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How banks can leverage their digital experiences to remain competitive

customer experience
(Image credit: Image Credit: Georgejmclittle / Shutterstock)

During the pandemic, entire industries have experienced seismic shifts from their modus operandi to almost entirely digital undertakings. One industry in particular that this applies to is banking. Banking is traditionally viewed as a legacy industry that can be slow to respond to the changing times of society, however it is also an essential service that most people can’t do without. As such, banks’ digital experience offerings are increasingly important in the context of the post-pandemic world. 

As a result of the pandemic, more people were online than ever before. For example, more than twice the number of pensioners stated that they made their first online purchase in 2020. The pandemic has accelerated a trend that was already underway within banking, with those more reliant on physical branches finding themselves in a more precarious position. Covid-19 meant that across the world, many bank branches had to forcibly close and are continuing to close. 

KPMG suggested that the lockdown was in fact a catalyst for change.  Banks such as ING were already beginning to turn the traditional branch into something different. The new identity of the physical bank branch might be more akin to a service hub, where people can access a whole range of both financial and non-financial services. With most physical branches forced to shut at times during 2020 and 2021, banks had to accelerate their digital experience offerings in a very short space of time. 

When the pandemic hit, it was financial institutions that had already invested in digital transformation that had a foundation that allowed them to adjust quickly to market opportunities and challenges. Those banks and credit unions that had access to real-time customer data were able to integrate personalization tools into their marketing platforms, and scale new digital products and experiences, giving them a competitive edge.

The importance of leveraging an omnichannel platform  

One problem that presents itself within the ecosystem of digital experience is that there is a growing expectation that it should be entirely seamless. Currently, only a very small proportion of banks have an omnichannel banking platform. 

Customers are increasingly demanding – they expect an experience that feels the same across multiple different channels. In our recent survey, it was found that Net Promoter Scores drastically dropped if customers were forced to switch channels within the same journey, such as opening a bank account. If journeys can be started and ended digitally, Net Promoter Scores remain high, and customers remain engaged.  Banks should strive to dovetail these channels and processes together, to create a blended customer experience journey. This will prove crucial in the years ahead and as such, it will be essential for banks to onboard digital experience platforms that have the capability to do this. 

Being able to start your customer journey from anywhere

Not only must experiences feel seamless whenever they are accessed, but there is also an increasing appetite for them to be completely accessible and familiar, regardless of where or when the customer might start their journey. With the plethora of devices that are now owned by the average consumer, customer journeys can begin through many different devices such as tablets, telephones, desktops and smartphones. If a consumer banks on a device, be it a computer or a phone, or even in person at a branch, the experience should be consistent and contextual based on both the relationship established, and the behaviors of the consumer over time. 

Technology companies have firmly established their digital offerings, ensuring that whenever a customer chooses to engage with their service, they encounter a familiar experience. This has set a high precedent of expectation that banks and other businesses must now follow. The key is to achieve consistency across different channels, whilst also being mindful to cater to individual preferences simultaneously.

Integrating brick-and-mortar experiences into the customer journey 

Although streamlining and modernizing their digital experience processes is important, banks should not abandon their physical branches completely. They should focus on integrating their brick-and-mortar services as part of this new omnichannel mix. 

Physical branches are still an important part of a bank’s touchpoints with its customers. Aside from those not comfortable with interacting digitally, this is mainly for more complex processes, such as mortgage lending. In fact, the primary reason for this is because banks did not traditionally offer these services digitally because the processes were simply too lengthy and complex. In other words, rather than the ‘preferred channel’ for consumers, the branch is often the required channel. There is a renewed demand for this type of complex service to be offered digitally. However, to be successful in this regard, banks should try to adopt a format that is intuitive and efficient. 

The emerging threat of fintech and challenger banks 

The pandemic has put immense psychological pressure on the population - with 36 percent of people suggesting that their finances over Covid-19 cause them the most mental stress - consumers are looking out for banking product solution providers that can save them both time and money. This means that the willingness to purchase financial services from large technology companies with seamless digital experience offerings, rather than from financial institutions, is likely to increase; especially among younger consumers. 

The bigger concern, perhaps, for traditional banks, is that many of these technology companies regularly obtain higher satisfaction ratings – especially in emerging markets. As pure-play technology companies, fintechs, and other non-traditional providers gain more popularity, it will be harder for retail banking firms to catch up if they don’t begin to invest in their digital experiences now. 

Delivering a great customer experience is the key competitive edge of any institution post-Covid. Customers today are demanding seamless customer journeys and personalized services from their bank and their financial service providers. A digital experience platform offers the optimal opportunity for retail banks to deliver this connected, contextual and hyper-personalized experience; to which customers are now well accustomed. It doesn’t have to be daunting to implement this, it can be implemented incrementally and the benefits will soon follow.

Monica Hovsepian, Global Industry Strategist for Financial Services, OpenText