Providing a Frictionless Banking Experience: What Banks Can Learn from Apple

By Joe Salesky

As the pace of change in the financial services industry continues to escalate, banks are faced with the dilemma of staying relevant while continuing to grow profitability in an increasingly competitive marketplace.

Hindered by “stove-piped” legacy systems that fail to provide bankers with a unified ability to view and do more to meet their customers’ wants and needs, institutions are due for improvements if they intend to retain their customers. Something’s gotta give when it comes to how banks engage and expand product relationships with their customers in a more unified manner across both digital and assisted channels.

This isn’t to say that banks haven’t evolved over time—they certainly have. The financial industry has gone through two distinct phases of adaptation thus far and has the means to continue on that trajectory. In the beginning, the bank’s bedrock was its branch. Customers could come and go as they pleased, speak with associates regarding financial matters and access their assets. This met customer expectations for high service in a pre-digital era.

Then came the technological revolution—or as I like to call it, “Banking 2.0.” This wave of innovation gave banking a newfound level of accessibility. Online and mobile access provided customers the ability to obtain their financial information at anytime, anywhere. But as more and more banking processes became achievable without customers ever having to set foot in a bank, the fissure between the customer “self-service” experience and assisted channel (in-branch, call center, etc.) interactions and support became readily apparent.

We know customers’ profitability and loyalty are closely correlated with the engagement they have with individual brands, and for today’s consumer, a frictionless yet collaborative experience is key. What this means for banks is they need to draw on their past provisions and couple the customer service expectations from the initial brick-and-mortar banking era with the online accessibility of Banking 2.0 to provide the assisted yet frictionless experience their customers are now demanding.

What exactly is friction?
We’ve all experienced frictional service. We’ve been transferred to “specialists” in response to an off-script question. We’ve waited on hold just to complete simple tasks. We’ve all had over-the-counter interactions take longer than necessary, because the associate had to hop from screen to screen.

Ask yourself: is it easy for your customers to do business with your bank?

How often do customers start a banking process either online or on the phone, only to have to repeat their request or personal information because the channels and departments don’t work collaboratively and share information? Friction makes consumers less enchanted with their banks by making it cumbersome to get a product or complete what the customer views to be a simple task.

For those in the banking world, this is a concern—especially when we note the effect banking friction can have not only on in-the-moment customer interactions but on secondary financial product sales. For today’s bank customers, it often isn’t any easier to procure additional products from their own bank than it is to get the same product from another institution.

It’s clear that banks need to put an end to the friction, but where do they begin?

A few banks have made the first move. The positive feedback we’ve seen regarding the test branch layout at the RBC headquarters and the “café” experiments by Capital One demonstrate that consumers are receptive to—and ultimately expecting—the role of the branch to shift completely. They want their bank to be more dialogue-driven and collaborative, an image that evokes a move closer toward that of an Apple store.

So, let’s take a lesson from Apple. Its products are relatively limited in number and complexity and can very easily be ordered online, yet the success of its stores is unquestioned. The Apple experience in-store is always side-by-side with the customer. Team members work collaboratively with both digital-native millennials and less tech-savvy customers to fit products to their needs or quickly solve their problems.

The process for purchasing Apple products is frictionless, uses information on file tied to your Apple ID, is paperless and—most importantly—leads customers to wanting more Apple products. There isn’t a moment of friction to push consumers away, and Apple goes out of its way to make it easy for customers to have another Apple product, not only by using iCloud to keep all of their devices in sync, but by making sure that each customer has a positive, collaborative and helpful experience when they visit the brick-and-mortar store.

As banks embark on the path to reduce friction, expand relationships and increase revenue, it’s clear they can take a page on customer engagement, cross-selling and retention from Apple’s playbook. Making it easy for customers to work side-by-side with associates is a critical first step, and the important work requires simplified task completion, so the experience feels frictionless.

Joe Salesky is CEO of CRMNEXT, the largest global provider of CRM in financial services.