How often do you visit a bank branch? Or speak to someone from your bank on the phone? Chances are, not very often. Banking is migrating to digital channels, which raises the question of what’s going to happen to the personal relationship between banks and their customers. In an increasingly digitised world, how do we keep the ‘personal’ in personal banking?
Arguably, banks have some catching up to do. At the heart of it all, banks need to think experiences, not channels. They need to become fundamentally useful and relevant to customers again, and bring everything together in a way that works for people.
Banking is, and has always been, a service, and speed and convenience are of the essence. To customers, it’s all banking, whether they are in the branch, on the Internet or on mobile – whether they need a loan, or to pay somebody, or to take out a credit card. So finding that different parts of the bank don’t talk to each other, or that different channels don’t offer the same functionality, or that basic tasks such as opening an account takes too long, can be frustrating.
Disjointed service is not just impersonal; it’s also at odds with the great retail experiences customers now enjoy outside the banking industry. To emulate these, banks must first of all think of banking like customers do. This means integrating IT systems and tearing down product and channel silos, so customers get seamless and consistently great service at each touch point through a holistic ecosystem. At the most basic level, customers should be able to navigate the bank’s website as easily on their mobiles or tablets, as they do on their desktops.
Digital now trumps physical channels in many countries around the world, according to Bain & Company, with online exceeding the sum of branch and ATM interactions in the US. And, not surprisingly, the preference for digital is greatest among Generation Y, the banking customers of the future. By 2017, some one billion people will be using mobile banking, up from 590 million today, according to Juniper Research.
Generally, when adapting their strategies, banks have been focusing on making products, transactions and channels work for the digital environment. What’s missing is the ‘human’ part – the part that has to do with the needs, sentiments and preferences of individual customers.
Person-to-person contact may become a rarity, but customers don’t want to be treated as ‘one of the crowd’. In fact, with digitisation, they expect more personalisation than before. Banks must invest more time in understanding the total relationship the customer has with them, and how behaviours are changing. In which contexts might a customer look at taking out a loan, or pay somebody or apply for a new credit card? How can the bank make its services available in a way that is more convenient, more timely, and most importantly, more relevant for the customer?
Digitisation offers great opportunities to personalise service for hundreds of thousands of customers, cost-efficiently, but banks are only just beginning to explore these – integrating online banking with call centres, for example, or using video conferencing and social media to let customers connect with relationship managers.
Another area where banks could undoubtedly do better is on the use of data to serve customers in more helpful and proactive ways. This is both about making banking available in the context where people need it, and about using analytics to make pre-emptive offers to customers. Quite rightly, people expect the banks they have trusted with their money to know them and to shape their services accordingly. For example, banks can use database tools to keep an eye out for ‘events’ that indicate a change in the customer’s needs or sentiment towards the bank – such as a significant account movement, change of address, addition of a new family member or the loss of a credit card.
Many banks are now looking at including customers in innovation and testing, to engage them more around the bank’s brand and create a dialogue about what ‘excellence’ in banking should stand for. Using social media to talk to customers about products, facilitate social sharing and to deal with problems openly is a crucial part of this. Customer advocacy has come to the fore, as customers increasingly turn to their peers or other independent sources for financial information and advice. At Standard Chartered, for example, our standard for our banking websites now includes integration with social media to allow customers to share offers and stories about the bank.
Personal relationships don’t happen automatically, and as interaction goes virtual it becomes easy to focus and get lost in technology. But technology is just an enabler. The core of banking is, and always will be, the customer. Get it wrong and the rush to digitise banking could see customers getting lost and turning to other providers who offer the personal touch. But get it right, and digitisation offers a way back to the basics of what banking should be all about – meeting people’s needs, whether it’s to buy their own home, go on holiday, do the shopping or save up for the future.
Bertamini is Group executive director and CEO, Consumer Banking, Standard Chartered Bank.
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