4 Ways Technology is Transforming Digital Banking Experiences
In an industry where switching bank accounts is becoming faster and easier, comparison websites are increasingly abundant and we are more connected than ever through social media, consumers have never had so much power. As a result of this, as consumers we are extremely fickle. We are getting used to playing the field. For a bank to win our complete loyalty requires:
- A highly personalised customer experience
- Complete trust and loyalty
- Slick and easy to use software
- An engaging user journey from start to finish
To add fuel to the fire – the market is becoming progressively competitive with the traditional banks no longer having to only compete amongst themselves but also with fin-tech disruptors like Monzo and Starling who are now entering the market and changing the game.
Furthermore with the enforcement of Open Banking in January 2018 banks have been forced to share more customer information than ever before via technologies such as APIs. This has lead to consumers having even more power through the ability to compare products and services offered by banks on a completely tailored level. It is also enabling companies to meet the market’s growing desire to have one single platform that provides an overall view of all their accounts in one simple application. These innovative banks and 3rd parties such as Amazon, Apple & Tesco who are developing this kind of technology are putting immense pressure on traditional banks to differentiate and retain their share of the market.
Unless they can ‘jump on the bandwagon’ and innovate to meet their customers’ needs to this extent, the traditional high-street banks risk falling further and further behind. What is clear is that a customer centric strategy is key to success and it is becoming increasingly apparent that technology is the best way to achieve this.
1 – Personalising the Customer Experience
Digital first organisations are much better positioned to provide the kind of highly personalised and customised solutions that consumers increasingly expect. As technology advances, more data can be processed and companies learn more about their customers.
Accenture 2017: How Can Banks Meet Customer Demands, Nomads.
Personalisation can include improving the relevance of information that financial services organisations send to their customers and it can also refer to when and how customers receive information. 54% of a group of customers labelled as ‘Nomads’ by Accenture (a digitally active group) want specific real-time offers based on their location and credit card activity. Advanced technologies are now enabling banks to handle increasing volumes of data. Through a more effective use of technologies, banks have more data analytics than ever at their disposal to help them target the right customers with the right information at the right time. AI and Machine Learning are playing a major part in achieving this for the financial services sector.
Capital One is a working example of this. Using Machine Learning they are using customer data to provide highly personalised experiences. Their ‘Second Look’ program was launched as a service that is offered to monitor customers’ spending habits. It provides detailed insights into customers’ spending patterns and communicates this with customers via push notifications. This kind of personalised communication is revolutionising the customer experience.
Machine Learning and AI allow companies to target relevant offers to customers at the optimum times. This is crucial as the only thing worse than being bombarded with emails and offers is if none of them actually apply to you! By using data-driven marketing techniques to tailor offers to people at specific stages of their financial lives, banks are much more likely to increase conversion rates and boost sales of their products and services. In a consumer group labeled as “Quality Seekers” by Accenture it was found that 42% of them want banks to send them information about services exactly as their need arises. This kind of precision doesn’t happen without advanced technologies such as AI and Machine Learning.
Accenture 2017: How Can Banks Meet Customer Demands, Quality Seekers.
Machine learning can also identify unusual behaviour on customers’ bank accounts. Banks can send a tailored message to the specific customer informing them of these instances. Personalising the experience for customers and using their data for the purpose of protecting their money and keeping their account safe drives trust and loyalty. There are other ways in which personalising the experience for consumers in the digital banking sector can heighten security measures. Read on to find out.
2 – Digital Banking Security
The digital banking industry and financial services as a wider sector are both heavily regulated. Banks are up against some sector-unique challenges regarding regulatory laws and guidelines due to the highly confidential nature of the data that they are handling. It is therefore crucial for banks to integrate the latest security and authentication technology within their provided platforms. Methods such as 2-step authentication have been used for a while within the sector. What we see more and more now is biometric security methods, first with fingerprint authentication but now also with facial and iris recognition technologies. Biometrics provide a convenient compromise between providing the best security to protect consumers’ financial data and providing a simple, straightforward customer experience.
There are issues around older logins and authentication processes causing problems for customers. Passwords can be easily forgotten. Users have to remember which passwords they created for which platforms and which devices. Creating an easily memorable one or writing it down defeats the purpose! Password authentications also require flawless typing each time they’re entered – often adding a few seconds to the time it takes to log in and achieve the initial goal.
Research conducted by EyeVerify found that 86% of respondents find logging into mobile banking apps easier with biometrics rather than the traditional method of entering a password. Lots of banks are now also using voice recognition in order to send payments quickly to people already in their payee list. Furthermore, of the 44% of banking respondents labelled by Accenture as “Quality Seekers” 53% say confidence that their personal data will be secure makes them remain loyal to their banks. There are arguments around the extent of this technology however what is clear is that these biometrics have the potential to greatly enhance the experience for users by making digital banking platforms like mobile banking apps easier, faster and generally more convenient for customers to use.
3 – The Convenience of Digital Banking
Slick and reliable technology with easy to use applications that are intuitive and responsive is one of the major influencers for banking customers. We only have to look at the fall out from earlier this year when TSB experienced a complete meltdown of their technology – this has lead to an eight-fold increase in the number of their customers switching accounts.
The main way that technology can help to improve the convenience for consumers and in turn improve the customer experience is through mobile technology. In PwC’s 2018 Digital Banking Consumer Survey, research was conducted to understand how firms can best serve the needs of today’s consumers and the main conclusion was that banks need to think ‘mobile first’ to win the market. Mobile banking apps are designed to be fast, secure and easy to use. They are quickly becoming the UK’s number one way to bank.
There’s a reason why the likes of Starling Bank, Atom and Monzo, all digital banking accounts designed for mobile apps, have been so successful. With mobile banking apps, you can easily complete all your banking transactions anywhere, anytime. According to CACI, 72% of the UK adult population will bank via a mobile app by 2023 and as soon as next year banking via a mobile app will overtake online activity.
It is not enough to simply provide customers with a mobile app that is supported with a solid infrastructure of technology. It is crucial that the application is user friendly, intuitive and above all, easy to use! Consumers are not using their digital banking applications to challenge themselves, there are countless quiz apps and brain training games to serve that purpose! What people want from their mobile banking app is something that is easy to use and allows them to complete their desired transactions in seconds rather than minutes. This is where a well designed User Experience (UX) comes into play.
The best UX comes as a result of conducting significant customer research. In their 2018 Digital Trends in Financial Services report, Adobe recommend that companies use customer journey mapping, which will help marketers identify opportunities to optimise interactions and iron out customer experience issues that could be alienating people and costing the business money.
Enhancing the user experience to make mobile banking technology as convenient to use as possible for customers is playing a vital part in financial services. Over a third of respondents in Adobe’s research say that customer experience – in particular making the experience on their various platforms easy/fun/valuable – will be the number one way they seek to differentiate themselves over the next five years. Having said that, PwC found in their digital banking consumer survey that while easy-to-use technology is important, it is “not the only thing that matters” – alluding to other factors such as engagement and security which are also recurring themes.
4 – Engagement
Increasing consumer engagement levels with brands in the Financial Services industry is often seen as a challenge. After all, there’s only so much fun and engagement people can expect while setting up a direct debit for their new gym membership, or transferring money to their friends right?! But this is where so many traditional banks and financial services organisations are mistaken, and are consequently falling behind and failing to deliver the expected customer experience. In PwC’s 2018 consumer survey on digital banking they found that one of the big themes was that many users are becoming less engaged.
Monzo is an example of a bank that is using technology to differentiate as an engaging brand in the financial services industry. They have created a product that is responding to what consumers need and want in today’s market. Providing customers with overviews on what they are spending their money on, allowing users to set spending goals and budgets as well as using personalised push notifications to communicate are just some of the ways that Monzo is providing a new level of engagement through their banking app. They also have the advantage of being a new player with no outdated legacy systems that are holding back their innovation and ability to meet the digital market’s demands. This customer centric strategy has resulted in recent ratings showing that Monzo has scored over 90% satisfaction.
SwarmOnline’s sister company CU Soar is another fin-tech start-up that is disrupting the model and changing the game by enabling ethical finance in the Credit Union sector and beyond. They do this by giving credit unions the tools to drive engagement with their members and lighten the load with operational efficiencies. The mobile app has been designed to maximise membership engagement whilst remaining simple and easy to use.
- Members can engage directly with their money without having to visit a branch
- Managing loan repayments is easier than ever with 24/7 access to view account balances and personalised reminder notifications.
- Credit unions can create custom forms and surveys and communicate with members via targeted push notifications
- Drive community engagement with news and events updates directly through the app
Before CU Soar, the credit union market was severely underserved by companies providing software to drive digital engagement. Read more here.
Main takeaways:
- The game is changing in the Financial Services industry
- Consumers are fickle and can be encouraged to switch banks easily
- Technology is the number one way for banks to innovate and transform the customer experience
- Increasingly, the market is looking for ‘mobile first’ and digital-only solutions
- To build loyalty and succeed in today’s market consumers require:
- A highly personalised experience
- Complete trust and assurance that their data is secure
- Reliable & easy to use platforms
- A brand providing a highly engaging experience
All of these points are made more achievable through integrating slick technology and bespoke software built with customers’ needs at the forefront of the strategy.
How Swarm can help…
- Mobile banking applications
- Our experts in UX create engaging start to finish experiences for your customers
- Consultancy on upgrading legacy software
- Got an idea to improve the way you’re engaging with your customers? Embark upon a tailored Discovery Bootcamp with our team of Engineers and UX/UI experts to bring your idea to life.
