Digital people demand digital banks

We are on the cusp of a digital revolution in banking but we don't yet know enough about how people interact with their banks

We are on the cusp of a so-called digital revolution in banking. The concept has been talked about for a number of years but, until now, there has been little evidence to describe the choices people are making around the ways (also known as channels) they interact with their banks, writes Mark Jopling.
There has been an expectation that as people become accustomed to the new ways of communicating in their everyday lives, this trend would then permeate in the financial services industry. Indeed, we have seen many banks, building societies and insurance companies changing their strategies to focus on where consumers are spending their time – whether that’s Facebook, their smartphone, a new shopping centre or their route home from work.
BT and Avaya’s recent survey of 2,000 banking customers shows how this trend is playing out. In the two years since our last Youbiquity Finance study, the average number of channels used by consumers to contact their bank has grown by an astounding 44 per cent – evidence that the multichannel banking customer has arrived. This growth is driven by the rapid rise of mobile banking and apps at the same time as an increase in consumers using website FAQs, branch self-service machines, web-chat and social media to communicate with banks.
The opportunity for financial services providers is no longer about choosing between full or self service, this channel or that channel. It’s about meeting consumers’ needs at two interaction levels. Firstly, making everyday interactions fast and simple and secondly, creating content, insight and answers to help customers make the right decision.
Newer ways of interacting will gain ground
When it comes to managing their finances, people want to use a range of channels. Offering new channels and integrating them so that consumers can move seamlessly from one to another should be a priority for banks. For example, today’s consumers are using a range of channels to buy new financial products. For researching products and services, the internet dominates, but face-to-face meetings and phone calls continue to play an important role in the final sale. In fact, the face-to-face channel is the most popular for all purchases, except general insurance.
Two channels that stood out in the research were web-chat and video chat. In total, 55 per cent of consumers have used web-chat to interact with organisations, but the challenge for financial services providers is that only 41 per cent are confident sharing their personal data in this way. However, the benefits of web-chat to users are clear, with consumers valuing the record of their conversation and the ability to look, and jointly view, information on screen (provided by the advisor).
The progression from using web-chat to video-chat is becoming more likely with the growth of video culture. More and more consumers are using video in everyday life as a basic means of communication.
The benefits of video include adding to understanding, improving emotional connection and helping to make choices according to the consumer’s needs. These are important to financial services firms who deal with complicated products and need to build customer understanding and trust. Consumers still like to see ‘the whites of the eyes’ of salespeople before making a commitment to buy.
In the case where instant answers are required, using web-chat but offering the option of video-chat will have strong customer appeal to consumers. The benefits for consumers are immediacy and personalised service.
Change will be the only constant in the retail banking industry in the coming years. Banks are changing, personal finance is changing, technology is changing – and customers too. In this environment – where people are becoming ever more empowered about their own financial management – banks need to focus on making everyday interactions fast and simple and creating content, insight and answers that help customers make the right decisions