The banking industry is being disrupted. Pure digital entrants like Monzo, Revolut and PayPal are leaving a significant mark on the traditional players, forcing banks to reshape their customer experience strategy and refresh – or completely replace – outdated and over-complicated systems. And they’re having to move fast to stop customers from switching to others further ahead in the customer experience-led transformation race.
We’ve heard a lot about the power of blockchain, humanoid robots and other fancy innovative technologies with their potential to ‘revolutionise’ the financial sector. But traditional banks really need to focus right now on catching up with CX-led omnichannel services, and more importantly, creating a clear point of differentiation to compete with those currently running the digital scene. Because at the moment, traditional banks are still somehow lagging behind, despite rather substantial efforts directed towards new digital initiatives.
Customer needs are evolving
Customer needs are being redefined through the digital revolution. A recent study of millennials showed 86% were dissatisfied with their ability to access financial services from traditional banks on their mobiles. And – surprisingly – the pure-digital challenger banks are not doing much better, with 85% neutral about their experiences using their services.
What does it mean for the big financial incumbents? There’s still massive scope for improvement in the sector. The needs of modern banking customers are not being addressed effectively enough by either pure-digitals or big legacy banks. Although digital-only players may steal a bite of the millennial and Gen Z market, the reality is that the majority of people expect a seamless omnichannel service that spans across the digital and physical worlds, enabling them to quickly achieve their daily banking tasks – whether they’re hitting the high street or sitting at a sofa at home. This is where traditional banks hold their power. The challenger banks might be winning the race when it comes to quick payments, account transparency and no-hassle international payments, but it’s the big legacy banks that can use their physical touchpoints to create a human connection and deliver real value – but only if they get behind significant service design evolution. To fully win customers over, they need to upgrade and integrate their in-branch and digital services with true CX omnichannel excellence.
The digital – physical (r)evolution
Thinking about brick-and-mortar as the key differentiator from the pure digital players is not enough anymore. With market challengers like Monzo now maturing and becoming fully licensed banks – and branch visits dropping rapidly as compared to previous years, traditional players need to take a big step forward and start defining the future of banking – one that merges the digital with physical to offer an experience that creates meaning. For instance, using crowd analytics or advanced geolocation to provide time-poor customers on their lunch breaks with real-time information on waiting times in their nearest branches. Ensuring that branch staff have up-to-date information on the banking activities of the customer they’re dealing with, so they can provide seamless service. Or creating interactive digital displays in-branch to augment the physical experience with meaningful content.
Physical and digital spaces should no longer sit in silos. Customers now expect their digital and physical world to integrate, collaborate and learn from each other to deliver more relevant and more personal experiences. Digital is no longer constrained to a mobile screen, it needs to augment and accentuate the physical branch experience to deliver meaningful spaces that drive commercial visibility and advocacy.
Of course the demand for personalised, relevant and ‘right-here-and-right-now’ services means banks have to direct a significant investment towards developers, data analytics and CX to transform their in-branch and online experience. Only by doing this will they create integrated financial services of the future. And without understanding customer journeys and key pain points, delivering a successful transformation will be challenging. But there’s no doubt that whoever takes on the challenge will put themselves in a powerful position. By fusing the online and offline worlds to deliver positive experiences and bring the meaning back in-branch, a traditional bank can ride the wave of digital disruption – and out-manoeuvre competitors.