Retail banking customers are ready for a new paradigm in customer experience beyond sleek mobile apps. In the last decade FinTech companies have unleashed an onslaught of all digital, mobile first retail banking products. Traditional Financial Institutions (FI) like banks and credit unions have responded with their own version of mobile app and digital experience.
Underneath the sleek mobile apps consumer complaints about loans that start before full shipment is complete, or difficulty in canceling loans for returned product, are easy to find on the internet. Banks continue to struggle based on CFPB complaints database. Even simple things like closing an account or making a payment show upward trend.
It is time to think about customer experience beyond digital interface. Key components of evolved customer journey rest on omnichannel servicing, micro customization, ease of usage experience and product feature simplification.
Omnichannel servicing is long overdue
Wouldn’t it be great to get an email confirmation when the money is available after you have deposited a large check at the ATM or the app? Or if you can send email about a credit card late fee from your app and someone calls you back? FIs are often managing the servicing experience as independent channels where a customer service agent may not be able to email after a call and customers cannot send an email for a problem that is not in a dropdown menu.
Traditional FIs have incorporated chat and intelligent IVR (interactive voice response) software but are still far away from wowing customers with advanced features like AI based chatbot (vs. a human typing answer in the chat window) or even click to call features from digital portals.
Customer service rarely drives sales but is often key driver of low NPS (Net Promoter Score). Most FinTechs are not at scale and still have ways to go before aligning servicing experience to be at par with their seamless and speedy acquisition experience.
Customization for each individual
We have arrived at the age of micro, Netflix-esque customization. Customization based on each individual’s unique past behavior, one that predicts potential next step before the customer is thinking about it. Broad segmentation is so last century. We are in the age of customization for each unique individual. The technology exists. We all experience it at Wayfair or Netflix to name a few.
Can you imagine your bank's app messaging you a new coffee place that others are using in your neighborhood because you visit Starbucks a lot? Or messaging you in real time when you have spent more than last month or your set budget? Or reminding you to transfer money to IRA (Individual Retirement Account) because you do it at a specific time every year? Given the transaction data FIs have from debit and credit cards and credit bureau information, they are yet to provide any meaningful insight to consumers.
Transparency is the winning product feature
One reason BNPL (Buy Now Pay Later) and installment loan products are so overwhelmingly popular with so many consumers is their simplicity. Those products exude transparency. The same cannot be said about their direct competitors, store brand and general-purpose credit cards. Interest calculation based on average daily balance or deferred interest products are not anyone’s definition of straight forward features. Sure, a few savvy consumers have learned how to maximize their miles or cash rewards but average consumers find checking account or credit card features lacking transparency.
It is time to radically rethink banking product features and divorce hidden fees.
Usage experience backed by robust technology
Many FIs have spent a lot in building digital customer portal and app. But what good is a portal where every transaction is posted a day later instead of real time? Or connecting external bank account takes three days? Or my personal favorite, alert for a transaction declined by the bank for fraud suspicion is delivered 20 minutes after the decline. Features are only as good as the underlying process and technology. Why send a text for fraud suspicion that asks the customer to call back into an IVR to enter their response?
Fintechs get better grade here. Traditional FIs are often suffering under legacy technology. To get Affirm like NPS of +78, wholesale improvement of core processing platform is needed. Real time and near real time feedback on usage are what consumers expect.
So, do we have to wait for a tech giant to be a bank or can FIs meet consumer expectation? I do not want another direct mail for a home equity loan I never intend to take but I do want my bank to know me as well as Netflix does.
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