As digital innovation evolves , so does the way in how consumers interact with the financial institutions around them. To keep up with these rapid industry changes that are impacting consumer behaviors and their financial institution preferences, BookingBug has recently completed our 2nd year of consumer research. The report, Modern Banking Research, covers 2,000 respondents in the US and UK to provide a global view into the revolutionary changes occurring in retail banking.
The Democratization of Banking
In comparison to the previous years research, one overarching concept stood out to us; a concept we’re calling The Democratization of Banking. We define this as the freedom for consumers to decide how they will do their banking. It’s 2018 and banking has evolved into a more interactive omnichannel experience. Choosing a bank is no longer limited to the options in your local town square, nor are banking activities limited by the stereotypical “banker’s hours.” The reality is that customers can try out any number of credit unions or virtual banks without boundary. Consumers can even download apps that instantly analyze their investment portfolios, enable check deposits with a signature and photo of the check and make instant cashless commerce transactions. Customers are now increasingly likely to select an organization that provides interactive digital banking services in a way customers want to use them.
Recommendation #1: Service Consistency
The research shows that consumers expect (but are not receiving) a consistently high level of service regardless if they’re accessing the bank via brick and mortar, online or phone. In fact, in the US, 21% of respondents now only shop for these products online, a 6% increase from 2017.
Recommendation #2: In-branch Experience
Data shows that although branch traffic has significantly decreased due to online options, branches are an increasingly valuable asset for upsell opportunities and still serve as a place to establish customer trust. In the US, 68% of people would visit branches more often if they were afforded more access to trained staff with better attitudes and a higher knowledge base.
Recommendation #3: Events
One of the largest opportunities identified for the financial industry, specifically banks, was hosting events to connect with customers and build a community around a branch. Across the US and UK, only 11% of respondents had ever been invited to a bank’s event, yet 63% would consider attending if invited.
Recommendation #4: Education
Established banks are losing market share to FinTech competitors which are offering robust and innovative banking services. Because there is such an abundant amount of companies and services available to consumers to choose from, this presents an opportunity for established banks to better educate their customers on their best course for financial planning. Providing foundational and advanced, classes, and advising through all channels can further establish trust between institutions and their customers, which is a key element to maintaining a lengthy and mutually beneficial relationship.
Whether you’ve already been investing heavily in tech and customer experience or are just ramping up, there is demonstrable value in focusing on how your customers experience banking, across all channels, and ensuring that you are playing up to their respective strengths. Online, that may mean improving feature functionality and the user interface so customers can easily access whatever they need, whenever they need it. In branch, it may mean spending additional time training staff and reducing their administrative tasks so they can spend more time engaging with and creating a personalized experience for customers.
To learn more about how banks can adapt to the latest industry trends, view our 2018 Modern Banking Research.