By Dave DeFazio
Convenience and innovation heighten customer loyalty.
What do reimbursing your friends for dinner, ordering your favorite coffee drink, requesting a ride home and adjusting your A/C have in common?
All of these actions can now be done from a mobile device.
The prevalence of mobile in modern society is undeniable. We’ve grown increasingly reliant on mobile technology to help us manage our day-to-day lives, so the question remains: Why are many financial institutions not leveraging mobile technology to its highest potential?
Many would argue that it comes down to a simple lack of resources. While large banks have the capital to help them develop mobile innovations or buy companies that have already successfully introduced mobile technology into the market, smaller banks often don’t have access to such resources.
Surprisingly, smaller banks don’t always perceive this disparity as a disadvantage. After all, large banks may be ahead of the game when it comes to their mobile offerings, but community banks have the personal touch to better connect to their customers.
At least, that’s what many of them would like to believe.
The truth of the matter is that smaller banks have slowly been overtaken by big banks when it comes to customer satisfaction rates. In fact, according to research conducted by JD Power, 2016 marked the sixth consecutive year that big banks’ satisfaction levels have improved, with Chase Bank now in the lead. For the first time since 2010, satisfaction levels of midsize banks actually dropped.
So what exactly does this mean? Customer satisfaction and the robustness of mobile offerings are becoming synonymous.
Convenience is trumping service, and smaller banks must learn the language of mobile to remain competitive. Not only that, but they must be able to keep innovating so they’re ready to meet their customers with the latest advancements once those customers are ready for them.
Let customers in on the secret.
Many financial institutions have already begun offering mobile solutions. The problem lies in the fact that many of these banks and credit unions haven’t been able to successfully communicate the availability of mobile offerings and their benefits to customers.
Having mobile solutions on hand is the first step. But if customers don’t recognize their value, mobile capabilities will do little to improve satisfaction.
That’s why it’s crucial for banks to let their customers in on the secret. Tell your customers what it is you offer and why they need those capabilities to have better financial—and life—experiences.
First Bank has mastered this art through their advertising. Take this commercial of theirs:
The scene opens on an antiquated small town, where a young boy is gazing longingly at a litter of puppies in the bed of a truck. He picks up his favorite puppy, turns to his dad and asks “Can I have him?” His dad rushes to the ATM only to discover that it’s out of money. By the time he finally has the cash in hand, another girl has left with the puppy. The commercial closes with the message that, if the father had been using First Bank’s mobile person-to-person payments, he would have been able to pay in time to get the puppy for his son.
The bank has done an excellent job of demonstrating why their customers will not only benefit from their mobile offerings, but need them to realize their dream purchases. First Bank has positioned themselves as essential to their customers’ everyday lives.
Pay attention to leading players in mobile payments.
Mobile payments are one of the biggest trends in fintech right now. The number of people using mobile payments has steadily increased since Apple Pay launched in 2013, and the compound annual growth rate is expected to reach 80% by the end of 2020.
Surprisingly, this arena has been dominated not by financial institutions but by companies unrelated to financial services.
Take, for example, Uber, which has solved one of many business travelers’ greatest financial problems: expense reports. Before Uber, travelers had to keep track of printed receipts throughout the entirety of their business trips to submit an expense report. It was a huge hassle with a high margin for error. Now, Uber can automatically forward a digital receipt to their expense apps so they don’t even have to think about it.
While innovations like these are a huge benefit to consumers, they’re putting banks at a disadvantage. Not only are other types of companies addressing consumers’ most pressing financial needs better than banks, but they’re also causing banks to suffer from the “disappearing transaction.”
Since mobile payments automate transactions, they eliminate any physical reminder of the bank. Consumers no longer have to take out their credit or debit card to make a purchase, removing the bank from the point of sale and stripping it of a valuable engagement opportunity.
In order to insert themselves back into transactions and remain relevant to their customers, banks must pay attention to what leaders in the mobile payments space are doing and follow suit to optimize their own mobile offerings.
Go beyond the basics.
Innovations in mobile technology from other sectors can teach banks another valuable lesson: Consumers now expect more than just the basics when it comes to the capabilities their mobile apps provide.
Just as Uber goes beyond helping business travelers find a ride to solve one of their biggest financial problems, banks must push the boundaries of their mobile offerings if they wish to remain competitive. That means finding ways to go beyond payments and basic money management to introduce more value into consumers’ lives.
For example, a recent Accenture survey identified access to discounts as a primary incentive for customers to switch banks. That makes sense, since people are naturally looking to their financial institutions to help them save.
Every bank offers the basics. It’s those added benefits that will help set you apart and convince your customers that they can’t bank anywhere else.
Dave DeFazio is partner at StrategyCorps, a Nashville-based firm that provides financial institutions across the U.S. with mobile and data solutions that protect and grow customer relationships. LinkedIn. Twitter.