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Ever since the pandemic, consumers are taking a more digital approach to complete the simplest tasks, from buying groceries online to using an app to connect with friends and family face to face. One of the industries most impacted by this was financial services. Now, about a year since the official end to the pandemic, consumers are finding themselves used to the new normal and further embracing digitization.
Now in 2023, banks are seeing customers go so far as to take their business elsewhere if their financial needs and increasing demands aren’t being met. Banks must be customer centric if they want to continue to attract and retain consumers. Being customer centric means remembering that behind each account and transaction is a person with their own wants and needs. Understanding how users interact with your bank, whether in person or online, is an essential first step in offering a top-notch user experience.
There are opportunities to offer the seamless experience consumers crave in just about every stage of the banking experience. Having a digital, user-friendly onboarding process is the best way to attract new customers. From there, it’s key to continue offering simple, personalized digital experiences throughout the rest of the banking relationship.
The Beginning of the Banking Relationship
Digital account opening and onboarding is one of the first interactions between a new customer and their bank. This step sets the scene for how the customer views their relationship with your bank. This is also the first opportunity to lose a customer. In fact, according to a 2022 survey, nine out of ten organizations are experiencing up to 40% abandonment rates at onboarding, and some even more. The survey also revealed that the banking sector has the highest abandonment rates during onboarding, with almost one in four potential customers dropping out.
To encourage customers to complete the onboarding process, banks must make it as seamless, quick and user-friendly as possible while also ensuring there is a human touch to the process.
Throughout the Banking Relationship
Having effectively brought customers onboard, it’s imperative to ensure that the remainder of the banking relationship maintains this high standard of smooth and user-friendly experiences. There are a number of ways to incorporate customer centricity into each banking interaction a customer has.
In today’s financial landscape, innovation is a driving force, with nearly 80% of account holders expressing their willingness to switch financial institutions if offered innovative products such as mobile banking, contactless cards and robust data protection measures. These customers are eager to witness their current bank or credit union embrace these modern advancements. According to recent research, a significant majority of those seeking enhanced payment capabilities from their financial institution, specifically 71%, are looking for entirely digital solutions. As we delve into the realm of transactions, digital wallets emerge as the cornerstone. Recent findings predict that by 2025, digital wallet usage will encompass just over half (52.5%) of the global e-commerce transaction value. Interestingly, while digital wallets enjoy higher popularity among Gen X and Millennials, every generation agrees that the speed of digital wallet transactions is what makes it the most attractive.
Another important component of a successful user experience is offering an omnichannel experience. This means meeting your customer where they are, whether that’s in person at a branch, online using your website or using their phone. Customers should be able to seamlessly start and continue processes through the bank’s website and mobile app. For instance, they can initiate tasks in the app and transition to the branch for in-person assistance if needed. With over 39% of credit union members belonging to Gen Z and millennials, it’s crucial to meet their preference, which, as research indicates, leans towards a combination of digital and physical channels. Additionally, personalization should be a key aspect of every customer’s experience, whether it’s through digital means or face-to-face interaction with a banker.
How Can Banks Achieve This?
Now that we’ve discussed what makes a top-notch user experience, you might be wondering how it’s possible to achieve all of this. Unlike megabanks that have an excess of funds for digital transformation, small-to-midsize banks might struggle to implement the various tools required to offer customers a seamless, simplified and personalized omnichannel experience.
Fortunately, achieving the same speed and efficiency of larger banks is possible with the help of strategic bank technology partners. Partners like these can bring the necessary digital capabilities within reach.
When selecting the best technology partner, it’s crucial that banks consider not only their business goals but also how a vendor’s offerings will support them, taking into account factors such as how quickly they can implement solutions and when you can expect to see a return on your investment. The right vendor should serve as a true partner that takes your bank’s customer experience to the next level.
Customer expectations will never stop changing and digital banking is here to stay. Banks must keep up to continue to attract and retain customers. With a good tech partner, they can achieve a user experience that builds long-term customer loyalty.