. From branches and ATMs to online and mobile banking. From paper forms to digital documentation. And even the emergence of Blockchains and bit coins … we live in a world where the big guys have the biggest budgets and those budgets are largely allocated to cost-reduction initiatives.

Unfortunately, with many of these steps forward towards efficiency, there has been a step backwards in the ability to build better customer relationships. What was positioned as a ‘better way to do banking’ was usually better for the banks more than for the consumer.

Finally, after investing heavily on the digital channel and the technological enhancements it can offer, we are on the precipice of actually using these technologies to achieve better outcomes for customers. The focus is no longer just about creating a pleasing user experience, an attractive visual design and easier ways to get things done. It runs much deeper – to actually driving the technology to go beyond simply making the operations of the financial institution more efficient, to truly adding value to customers’ lives.

Read More: Digital Banking Success Requires a Cultural Shake-Up

Unique Insights into A Digital Evolution within Financial Services

Design firms, agencies and developers need to stay in regular communication with industry leadership teams to gain unique insight into the relative prioritization of initiatives. In the last 12 months, there has been a tipping point. After years of espousing the needs of a more robust and thoughtful digital strategy, user experience, and design, banks and CUs are finally committing the budgets and resources to make it happen.

Success is no longer solely centered around just making the experience look good. The digital channel needs to DO more. It needs to be more than just the pretty face of design and UX. More than just another opportunity to reduce costs. More than just a way to get tasks done faster. To address this, banks are now focusing on evaluating initiatives that can add real value to their customers’ lives.

With this cultural shift inside the leadership teams of financial services firms, a whole new world of opportunities awaits. Digital partners can finally set out to build experiences where great visual design and UX are table takes. Where partners can build relationship engines on top of those amazing visual and user experiences – all while continuing to extend programmatic efficiencies. This means more than just rout role-based personalization. It means delivering platforms that advise the customer based on all available data, making the user journey smarter and more rewarding.

Customers Hold the Secret to Your Success

Every banker throughout history knows the way to build a successful financial services business is to deeply understand the customer and the customers’ needs, and then deliver on those needs. (Actually, every successful business knows this. Not just financial services.)

“The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.”
– Peter Drucker

Today financial services organizations, much like high-technology companies, are realizing the digital channel offers them the best possible opportunity to engage their prospects and customers. Soon, there will no longer be such a thing as the one-off relationship.

What we are doing today as an industry is simply not smart. If you likened it to the brick and mortar world, it would be like treating each customer that walked in the doors to a shop the same products or serve regardless of whether or not you had met them before.

It’s like institutionalized amnesia or blatant complacency. It is not smart business. And if the owner of the shop didn’t train or fire the store representative for not being able to recall and address each customer uniquely they would be fired,

I mean what an absolute waste of time! Can you imagine? What if I told you that there is a new store in town and the store owner had the ability to know everything about the customer before they entered the store but he chose not to know. He chose instead to approach each customer blindly.

You would think that would be nuts – right? But that’s exactly what we are doing today for financial services firms.

In the next couple years, the vast majority of customers that arrive at a financial services website will be well known immediately. The user will not show up blind as an ‘unknown’ like the preponderance of financial services website users today.

We need to build digital experiences that are self-aware. They need to be centered around the customer and their needs. These experiences will need to predict and address the customer need.

Creating a Win-Win Proposition

The next wave of growth for financial services will need to be a win for customers as much it is for the bank. Like any successful business venture – it must be a win-win proposition.

“A satisfied customer is the best business strategy of all.”
– Michael LeBoeuf

By using digital personalization and predictive analytics, we will be able to create digital experiences that are laser-focused on the customer’s individual needs. These insights will be gleaned from multiple data sources as well as actual historical behavior in the digital experience – both on the bank site and other related sites. The ability to pinpoint these unique customer needs and deliver on them will enhance customer satisfaction, while connecting the bank with every possible customer opportunity.

Banks need to get the basics right. A strong strategy, UX, and visual design. They need to automate experiences and use customer data and insights to deliver personalized touch points. Ultimately, those might be personalized transactional experiences, but the customer will FEEL understood. They will have a positive experience rooted in service and care that feels relational. And as we know in today’s word, regardless of industry – the experience IS the brand.

The history of banking was personal. The last 50 years have been transactional. The future will be personal once again.

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