People are now more open to integrating digitization into their day-to-day activities. COVID has accelerated digital acceptance, but the digital transformation has been developing over time. This has led to changes in consumer behaviour and even their preferences. As a result, traditional banking service practices are gradually fading away.
The next phase of competition among banking and financial service providers is developing around digital transition. Banks are under increased pressure to deliver a "digital first" experience. This may gradually convert banks into pure technology businesses. Notably, banks have a sizeable customer base and distribution network that they can leverage in the race towards a fully experience-driven enterprise.
With the improvements in technology, customers are now used to enjoying stellar customer service across all industries. If the customers of one bank are enjoying his or her customer experience, it has an infectious effect on the customers of other banks. This brings us back to the aforementioned pressure on banks to go digital-first.
The Zendesk Customer Experience Trends Report of 2023 reiterates this sea-change in customer expectations. 72% of the respondents of this survey stressed that they want immediate service. 70% of them want the full resolution of their queries in their interactions. 62% of respondents expect a seamless flow of experience between physical and digital spaces. The same percentage of respondents said that they value personalized recommendations higher than general ones. Like any other industry, banking sector majors are trying hard to provide a personalized and seamless experience to their customers. Leading this experience-driven evolution in banking are a variety of emerging patterns. Some of these patterns are –
More and more banking customers are using online banking and mobile banking apps. These customers expect prompt customer service that is available 365X24X7. Apart from customer care centres, this would include desktop and in-app live chats, social media interactions, email and FAQ support. This calls for regular and high investment in technological infrastructure by banks. By doing so, the banks will be improving the customer experience and evolving themselves as well.
Traditionally, banking products and services had very little personalised touch. Banking customers have mostly availed of standardised service over the years. However, fintech companies and tech startups have revolutionised the banking and financial product lines. As more and more digitisation happens, banks have access to more meaningful customer data. This allows them to make better inferences and incisive data analytics. This forms the bedrock of the designing of a more personalised banking service.
Today, banking customers place personalisation as a very important part of financial services. Banks, on their part, recognise intensive personalisation as an essential tool for better customer retention. Besides, personalisation can reduce customer acquisition costs and effort as well.
Apart from ever-present customer service, customers expect their banks to have an omnichannel presence. The omnichannel presence must have a consistent service quality and customer experience across all channels. A customer today visits a bank branch, enquires about a product, applies for it through Internet banking, and monitors it through mobile banking. Any inconsistency among any of these channels will attract criticism from the customers. Banks are, therefore, investing heavily in building an omnichannel presence.
Although in its initial stage, open API can revolutionise the banking business. It will allow banks to exchange data with fintech and other service providers. Transactions made in digital platforms become faster, more secure and more efficient with open API. Banks will get new opportunities to cross-sell products and streamline transactions where more than one business is involved. Through seamless data sharing between banks, clients and service providers, open API will lead to a more effective integration which will ultimately foster experience-driven banking.
You will notice that some of the bank mobile apps are still in the form of a basic information tool. However, the leading banks are making their mobile banking apps more dynamic and giving them the shape of a digital assistant for the customer. Smarter digital assistants are getting ingrained into mobile banking apps and making them more sophisticated. Mobile apps can draw inferences from the financial history of the customer and identify behavioural patterns. The future may see more proactive banking apps that will remind customers about potential actions that need to be taken.
These are only a few aspects of the multi-pronged evolution that is sweeping the banking industry and making it a more experience-driven enterprise.
In the future, customer experience will be a key differentiator among financial services providers. It will influence their brand value and client retention rate. Banks will, therefore, undertake digital transformation while keeping customer experience a priority. Their digitised solutions must address all customer needs and add to the overall customer experience. Customers already have their expectations set in terms of personalised service, feedback addressal and ease of conducting banking chores. The coming days will see banks preoccupied with ensuring that a holistic infrastructure is built to achieve and deliver optimal customer experience to their customers. One can expect that factors like simplicity and safety will also be kept in mind during this digital transformation.
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