The digital banking landscape has yielded many advantages for banks, creating new opportunities to engage customers and grow relationships. Digital banking will continue to grow, especially among young consumers, with 79% of millennials showing the most interest in utilizing digital banking platforms. However, the way financial institutions (FIs) define “digital” will have to change to accommodate the modern consumer.
Early industry definitions of “digital” narrowly focused on self-service fulfillment as a stand-alone channel. Although this solved a tactical need, this way of thinking was far too banker-centric and resulted in financial institutions arriving late to the ball game—virtually eliminating any competitive edge, especially in the early awareness and consideration customer journey phase.
Instead, “digital” should be defined as a strategic competitive differentiator that engages consumers early and intelligently, based on their needs during the customer journey. This can involve detecting needs, advising on financial planning, servicing customers in their channel and time of choice and proactively seeking the voice of the customer to drive future relationship growth.
Digital leaders are engaging consumers earlier in the customer journey and addressing the following key areas:
- Omnichannel interconnectivity—the ability to start in one channel and finish in another
- Detection of needs through digital sensory
- Abandonment detection and re-engagement
- Data-driven automated decisioning
- Automated and personal engagement throughout the customer journey
- Market segment personalization and relevant content
- Voice of the Customer (VOC) insight and satisfaction measurement
- Analytics and KPIs providing actionable management insights
The role of banks in omnichannel modernization
Financial institutions have a significant advantage when they can provide a human touch. Customers prefer the convenience of digital but highly value human access and financial expertise. As the transactional role diminishes, customer service and the advisory role of providing financial education must increase.
While digital offers many benefits, trust is one gap it cannot fill. Human interaction drives trust and remains highly valued by customers. For example, branch and contact center personnel play a significant role in customer acquisition, clarifying options and offering guidance and assistance.
FIs can also focus personal engagement on serving broader needs that require a consultative approach. A holistic approach supports customer financial well-being around significant life events such as marriage, a home purchase and college tuition savings. Doing what’s best for the customer increases loyalty and, ultimately, profitability.
Human integration in an omni-delivery strategy becomes a central pillar of a successful customer delivery strategy. Integration means “seamlessly embedded” and is much different from a stand-alone model. This model allows authorized employees to perform any function in a branch, including sales, monetary, fulfillment and service. The customer has access to human services that are fully integrated with the digital solution.
Challenges for digital engagement
Although the digital environment brings new opportunities for customer acquisition and engagement, it also presents several challenges.
One such challenge is customer journey misalignment. Traditionally, bankers have enjoyed face-to-face relationships with customers. Banks can influence them during the early awareness and consideration stages of the customer journey. However, with consumers becoming more tech-savvy, they are increasingly researching brands and solutions digitally. This results in institutions often being unaware of consumer needs, intent and propensity to purchase during those early stages. Therefore, banks lose valuable opportunities to engage, educate and influence purchasing decisions.
Customer experience expectations bring another challenge that banks must overcome. Modern customers want to know that their institution cares for them. A lack of customer understanding leads to a reduction in content relevance and loss of connections. Banks must have a deep understanding of segmentation to remain relevant. With consumer empowerment on the rise, it’s challenging for FIs to have clear visibility of customers’ intentions and behaviors, including their needs, desires, frustrations and attrition indicators.
Abandonment can also present a difficult obstacle, especially in an increasingly digital-first world where face-to-face engagements are reduced. Consumers can become frustrated with channels that are cumbersome and disconnected, or systems that are unreliable and error-prone. Additionally, post-purchase hurdles and a lack of access to human assistance also account for abandonment. Successful retargeting strategies can recoup abandonment and assist customers through process completion.
As digital appetite increases so does risk in areas such as fraud, customer authentication, credit decisioning and self-service fulfillment. Enhanced and vigilant fraud detection and mitigation support a new digital delivery strategy. Technology and predictive analytics can not only solve these issues but also open new opportunities to extend customer engagement to include the awareness and consideration stages.
Another drawback of digital adoption is the reduction of staff contact with customers, but a consolidated view of customer information and activity increases a bank’s ability to capitalize on every customer interaction. Having robust customer knowledge involves a 360-degree view of institutional knowledge obtained through digital and physical channels.
Despite the challenges of today’s banking landscape, it is mission-critical for institutions to use a mix of human and digital channels to accumulate customer knowledge in a self-service environment. This in turn fosters a positive relationship between FIs and consumers that is built on trust and loyalty.
As senior vice president of business development, Todd Robertson works with the largest financial institutions and healthcare providers in the United States to demonstrate how ARGO solutions can transform customer experiences and improve operational efficiency.
