By Steven J. Ramirez
While there has been tremendous growth in mobile banking adoption, most banks are not fully taking advantage of the technology’s capacity to enhance customer experience.
Faced with a confusing array of product and pricing choices, consumers have learned that their smartphone is their best friend. A recent study from the Federal Reserve indicated that 44 percent of smartphone users have comparison shopped with their phone while in a retail store.
Of those savvy, mobile-equipped shoppers, 68 percent changed where they made a purchase based on their instant research. With mobile technology fundamentally changing the way people choose and buy, is banking subject to these same dynamics? How long before visitors to your branch are comparing credit card terms or checking account packages via their smartphone, as they sit across the desk from a banker?
With the widespread adoption of mobile technology has come the realization that information can be available in an instant. Even more to the point, with a smartphone, you can receive exactly the information you need in precisely the moment that you need it. Google Maps can advise you on real-time traffic conditions; Amazon can provide pricing and product reviews; and Facebook allows you to message a friend to obtain advice you can trust. These companies have set the bar high when it comes to delivering on the promise of mobile. When your customers evaluate the experience they have with you, they aren’t just comparing your company to other financial institutions but with all other types of retail businesses.
According to the Fed’s research, in the U.S., more than half of the people who own a smartphone have used their device for mobile banking. Currently, these users are sticking to the basics: Ninety-three percent are checking balances and recent transactions. Fifty-seven percent are transferring money between accounts. Additionally, 24 percent have made a mobile payment in the last 12 months.
While there has been tremendous growth in mobile banking adoption, most banks are not fully leveraging the technology to improve the customer experience. Today, at many banks, mobile is just another channel. It is not the catalyst for growth and transformation that consumers are becoming accustomed to.
In order to successfully capitalize on mobile and social media and stay one step ahead of the competition, banks must effectively deliver customer experiences that go above and beyond yesterday’s expectations. This means delivering personalized solutions that incorporate mobile and social media, enabling consumers to engage with banking products and services wherever and whenever it is most convenient for them. So, are banks ready to meet these needs?
Innovation now is key
When used effectively, mobile apps and social media will serve to support consumers throughout the entire customer journey.
Take purchasing a car for example. Before consumers decide to buy a vehicle, they can use their smartphone to research specifications and detailed product information. By accessing YouTube, they can watch professional video reviews or do-it-yourself vignettes that capture the enthusiasm and first-hand viewpoints of everyday owners. Many auto dealerships now have their inventories online and prospective buyers can know exactly what is on the lot, without having to drive across town.
Through Facebook and Twitter, people can hear what their friends and family think—an important consideration with a purchase such as a new car. The 2014 Automotive Buyer Influence Study commissioned by AutoTrader.com noted that mobile is particularly important for millennials: Half of them used a smartphone to shop for a vehicle.
It’s time to rethink consumer financial services in the context of mobile.
To continue with our auto example, how can your bank make it easier for your customers to shop for a vehicle? One simple step is to optimize your auto-related content for the mobile platform. That may mean making more concise product information available via your mobile app. No mobile app yet? Maybe you start with ensuring that the applicable pages on your website are formatted to display properly when viewed on a phone’s Web browser. Do you already offer a loan calculator or comparison-shopping tools? While these may work flawlessly on a desktop PC, the bank may not have tested its compatibility with both Android and Apple operating systems.
While designing a new experience from end-to-end will have the greatest impact, your bank can begin incrementally. And of course, the principles apply not just to auto loans, but to any product or service you offer.
Design with customer needs in mind
The key to making the most of mobile and social is putting the customer at the center of your efforts. Before engaging your company directly, consumers are doing their homework. They may have solicited input on Facebook, Twitter or Yelp to find out what people say about working with your financial institution. In order to effectively relate to these highly-connected prospects, banks will need to know those customers’ needs and meet consumers on their own turf.
Even if your bank can’t roll out newly designed, mobile-fueled experiences, at a minimum you can be available to customers via social media when they need you. If a consumer takes to Facebook to find out about your loan offerings, can you guide them to the information on your bank’s website? If they tweet a question about rates, compliance constraints may limit what you say in a public forum, but you can remind them of your 24/7 customer service and provide the phone number. Social media can help you connect with customers throughout their decision and purchase cycles.
Advanced analytics can provide the knowledge you need to better understand your customers. Unstructured data, including social media comments, can help financial institutions gain perspective into what consumers like and don’t like about their brand, products and services. Banks can then target what specifically to fix, what products to sell and how to engage.
Going one step further, predictive analytics can effectively transform data from social media and other sources into tailored customer segments based on specific buying behaviors and preferences, allowing the financial institution to improve cross-sell and up-sell strategies. There is a very real payoff from being more customer-centric.
Once the data has been analyzed and the institution understands its customers’ most pressing needs and preferences, the bank can then translate this information into the key functionalities it provides through mobile. For example, maybe what your customers want most is real-time, accurate account balances. This would provide peace of mind when a customer is standing in the aisle at the electronics store, contemplating that laptop purchase.
Mobile and social technologies allow financial institutions to more deeply engage with their customers and enable them to gather valuable insights on emerging customer needs.
Steven J. Ramirez is CEO of San Francisco–based Beyond the Arc Inc., a customer experience and advanced analytics firm that helps financial services clients differentiate themselves in the marketplace. Email: firstname.lastname@example.org.
Online training in digital, mobile and social media from ABA.