Customer Experience Trends in Banking
Personal banking is rooted in convenience. With the rise of mobile banking and other forms of digital financial management, it’s become easier than ever for banks to offer customers a great experience. From drive-up tellers to ATMs, it’s never been more accessible for customers to manage their finances quickly and conveniently. Still, there are plenty of areas for improvement, which is why financial institutions are constantly looking for ways to up their game.
Here are some of the top customer experience trends that banks should watch for to maximize success.
New and Improved Digital Services
Customers are increasingly demanding a digital, user-centered banking experience. Before the pandemic, digital-only customers accounted for just 30% of the retail bank customer base. In 2021, 41% of customers were digital-only, and satisfaction was shown to be highest among customers who experienced high levels of digital engagement.
Mobile banking allows customers to make transactions and keep track of their money from the comfort of their own homes and on the go, so it’s easy to see how digital banking has forever changed the finance world for the better. To remain competitive, banks have no choice but to offer digital services and will press them to find even better solutions heading forward. It’s likely that in a post-pandemic world, customers will expect more contactless payment options and a higher safety standard when visiting branch locations.
Increased Focus on Human Connection
It may seem contradictory that a more digitized world calls for greater human connection, but that is certainly the case for banking. If there’s one downside to the growing trend of digital banking, it’s the loss of human connection. In the past, it was common for customers to visit branch locations and meet with professionals who could address their needs on a personal level.
Now that most of these services have moved online, many customers rarely get to see and interact with those helping to manage their finances, resulting in a disconnect that could spell disaster for branch locations if the pendulum doesn’t swing back to the center. The challenge for banks will be to find ways to implement improved digital services while also maintaining a level of personal contact with their customers.
Although digital banking services have been proven to increase customer satisfaction rates, there is no replacement for human connection. Research by Accenture highlights its importance and why banks should continue seeking ways to connect with their customers, even as digital banking grows in popularity. It’s vital to connect when customers are trying something new, as Accenture studies demonstrate—47% of customers prefer to speak to an actual human at a physical branch location when researching, applying, or buying a new financial product.
Broader Outreach to Underbanked Communities
In 2017, more than 8 million US households were unbanked, meaning that no one in the house had a checking or savings account. Underbanked customers refer to those that either: do not have access to a bank account (unbanked) or those that do have an account but regularly use the services of non-traditional financial institutions. Unfortunately, underbanked customers have a detrimental impact on the economy, racking up costs from $1.8 billion to $4.5 billion per year. Most of these costs go towards money orders, check cashing, and other financial services required by those who do not have access to traditional banking accounts.
Banks must find ways to reach the unbanked population, and the solution may lie with fintech and the Community Reinvestment Act (CRA). Enacted in 1977, the CRA urges financial institutions to meet the needs of low-income communities, which frequently overlap with underbanked populations. By consulting with CRA guidelines and addressing the underlying causes of the underbanked issue, banks can help to provide greater access to financial services to populations that lack them.
Reduced Customer Friction
The term “customer friction” is used to describe anything that causes customers to hesitate as they pass through your conversion funnel. Some of the most common examples of customer friction include poor website quality, long wait times, limited business hours, and difficulty making payments. Customer friction is especially prevalent in banking, so it’s become crucial for banks to reduce the number of mishaps and bumps in the road their customers experience when trying to do business with them.
Digital innovation has led to unprecedented access to financial services. Younger generations, in particular, have gotten used to their needs being met in a timely, convenient manner. To meet these heightened expectations, banks should work to improve their digital infrastructure and train staff to assist customers at branch locations effectively. Offering better customer service is a great start, but heading into the future, it will become even more critical for banks to look for ways to prevent issues from arising in the first place.
Greater Reliance on Digital Signage
Physical branch locations are still far from becoming obsolete, and many customers appreciate being able to visit banks and receive services in person. One of the best ways banks can improve the customer experience is by implementing digital signage, which can fulfill a self-guided or unassisted sales role. When placed strategically, digital signs can direct customers and help them find what they need without consulting with a staff member. This can be especially useful during peak hours when lines are long and the staff has their hands full.
You may find that digital signage is more helpful to customers, as live staff members may not always be as knowledgeable on your products and services as you’d like them to be. Digital signage can also inform online customers of wait times to speak with bank personnel and provide contact information such as phone numbers and social media handles. More and more banks recognize the value of digital signage and are working to incorporate it into their business operations.
Fostering Trust and Community Engagement
Trust is foundational to the customer experience, and this is true of the banking world and all areas that deal directly with customers. In the past, banks existed to meet the financial needs of their customers, but banks of the future are putting a greater emphasis on actually getting to know and building relationships with customers. Following up with customers and asking them to review their experience is a great way to get to know customers better and understand their needs on a deeper level.
Further, by performing community outreach and supporting nonprofits with volunteers and donations, banks can grow by improving the wellbeing of their communities—put simply, when the community does well, the bank does well. Getting involved in the local community is also great way to get your name out there and inform the public of services.
See How Teksetra Can Help!
The future of banking is heavily dependent on improving the customer experience. By observing and implementing emerging trends in the space, banks and other financial institutions can be better equipped to tackle the challenges they may face going forward and continue to innovate to provide better solutions to meet their customers’ needs.
Teksetra provides financial solutions, including IT support and project services, that can help you improve the customer experience. Reach out today to learn more!
Banking Technology Trends and Practical Steps to Implementation
Is fintech today’s “shiny object” to be swatted away by big banking? The characteristics of the models show that the gap is not small, the answer is not simple, and fintech cannot be ignored.
2021 Digital Banking Report: Open Banking Thoughts
Open banking and embedded finance go hand-in-hand to deliver innovative solutions to customers, and the Digital Banking Report explores some of the key industry trends to watch going forward.
2022 Financial Institution Trends: ‘Unbundled Banking’ Will Stick Around
In the past, banks essentially tried to offer a bundle of services. Most consumers turned to one financial institution for all their financial needs. If that institution could not meet their financial needs, they would look for an institution with a bundle to address their needs.