Reimagining Banking’s Customer Experience for the Digital Era
Banking’s Customer Experience definitions are evolving at a rapid pace. For decades, banks have focused on their core functionality: providing financial services for their consumers. However, in recent years, the industry landscape has shifted. The rise of omnichannel experiences and digital platforms has led to customers not only wanting, but expecting, a white glove user experience from all the products they interact with – one that is consistent, intuitive, and generates trust and excitement.
The financial industry has not been exempted from this paradigm shift. In fact, it has been one of the industries disrupted the most by digital technologies. The rise of digital has highlighted the stark difference between traditional financial institutions and digitally native neobanks, whose customer-centric interfaces turn the typically stressful endeavor of dealing with finances into a painless – even exciting — experience.
Traditional banks are now at an industry inflection point, struggling to keep up with a rapidly-shifting digital economy and challenger bank competitors.
Will they be able to pivot to use tech innovation to meet the needs of modern consumers, or will they fail to remove the barriers keeping them from leveraging digital and reaching their full potential?
The Challenge for Traditional Banks
Finances are a dominant source of stress– from 2007 onwards, no matter the economic climate, money has remained the top stressor in the United States. Banks are interwoven with finances, and thus also create stress as consumers interact with them. Additionally, only a small percentage of millennials trust traditional banks to be fair and honest.
As a result, consumers looked for new options and found one: neobanks.
Digitally native banks were able to build superior experiences for members and solved core banking issues that incumbent players created — they developed a flowing and personalized customer journey, created goal-oriented and innovative in-app features, and most importantly, understood and addressed consumer pain points in order to build trust.
Bain found that many are now rapidly adopting products from agile neobanks and giving fintechs higher loyalty scores than the average traditional bank – through creating a stellar user experience, digital disruptors have become the mainstream option for banking and finances.
How to Create a Better User Experience
There is still hope for traditional banks –
EY found that their long relationship histories and well-known brands mean they are well-positioned to rebuild trust.
Over half of consumers say a personalized experience, quality of care, and a good technology platform are key factors in creating trust in banks. In order to regain lost footing, traditional financial institutions must look to quickly improve and digitize the customer experience and invest in building digital interfaces.
Change takes time, and banks cannot evolve their standard ways of doing business overnight. However, they can start taking small steps to improve user experience. They can look to determine top-priority product features to implement on their digital platforms that meet consumers in the right place at the appropriate touchpoint – this can include personalized recommendations, or live chat customer support (which only 35% of traditional banks currently offer).
According to the UX Design Agency, offering fewer, but more meaningful, relevant and personalized options is a simple step in delivering improved customer experience.
Traditional banks should also look to design their digital channels in a clear and intuitive manner, using data and analytics, in order to decrease the common stress around finances and encourage users to trust in and engage with the website or app – a well designed financial app will inspire users to use it more frequently, while a poorly designed one will push users away.
For financial institutions that don’t have their digital channels fully built out, the first step will be to create them quickly without sacrificing quality. Low-Code development platforms, which use a simple drag-and-drop approach to help users create digital apps without the need for coding, have recently seen massive growth as companies look to rapidly enter the digital era, and can be a key tool for traditional banks.
The way forward for the financial industry
Perhaps in the future, we’ll see more traditional banks and neobanks working together. Neobanks’ disruptive business models and innovative products have been a transformative force in the financial industry. Traditional banks could leverage strategic collaboration with their digital upstart relatives to push forward their own innovation initiatives.
Ultimately, as banks look to craft their digital offerings and win back consumer trust, a customer-centric mindset must be their guiding light as they transition into the new era. Customer experience is king, and in order to stand out among the many other options, traditional financial organizations must prioritize human connection and experience to prevail.