Maximizing the ROI of Digital Initiatives

By Todd Robertson

To remain relevant in a rapidly evolving marketplace, it’s imperative for banks to modernize their digital delivery platforms. Even so, it remains an inconvenient truth that many such initiatives underperform ROI targets. This not only makes it more difficult to secure funding for future initiatives, it leaves the bank further from the omnichannel end state they need to reach before competitors beat them to the punch.

There are several straightforward measures banks can take to help ensure their hard work and investment produces the desired effects.

Act on the assumption that loyalty is not enough.

Financial services have long been lauded as “sticky” products, with banks enjoying enviable levels of loyalty and/or low attrition rates. It stands to reason that customers will give their existing institution first shot—or at least a fair shot—when shopping for additional products. Although this remains true, that incumbent advantage has been eroded by the internet on multiple fronts. A McKinsey study indicates that 87 percent of consumers now look beyond their current brand when making purchase decisions.

Moreover, brands included in the initial online search and consideration process are more than twice as likely to be the ones ultimately purchased. Customers’ primary banks would seem to have a leg up on this front, but nothing should be taken for granted. SEO (search engine optimization) techniques can ensure that your bank’s products receive prominent placement. Don’t risk losing a likely sale to “out of sight, out of mind” syndrome—leverage your existing web presence for cross-promotion and suggestive selling.

Help customers finish what they start.

One of the most vexing problems facing e-commerce is cart abandonment. Failure to effectively shepherd customers through the checkout process is a major source of revenue leakage. Online account opening is one of the most in-demand customer features being addressed through digital initiatives, with the number of such applications slated to double over the next five years. However, by some estimates, four-fifths of applications in the finance industry started online are never completed.

Several levers are available to address this issue. First, there is evidence that customer experience erodes when an application processes takes longer than 15 minutes. Keep this in mind when designing the enrollment process, and also support stop-and-start workflows that allow applicants to pick up where they left off, in the channel of their choice. Whether they need to gather more info, or simply run out of time, there’s no reason to send a prospect back to square one.

Follow up with stragglers.

New research from BAI reveals that 30 percent of new accounts are now opened without ever visiting a branch. Most of these are with “direct banks” lacking a brick and mortar presence. According to BAI, 52 percent of financial institutions do not permit a new customer’s first account to be opened entirely online, which helps explain these figures. Consumers do not find the online experience at challenger banks notably easier, however, indicating that an opportunity to capture share still exists.

Two other important strategies to maximize the return on prospects:

  • Offer multiple assistance methods in real-time chat windows, intuitive FAQs and seamless handoffs to the call center can foster completion.
  • Track abandonments closely, following up to determine the factors driving attrition. Studies show that simple email is very effective at re-engaging abandonments. An understanding of the root causes behind abandonment provides valuable data for ongoing product design.

It’s vital to not overlook the role of the branch. Although we see an increase in consumers expressing desire to complete banking processes online, there are still inevitable cases where onsite continuation makes sense. A seamless handoff is essential—one sure-fire recipe for alienating customers is requiring them to retrace steps they’ve already completed online.

It’s important to note that bank customers’ choice of preferred channel is as individual as it is generational. The bankers we speak to have noted that consumers, across all generations, express interest in opening accounts online. However, these consumers cite friction in the process as a barrier to accomplishing this effort more frequently, saying “the process should be easier.” Even so, we are also seeing younger consumers preferring in-person delivery of financial services. If deployed strategically, perhaps that branch network will have staying power after all.

In all, banks are moving in the right direction to remain relevant and competitive in a rapidly evolving marketplace. Even as bankers move their organizations closer to reaching the ideal omni-channel end state, there is much work left to do in order to maximize ROI and better reach customers, both new and prospective.

Todd Robertson is senior vice president at ARGO, a computer software company based in Richardson, Tex. specializing in financial services.