Basic Banking and Beyond; The Customer Speaks

Trust (as in safety, security, fairness, transparency and reliability) is a key driver.

It separates highly satisfied consumers from less satisfied ones, and that’s a fact. A fact proven by FIS’s Consumer Pace Index, which showed that regardless of age or nationality, banked consumers expect their banking providers to get basic trust factors right. These trust factors (aka “satisfiers”) form the foundation of banking relationships, and without them financial service providers will not get high scores when it comes to customer satisfaction. Without trust, customers are less inclined to recommend their bank and the likelihood of making their next service or product purchase from their bank plummets to zero. Let’s face it, banks have to solidify customer trust before they can aspire to cement, or grow, future financial services relationships. What’s a bank to do?

CHASING THE DRAGON – SECURITY IN AN INTERCONNECTED WORLD

Security is a tough one. Protecting customers from all types of financial crime, and attempting to provide cyber-security in an increasingly inter-connected world is a very large undertaking. Fraud in financial services will cost businesses close to $15 billion globally this yearand the majority of fraud growth can be seen in the United States. The adoption of ‘chip and pin’ EMV technology is just one reaction by the US market to attempt to wrestle fraud to the ground. Advancements in emerging technologies, from biometrics to blockchain, are also showing promise for banks anxious to protect fragile relationships in a changing marketplace.   Whatever the antidote, lack of safety and security would be a non-starter for the world’s banked consumers, and that could be a dangerous disease.

TECHNOLOGY ENABLED TRANSPARENCY

Consumers expect technology to deliver transparency, period. The days of customers waiting for a hand delivered, ‘month-end statement’ are gone and we all know it. New technologies are enabling customers to see how individual transactions are affecting their overall financial picture, in real-time, and that means no wiggle room for banks. Endless information and improved analytics are engaging more educated consumers who will evaluate and compare every fee and fine in front of them, and they will be looking.

Consumers now expect to engage with their banks, as well as take part in the entire banking process, and that means a two-way conversation with customers where everyone has the same information, clearly presented and honestly depicted. The traditional, patriarchal relationship between bank and customer has given way to a more collaborative symbiosis and banks that use technology to enable transparency, building trust and opportunity will grow, while others will wither on the vine. Fairness with fees and fines, and technology enabled transparency will be the new battle cries for banks moving forward.

UP CLOSE AND PERSONAL

Other results from FIS’s Pace Index show that globally, customers find that banks are outperforming their expectations in providing digital and mobile convenience across channels. That’s good news! But survey findings also show that banks have the opportunity to engage at an even deeper level with consumers. Consumers asked banks to use new technologies and channels to help them gain more control over their finances, ultimately enabling them to achieve their financial goals faster. Not surprisingly, the desire for a more enriching, banking relationship was overwhelmingly based on age, rather than on nationality. This finding proves again the common perception that millennials (or people under 35) are a unique cohort who need to be targeted differently. Future health for big banks will be predicated on their ability to meet next generation expectations and deliver a new type of banking that helps customers think, plan and live, and not just transact.

THE ELUSIVE STATUS OF TRUSTED ADVISOR

No one in their right mind would argue that the brass ring for banks would be to achieve trusted advisor status – but what does that mean and what will it take as we move into the digital age? Banks don’t have it easy. The term ‘trusted advisor’ means different things to different folks, and banks will have to please 60+ baby boomers, 40-year-old Generation Xers and Millennials in their 20s, exactly as they prefer. Inquiring about customer preferences, as FIS did with the Pace Index, is just the first step in a journey toward the two-way conversations banks are going to have to employ with their customers going forward. In his book “Who do you Want your Customers to Become”, Michael Schragepredicts banks will have to build capabilities to “segment, socialize and skill” their customers in order to communicate with them. True customer collaboration will be a new trick, perhaps difficult to learn for an industry used to creating products and services, and selling them in a traditional fashion.

BANKS AS FINANCIAL FACILITATORS – ADVICE FOR ASPIRATIONS 

To re-imagine the bank/customer relationship of the future, we have to leave most of what we know at the door. Exponential data, artificially intelligent analytics, unprecedented digital design and reach, are the tools that will be used to transform tomorrow’s banking. Through the Pace Index, customers told us they are going to need connectivity to better control their finances, and the ideal advice on strategies to best reach their personal aspirations and financial goals. If banks get it right, customers will start relying on them for daily spending and savings advice, and look to them to help interpret how present day habits might affect their long-term financial objectives. The information and supporting data banks will be able to offer customers, in any place and through any channel, could allow financial service institutions to establish a new advisory relationship. This will be the dawn of a new era that is collaborative, open, honest, mobile, and truly trusted in an even deeper way.

REALIZING THE DREAM

Being a better bank won’t be easy. To meet customer expectations on a consistent basis and continue to build deep bonds, will require innovation at a perpetual pace. Ecosystems, made up of external startup communities and fintech developers, will be essential. Unearthing new capabilities and constantly improving inter-connected, global networks to share them is crucial. Cost savings and process efficiencies will be key to loosen up the funds needed for investments in innovation, with all efforts united in the common goal of providing the best and most valuable financial strategy for the client. Banks will have to get focused, employing rapid experimentation to explore and validate new prototypes, while also keeping their eyes keenly trained on the vast horizon that is finance’s future. In the end, it will be the banks’ people that figure out how best to reach customers and stay relevant. Ultimately it’s still people to people, even in a digital age.

 

REFERENCES

  • 1 http://www.businessinsider.com/the-us-accounts-for-over-half-of-global-payment-card-fraud-sai-2014-3
  • 2 https://hbr.org/product/who-do-you-want-your-customers-to-become/11245-KND-ENG