Banking is getting better – faster, easier, more mobile, more connected, more transparent, and more personal. And, for many banks, there has been a very public and intentional renewed focus on customer advocacy – on rebuilding the trust lost during the financial crisis. Yet, despite years of ad campaigns, a full 63 percent of consumers believe banks only care about their own interests.
We believe banks must bridge the divide between what they say they do and what they actually do with a new service orientation that responds to customers’ needs, wants, and desires. The future of banking is about enabling customers to realize their dreams.
Earning public trust is a matter of the customer’s banking experience living up to the brand’s promise. This hinges upon a detailed understanding of the customer’s changing expectations, particularly the need for purpose. We are seeing leading banks flip the current simple view of the customer, and endlessly complex view of the product set, on its head.
The successful bank will have a refreshingly simple product set built around relationships, and a more nuanced understanding of customers and their needs for breakthrough experiences. The bank of the future will act on its wealth of customer data – a shift in emphasis from systems of record (data stores) to systems of engagement (informing customers).
Seventy-five percent of global banks are now investing in a customer-centric business model, marking a profound transformation of their business and culture. Banks recognize that people don’t buy a loan. They buy a car – the loan is the enabler. Yet still, banks often lead with the product. Bank brands continue to speak to their consumers in a siloed, product-based way in part because the banking culture is risk-averse and overwhelmed by disruption, regulations, and the economy.
Most banks focused on fixing the foundational aspects of usability and usefulness will, over time, shift toward experience as they earn the right to delight. Winning customers will require going beyond the “zero-sum game” of rates and products; it will require a new focus on experience and delight. It isn’t just about features; it is about the emotional connection or what we, in the experience practice, call “sense.”
The delightful omnichannel banking experience does not yet exist and remains a white space for the first bank to deliver. These experiences require significant investment; however, banks’ current technology spend is increasing at a slower rate than other industries. Even as banks prioritize their money toward omnichannel solutions, their overall IT budgets are growing slower than retail, manufacturing, or business services. Banks also tend to have older technology stacks, further reducing flexibility and increasing costs.
Like a fantasy football team, we can imagine creating a fantasy finance team with the best touchpoints in the industry. Our favorites include Capital One 360 Cafes, Mint’s personal finance management, the cardless ATM and Touch ID of RBS, safe-to-spend by Simple Bank, Wells Fargo’s cross-selling, the high cap on Ally mobile deposit, and USAA’s customer service. Pick your own favorites and imagine them tightly integrated to deliver on your brand’s promise.
To deliver banking in the customer experience era, banks are looking inward as well. The internal organization of banks – traditionally built around products and strongly siloed – has inhibited strategic change. We’ve started to see the development of entire new ways of aligning and organizing talent – from RBS’s “journey managers,” to U.S. Bank’s new omnichannel organization, to TD Bank’s “Direct Channel” organization. Banks are developing structures that help their employees look across products and focus on the customer experience. Banks are restructuring to implement their customer-centric business strategies.
When looking at the ambitious capabilities in the fantasy model, it is impractical to invest in everything. In our conversations with banks, we often work down into the weeds with discussions regarding individual components of the consumer experience – components such as the website, mobile payment, the branch, and the role of social. There’s a tendency to focus on novel technology in an attempt to keep up with competitors who offer features such as swipe balance, video ATMs, or Apple Pay. However, we recommend starting with table stakes features, focusing less on being first to market and more on how to package the features together.
While individual touchpoints (e.g., mobile, ATM, etc.) between banks and their customers have advanced in isolation, a seamless, holistic packaging of these touchpoints has yet to occur. It’s their combination that will accelerate the vision of humanized and enjoyable banking.
To read more about the process of building an omnichannel financial experience, including a “traffic light” model for investment, download the full article PDF.