Banks and financial institutions are finding it hard to compete with newer fintech companies for customer attention. Customers want nothing more than a smooth, seamless experience. But this is what banks struggle to provide. Banks have invested in technology and processes that make customer acquisition easier, but they’ve found it difficult to invest in the areas that keep customers coming back. Customers want different features like better mobile apps and smarter ATMs, but these investments require long-term thinking and investment. So how can banks improve their customer experience?
The Customer Experience In The Banking Industry
More than a decade ago, customers used to open a bank account in a few days, and the process could take around 2 days. Today, consumers want to open accounts and complete other transactions within hours. As banks have become more tech-savvy, they’ve struggled to keep up with consumers’ demands and preferences. Customer churn in banks is very high, with over 60% of consumers being in the wrong bank for 3 months or more.
Customer Experience In The Fintech Industry
Since information is the most valuable asset for banks, data scientists are vital to the success of banks. Unstructured data is information that is left behind in unstructured, non-structured, or unorganized files and data. This includes data from sales, marketing, finance, operations, and HR. The fintech industry has seen its fair share of success by tapping into the value of unstructured data, something that banks have traditionally been unable to do due to its immutability. But these companies are making the shift to a cloud-based model where data can be stored in a more flexible and standardized manner.
Why Is It Important To Invest In Customer Experience?
The way banks compete is changing. Fintech companies like PayPal are investing in digitization and building strong customer relationships. Mobile apps and mobile wallets, as well as interactive and personalized applications are making banking easier, faster, and safer. Banks must develop these capabilities if they want to compete with these innovative companies.
One of the most critical elements in building a better customer experience is a product that’s integrated into the customer’s life in a seamless way. You don’t need to make a separate purchase just to initiate a transaction. This means an integrated solution – such as managing credit cards, personal finances, identity verification, etc. – that integrates seamlessly with the customer’s other devices and applications.
How Banks Can Improve Their Customer Experience
There’s no reason why banks can’t implement innovative technology and make significant improvements to the customer experience. Digitalization has disrupted how the industry operates. Banks need to innovate to remain competitive, and offering customers innovative products and services will always be a strong strategy.
Traditionally, banks focused on providing customer-facing staff, loans, and credit cards. Since then, banks have faced a host of challenges including branch closures, increased operational costs, and more competition from fintech companies. To survive, banks need to streamline their processes, improve efficiency, and create products that customers will want to use.
Improve Their Mobile App
Downloading a banking app is a simple process, but for some customers, it’s a time-consuming process. From creating a login for their account to logging into their accounts, it’s easy to get in the way of what they’re actually trying to do. When consumers don’t need to use a banking app, they tend to hold it until there is a “crash” or another technical difficulty. However, if banks don’t offer a powerful mobile app, customers will not try them out. The best apps will make it easy to carry out everyday banking tasks, like online shopping and money transfers. In fact, more than 40% of American consumers have switched banks due to a poor mobile app experience.
A simple and intuitive mobile app is a surefire way to build loyalty.
Improve Their ATM
In today’s age, most customers don’t use ATM machines to deposit or withdraw cash. Instead, they’re using smart mobile apps that allow them to pay bills, get loans, or make payments. Banks could take a leaf out of this book. What if ATMs were able to perform more sophisticated transactions that weren’t possible before? This would be especially useful in countries with low-bit-rates. Smart ATMs could perform transactions at higher speeds and in real time, increasing their appeal. Similarly, banks should also be developing chatbots that can handle basic customer service queries and improve the customer experience.
ATMs are still essential for many customers, but they are also increasingly becoming old-fashioned.
Make It Easier To Do Transactions Online
Many people still visit brick and mortar banks to make transactions, though online transactions have been the primary mode for over 10 years. Why? Because customers want the ability to do transactions from anywhere, at any time. Bank branches are physically located near customers, which creates the possibility of potential conflicts or confusion, if something happens and the staff is unable to help. Online banking is much easier and more convenient, allowing customers to make transactions in the bank’s branch from anywhere in the world.
Offer Better Rewards And Incentives
Rewards and incentives can easily be the difference between a customer’s decision to stay or not. If banks have no offers to offer, it’s very hard to convince a customer to return. Offer them rewards on their deposits, for example. For every dollar deposited in their accounts, banks should offer them a certain percentage of the transaction value in some form of discount or gift card. For instance, if a customer’s account is zeroed out, give them a 25% discount on the check they’ll write in future. By offering rewards and incentives, banks can boost their customer acquisition and retention rates.
Improving customer experience is no easy feat, but the more banks take advantage of emerging technologies and harness the power of data, the better equipped they are to build an engaging customer experience that will improve the bottom line.