The evolving financial services market is posing two major challenges to banks and credit unions: find ways to enhance their role in people's lives and protect against industry disruptors that threaten to step between financial institutions and consumers.
The response to both challenges starts with a focus on digital transformation and understanding that meeting consumer expectations isn't just a check-the-box task. It's a holistic, ongoing business philosophy. Digital transformation never ends, and consumers' expectations change with every new experience.
Thriving in what has become an intensely competitive market means constantly scanning the digital horizon to see what's next and always anticipating new consumer expectations. Here are three strategies to achieving that goal.
Digital transformation never ends, and consumers' expectations change with every new experience.
1. Focus on Intuitive Experiences
In a world of "you bought this, so you might like this," providing only basic, transactional services falls short. Customers and members want to feel like their financial institutions understand them. They want personalized, seamless, know-me experiences.
Financial institutions have the most important tool to provide those experiences: data. Turning that data into actionable information provides an opportunity to understand consumer behaviors and preferences and then personalize the experience.
It's not just the in-the-moment engagement. Truly intuitive experiences are those that show financial institutions understand consumers to the point that while responding to immediate requests, banks and credit unions are anticipating what people might need next.
That could mean knowing when someone might need a personal loan. It could be helping consumers remember to pay their bills or providing prompts to add more money to an investment account.
Financial institutions know so much about consumers that it's not a big leap to leveraging technology to provide as equally an engaging experience as Chime or Amazon.
2. Achieve Excellence in Every Channel
Consumer preferences for how they interact with their financial institutions run the gamut, from mobile to in person.
In fact, recent research from Raddon, a Fiserv company, confirms the nearly even division of preferences among consumers and underscores the importance of delivering stellar experiences in every channel. According to the 2020 Branch Transformation: Building for the Next Generation Raddon Research Insights report, 29 percent of consumers prefer digital interactions, 34 percent prefer face to face and 37 percent want both.
Meeting all expectations requires cohesion across the service platform, so if a consumer wants digital and branch, it's not a completely different experience from one to the other. If a financial institution has phenomenal staff for in-person engagement but the online or app banking experience lags, it's a missed opportunity and, potentially, a risk of losing accounts.
It's not just about technology rising to the level of the in-person experience. It's every channel working as one. For instance, tellers can have robust, 360-degree access to a consumer's recent transactions and needs. From a business and corporate perspective, financial institutions can blend in third-party data to make recommendations on expansion and commercial lending opportunities.
Whether on their own or with a trusted services provider, financial institutions are positioned to expand their presence in consumers' lives.
3. Embed Services in Consumers' Lives
Whether on their own or with a trusted services provider, financial institutions are positioned to expand their presence in consumers' lives. It can happen in subtle, seamless, everyday ways that make life simple for consumers and commercial clients.
For instance, consider a woman who wants to buy a backyard fireplace. She calls a store owner, who offers suggestions and financing options. The woman, through her phone app, applies and is immediately approved for a new loyalty credit card from the store owner's bank. She then receives a push notification through her bank's mobile app and sets up a payment plan for the fireplace.
At the store owner's bank, the manager receives a notification that the store's fireplace sales are going so well that it's a good time to meet about possible growth options, such as commercial loans to open a second location. The bank takes the step of contacting the store owner to discuss those possibilities.
It's easy to settle for passive transactional engagements. But strengthening relationships by making a difference in consumers' lives means tightly integrating additional services that might otherwise be overlooked. That mindset allows financial institutions to leverage the entire services ecosystem.
Competing With Confidence
Financial institutions are facing stiffer competition and increased pressure to meet consumer expectations. But there are ways to overcome those challenges.