3 Ways Savvy Bank Leaders Are Competing on Digital Experience

Thanks to the pandemic and the rise of fintechs, accelerating digital capabilities in order to win, serve, expand, and retain customer relationships has become priority #1 for traditional banks.

During this time, over 73% have seen a majority of their customers adopt digital channels. But the transition has been bumpy and churn is on the rise: 25% of financial services customers switched their provider in 2020, with dissatisfaction as the top reason. Meanwhile, U.S. fintechs are reimagining banking experiences and business models, and they're taking share — consumer fintech adoption rose from 17% in 2015 to 46% by the end of 2019 as the number of fintech start-ups jumped 35% to 8,775 between 2018 and 2020. By 2025 the number of US neobank account holders is expected to reach 40 million.

Not even savvy bank leaders anticipated the pandemic and how it would accelerate changes in banking. But they didsee digital disruption and fintechs coming, and they had geared up to design and deliver better digital experiences.

In addition there are common threads among these leaders in terms of their commitment to continuously listening to customers and acting on that feedback in order to deliver great experiences — and react fast to bad ones — in the moment. And, they put customer listening at the heart of every effort to transform journeys that matter most to customers and the business. It’s not just by listening to the vocal minority, the 1% who take the time to complete surveys. They're also leveraging AI-powered voice and text analytics to analyze calls, emails, chat logs, social posts, and other data sources.

They're using digital experience capture and analytic tools to track mobile app and website session activity to uncover in real time what's not working in order to quickly reduce friction and improve ease of those experiences. Armed with these insights and a bias toward taking action at scale, they’re driving business value from customer experience in three key ways.

#1: Simplifying buying journeys

Expanding existing customer relationships and winning new customers entering the buying journey is where revenue comes from, so this is job #1. Leaders are investing in the ability to quickly uncover and solve for where customers are dropping out of buying journeys, such as in the process of signing up for a new credit card, loan, or checking account, and in identifying, testing, and implementing ways to make it easier and faster for customers to move through the stages of considering, learning about, applying for, funding, and using accounts in order to raise conversions which, in turn, drives revenue.

They look for opportunities to innovate across the end to end journey as opposed to optimizing a particular interaction or transaction. Take the experience of onboarding new accounts. Leaders have moved past optimizing individual steps necessary to open an account to reimagine ways to welcome, engage, and deepen relationships with new customers over the critical first 90 to 180 days, in addition to eliminating barriers from the process of opening an account.

#2: Prioritizing experience fixes that save time and money

Leaders need to keep an eye out for “twofer” opportunities to reduce friction and differentiate experiences that can grow loyalty, as well as improve efficiencies that have clear cost reduction impacts. Basic examples include improving mobile check deposit UX to reduce costly branch visits, or simplifying login and password reset UX to reduce contact center call volumes. Straight-through automated “touchless” processing and instant decisioning on small dollar personal and credit lending journeys can grow revenue while reducing costly back-office human processes.

But it's easy to fall into the whack-a-mole trap of finding and hammering out friction points without strategic direction. Leaders should take a more proactive, intentional approach and operationalize how they manage digital experience improvements and innovation. They must prioritize where to focus according to business needs and customer feedback, define and track financial outcomes, get the approvals, and marshal the resources across functional and business teams to affect the change.

#3: Humanizing the digital experience while digitizing the human experience

The pandemic accelerated digital banking improvement efforts in order to reduce in-person interactions as well as to cut costs. But focusing on digital functionality often comes at the expense of enabling human connections that form valuable and lasting customer relationships. A Monigle study, in which 8,500 banking customers were invited to evaluate 50 leading financial institutions on factors related to customer satisfaction, found that most banks fell between “not bad” and “not great,” while a few were vastly out-performing, highlighting the opportunity banks in the industry have to humanize their interactions.

Despite increasing customer adoption of digital channels, finances will always be a source of worry and anxiety for most people. That’s why 84% of customers want to discuss their banking needs with a human at some point in their important financial journeys, like getting a mortgage or saving for retirement. Making it easy, fast, and seamless to reach a service agent or banker by phone or via live chat during an online session is rapidly becoming a moment of truth table stake that can grow business or, if poorly delivered, drive attrition. Bridging digital and human experience with video interactions, online appointment setting and interactive tellers is also on the rise. More than half of banks are using or plan to use remote video for customer interactions.

Nearly three-fourths of customers want the convenience of online appointments. At the next level, digital experience leaders are strengthening human-centric experience and UX design skills, and systems in order to create holistic multi-channel experiences that appeal to emotion and feel more human throughout. And, they are advancing in using customer data platforms, predictive journey analytics, real-time interaction management, and journey orchestration tools to create hyper-personalized experiences.

The point is that the more that digital becomes the primary channel for banks to interact with customers, the greater the opportunity is to innovate and stand out in the sea of sameness in banking by humanizing digital experiences across channels that help build lasting relationships.

By Daniel Brousseau, Senior Director, Solutions Principal – Financial Services at Medallia