Traditionally, customer experience is not at a bank’s top priority. Online shopping has exploded in popularity to the point you can access almost anything you want from anywhere in the world. It is no different when it comes to financial services.
Consumers are increasingly expecting quick responses, instant access to insight, more control of their financial lives and increased personalization.
With a world of choice only a mouse click away, half of all consumer contact with financial institutions is online. According to the Pew Research Center, 51 percent of American adults (61 percent of internet users) access online banking. With 32 percent using a mobile phone for banking transactions.
There is more product choice than ever before, which encourages consumer disloyalty. According to Accenture research, almost 50 percent of consumers would bank with nontraditional organisations like Apple, Google, and Amazon if they offered financial options. There is no loyalty to traditional banking among new generations. More than 70 percent of consumers between the age of 18 and 35 said they would use non-banks for financial transactions. It is time for banks to act now, especially when other research indicates 33 percent of millennials believe they will not use a bank in 5 years. Furthermore, 50 percent were happy ‘tech start-ups’ are disrupting banking as we know it.
Entrepreneurial start-ups are entering traditional financial markets disrupting old ways of thinking using new technology. They are changing consumer expectations about the customer experience. Meanwhile, banks struggle with how to use technology to transform their businesses. They need to engage customers to deliver a better bank customer experience.
Young consumer attitudes dictate that financial institutions rethink the way they do business. If they do not heed the warnings, new generation consumers will go to their competitors. Consumers want to bank when and how it suits them. Accenture research indicates nontraditional banks could cause a one third decrease in bank revenue by 2020.
Starting the transformation process
So where do financial institutions start their digital transformation? Financial institutions grapple with how to use technology to grow their businesses. While innovative tech start-ups walk into the market with high consumer response to their innovative solutions and customer experience.
Research shows that 1 in 3 millennials would have no problem switching banks in the next 3 months. There is no loyalty to traditional banking among new generations. Banks need to act now, especially when other research indicates 33 percent of millennials believe they will not use a bank in 5 years. Furthermore, 50 percent were happy ‘tech start-ups’ are disrupting banking as we know it.
Watch innovative competitors
Consumers demand better customer service from all industries. They want a better customer experience or they will go elsewhere. The global rise of Amazon with its one click order and delivery service, taught consumers to expect this type of service in all industries. Companies like Amazon, Uber and Google communicate and respond to consumer demands.
Financial institutions need to watch how their competitors transform. Learn lessons from the new ‘kid on the block’ start-ups. Watch how they use innovative technology like instant issuance to disrupt the market.
Build consumer connections
Before the internet, the only communication banks had with consumers was face-to-face through bank branches. Amazingly, despite similar experiences across the banking industry, many banks and credit unions still cling to the branch as the center of their universe; never mind that a third of all retail institutions have seen a sharp drop decline in their transaction volumes. Even though bank branches are dinosaurs in the modern retail delivery model, 40% of banking consumers still open accounts and sign up for new services at branches. Why? Because they want to? Or because they have to?
Even though bank customers want better online services, branches are still central to a financial institution’s service delivery. That does not mean branches are redundant. They are still part of the customer experience. Banks should link online behavior with their branch data to personalize the customer experience. Clever marketers can use this data to tailor products and services based on customer preferences and behavior. Financial institutions need to invest in delivering a better online customer experience.
Listen to consumer demands
Look at what the best at customer experience do to engage consumers to grow their businesses. For example:
To create change, financial institutions need to transform from inside out. Innovative technology and thinking holds the solutions to re-engaging consumers.
IA360’s diverse background in finance, technology and marketing positions them as a global leader in Customer Experience in their space. The only question that remains is: What are you going to do to meet customer demands? Contact us today at info@IA360.com to discuss how your customer’s experience can improve market share for you.