It starts when your customer gets instantly repaid for that concert ticket. It doesn’t matter if it’s via PayPal, Venmo, or one of the many payment apps out there. The point is, your customer got paid in a couple of clicks and they liked it.
Now, that same customer logs onto your digital banking site to deposit a check. Your app isn’t working with the new Android update. They update your app and try again. Your fingerprint reader isn’t working so they key in their password. Once they’re logged in, they go through a clunky process to log and photograph the check. Once submitted, an error message tells them the check amount is too high to be handled through your app. They drive to your branch. The teller has to call a manager because you endorsed the check, according to your instructions, with “for mobile deposit only”.
Is it any wonder that tech competitors have jumped into the traditional banking space and vacuumed up deposits – along with the crucial data that reveals their buying habits (and can lead to more sales)? With so many choices available for digital transactions, it’s more important than ever to innovate and remain relevant to customers.
Consumer loyalty isn’t dead, but banks and credit unions need to fight harder than ever to retain their customers. New players are courting them at every turn and include fintechs that accept direct deposits and online-only banks – linked to traditional accounts – that are able to pay higher interest rates and make it quick and convenient to move money to them. Traditional accounts are becoming more of a parking space for money where consumers temporarily stash their funds until moving them elsewhere.
It’s becoming easier than ever for outsiders to woo your customers away by paying slightly more (maybe only a few basis points) in interest while also giving them a streamlined, intuitive experience that makes their life more efficient. That’s why traditional credit unions and banks need to seize upon the quickly disappearing competitive advantage that they currently hold: established, “real” relationships with customers and their communities.
According to the Harris Poll, most consumers (58%) say they’d prefer to use smaller regional banking providers. Older generations tend to prefer working with their trusted community bank or credit union instead of bot-led interfaces; but, that alone isn’t enough. Customers’ established relationships are the secret weapon of traditional banking, but that doesn’t mean a superior digital experience isn’t required.
In order to grow market share, banks and credit unions must leverage their most distinguishing asset – their people. They can accomplish this through a superior digital banking experience that easily meshes with live, personalized service. This matters because financial institutions are no longer competing solely against one another, but against the world’s largest banks and tech companies – as well as agile new fintechs that are not hindered by legacy systems.
Essentially, if customers’ comments were condensed and delivered to their banks and credit unions, they would sound something like this: “Thank you for your basic digital offering, but I want more. Let me communicate with my favorite banker without calling the branch. Let me transact with you from my digital device whenever I want, day or night. Give me personalized attention and service when I need it, but don’t bother me when I just want self-serve digital options. In a nutshell, give me what YOU would want and I will be your customer for life. “
Does your digital banking offer a streamlined, intuitive option for your customers to communicate with you? Are you giving them too much “bot” through digital and too much “high touch” at the branches?
The door is quickly closing for financial institutions to leverage digital to amplify their personalized service. Retain customers by giving them what they can’t get anywhere else – a superior digital banking experience with their preferred, trusted institution. Give them immediate access to the “real life” banking experts of their choice while allowing them enough autonomy and convenience to streamline their lives – no different than the fintechs.
Regional and mid-sized organizations can benefit from the unharnessed power of personalized in-house service, and they can do this via digital. The right blending of both worlds gives regional and smaller banks and credit unions the secret sauce they need to remain relevant in today’s quickly shifting landscape.
We talk a lot about achieving this blend (and celebrate those doing it well) on our website in Expertise & Research.