Banking executives around the world are wrestling with the impact of fintech on their businesses. While they understand that consumers want the same simplicity and ease of use in banking channels that they have in digital retail interactions, bank leaders must also weigh the costs and benefits of these innovative technologies. Avoiding disruption and keeping pace with rapid market change is weighed against worries about the stability and security of developing fintech solutions.
For me, the customer experience versus technology issue can be reduced to one idea: my thumbprint. Like many consumers, I do my banking online and on my mobile devices. Channeling Brett King, who famously wrote that banking is no longer somewhere you go but something you do, I use mobile devices for tasks like depositing checks and transferring funds. And because I’m a loyal customer, all of my accounts are with the same bank. To me, digital banking is the only way to go.
Until I upgraded my phone to the iPhone 7. The device has new touch ID fingerprint feature, which lets users unlock their phones, authorize purchases, and access apps using just a thumbprint. Unfortunately, the biometric technology was deactivated in my bank’s mobile app during the move to the new iPhone 7. Until I realized this and activated the touch feature, I had to revert to entering a password, which is an irritating, error-prone exercise that makes me want to avoid opening the bank’s app altogether. If you’re keeping score, it’s fintech 1, Carl’s digital experience, 0.
Modeling interactions on retail experiences
I’m not alone. When it comes to the customer experience, consumers don’t discriminate between retailers and banks. People who can “swipe” on Amazon or continue an interrupted retail transaction across multiple devices understandably expect their bank to offer them relevant products and services in a technically optimized, personalized interaction. Unfortunately, too many banks operate as if they are still in the 20th century, making digital a secondary channel to branches, to the dismay of these highly empowered customers.
Banking leaders know that something needs to change. In a recent survey of 500 executives about their 2017 priorities, 70 percent said that improving the digital customer experience was a top strategic imperative. Redesigning and enhancing the digital experience is key to this shift, says Jim Marous, co-publisher of The Financial Brand and publisher of Digital Banking Report.
Consumers want processes that are seamless, intuitive, and easy, whether they are handling payments, opening new accounts, or engaging in other typical financial activities. And it’s not just millennials who have these expectations. Plenty of GenXers and baby boomers – you know, your most profitable customers – are also digital customers who want a better experience.
Recognizing this reality, one traditional bank in Canada redoubled its efforts to transform itself into a digital financial services company. By combining some cutting-edge technology with its enterprise financial systems, the bank created online channels that allow consumers to choose a product, such as an account or a credit card, and place it in a shopping cart (sound familiar?) and easily “check out.” By making it easy to do business with, the bank helped customers to feel as though their experience is a priority. A growing customer base and an increase in accounts, deposits, and loans prove the bank is on the right track.
Blending old and new
Interestingly, the Canadian bank made this shift without retiring its business systems and handing everything over to a crowd of fintech vendors. This bank and several other financial services firms wanted to enhance rather than replace the solutions that were already working. So they turned to proven, established enterprise software vendors that they already know and partner with.
These vendors offer technology solutions that help banks deliver an optimized customer experience, one that extends across all touch points and is consistent across all channels, yet is also optimized for each channel. These solutions offer the stability and security banks need to protect their data assets, mitigate risk, and meet regulatory requirements – while remaining open to innovative fintech solutions. By offering data analytics that produce actionable insights, these products can help banks can deliver a personalized, contextually relevant experience. Some even offer predictive analytics that highlight likely customer behaviors and prescriptive analytics that support customer recommendations, demonstrating a clear understanding of the consumer’s needs and priorities – not just for today, but for future needs.
An enhanced customer experience is the primary target for today’s banks. Yet financial institutions must find ways to use technology to support this goal without increasing cost or risk. There are many ways to achieve these goals, each as individual as a thumbprint. Do you think your bank is ready to get started?
For more insight on digital transformation in banking and the financial industry, see How Banks Approach Digital Transformation.