The last thing banks need when they pursue a digital transformation is a digital strategy.
Not many banks get this right. Organizations need one enterprise strategy for how to be the best in their business. If you set up different internal strategies, all you really have are a bunch of disparate go-to-market ideas.
Spending time crafting a savvy digital strategy signals that you have a separate approach from the rest of your banking channels. That very narrow digital strategy puts you on a road to failure, because it forces competition and conflicts as teams vie for differentiated levels of support and resources to strengthen their now-competing channels. Instead of standing on its own, digital should shape and help drive your single banking strategy as yet another tool in your arsenal.
You might think your current approach is setting you up for an omnichannel delivery, but you’ll end up with disjointed services that create friction for customers if digital is treated distinctly. Even if you want customers to handle the overwhelming percentage of their banking online, many will continue to walk into branches, particularly for complex transactions like mortgage applications, and end up calling you with questions.
Granted, 2020 and safer-at-home guidance as the coronavirus arrived have pushed digital adoption forward more by necessity than desire. In July, nearly five months after the pandemic started, 91% of consumers conducted banking online, mostly to deposit checks or review their account balances. Even more striking: 40% of consumers reported using their bank’s mobile app more often.
Some of the elasticity in consumer preference may be tightening. Still, a successful transformation is about integrating digital with your enterprise strategy to be more available and flexible as consumers speed up their digital adoption. With the onset of the pandemic, people are now using online banking daily. Not everyone is going back to your branches. You can’t afford to not meet them on a journey they’re already taking.
Your customers don’t care that your digital, branch, and telephone channels are each managed by different teams – frankly, they don’t want to know. They want to trust that you can meet them wherever they are so they don’t have to ask the same question multiple times as they cross over different channels. They want all the information they need in every single channel.
Apple gets it. Consider this fall’s push of its HomePod series, its version of the digital personal assistant. When you walk into your home with your iPhone, those devices automatically pair up and connect, even going into stereo mode. They know every household voice: yours, your spouse’s, your children’s.
In the simplest terms, Apple is not doing anything other than what customers expect. But no one had delivered those experiences to them yet. This game-changing approach will eventually spill into your daily business as banks.
I liken this to the legendary sitcom Cheers, filmed almost completely within an eponymous Boston bar. The entire show is summed up in the earworm-of-a-catchphrase title of its theme song: “Where Everybody Knows Your Name.”
Your customers want you to know their names – to a degree. Customers aren’t ready to give up a level of security to be fully identified, but they want to be recognized. They don’t want to explain who they are and what they want every time they interact with your bank.
Digital allows you to walk that fine line with insights to follow their electronic footprints to specific products that match their current financial needs. You don’t want to greet customers by saying you know they need a mortgage because they’ve put an offer on that house at 123 Main Street. But you can definitely say, “We understand you’re looking to move, and we’d be delighted to help you with a mortgage.”
How you position it is what’s important. Having that information across each channel with related context enables you to have meaningful conversations with customers and to serve them expeditiously.
This is so important that I need to repeat it: Digital is a tool, not a product.
I already know some folks are saying, “But, yes, it is, because we produced a mobile app.” That’s not the same. You created that app for its own purpose, and it needs to be connected to something else – your banking systems – and it has to deliver a real solution. At the same time, be mindful of not distracting customers with a bunch of noisy features they’re never going to use.
Granted, you need digital visionaries who can envision powerful, engaging capabilities and stay one step ahead of your customers, but they need to lead with the banking’s strategy front and center. If they aren’t focused on what customers truly want and need, it doesn’t matter how talented they are. Your team should be constantly going another step up the ladder in the capabilities and services that you offer, positioning them in a near-linear fashion along the journey so customers get what they want when they’re ready for it. For example, do you have a customer living paycheck to paycheck? If so, you want to serve up budgeting tools, alert them to pay a bill due in three days, or suggest short-term liquidity products.
Your digital capabilities are tools that still require a product manager to monitor and track performance. You want that experience to grow and evolve with your customer base and their needs. That is your digital transformation as you migrate more customers and transactions into your digital channel. Your products and their features should remain unchanged, no matter how consumers access them.
Think through what customers need rather than getting distracted by the art of the possible. Don’t waste resources or take side roads dreaming up capabilities that consumers simply aren’t ready to consume.
Digital transformation is about changing who you are as a bank and bringing that to your customers. Your starting point is always your enterprise strategy, because that establishes your value propositions on how you serve customers and your role in your community. That is your anchor.
Every associate at your bank has a role in achieving the future vision you define in that strategy. This isn’t the digital team’s job. You want to be clear about how digital connects to your bank strategy and communicate expectations so your people understand where they fit in – yet another reason you don’t have a stand-alone digital strategy that excludes other employees.
As you talk about migrating transactions from traditional channels, many of your frontline employees might be hesitant. For some time, your phone agents have been trained to help push callers to self-service channels. This is territory that branch associates might not be ready to cede without greater insights into the bigger picture. They also need to be prepared to listen for different conversation clues, as well as know how to easily and efficiently educate their branch customers on how to use digital tools, including your mobile app.
And this is also a critical moment for getting your own employees on board as customers. They need to be familiar with digital practices and technologies to support that transition. Find those hero stories where your frontline people are driving the change. Celebrate those moments and showcase your progress.
Even as you inch forward, you remain on a treadmill, continuing to advance to a stronger performance that outpaces the competition – but no one ever crosses the finish line.
As you develop your enterprise strategy, establish clear metrics up front so you can monitor your success and maturity. Examples include: better efficiency metrics, customers adopting digital behaviors, and escalation of the right transactions in your digital channel.
Look at this in three dimensions: Are you getting more efficient as customers migrate to higher digital usage? Are you freeing up money to invest in other initiatives? And are you maintaining the customer experience that defines your bank? Because if you lose that in the long run, you’re going to lose your customers.
Our team works on the front lines to help banks develop and implement digital solutions that both meet their customers where they are heading, and deliver on the organization’s overarching strategy. My latest playbook, "How to Successfully Reclaim and Navigate Digital Transformation," discusses how banks can no longer wait to pursue meaningful digital transformations because their customers are living now, more than ever, in the digital age. Download your copy now – and reach out to get your bank onboard for a successful digital transformation, which only starts when you scrap that stand-alone digital strategy.
The Big Picture For years, financial institutions have been prodding their customers to take care of more of their banking tasks online. After all, digital experiences offer customers with the ease of handling routine tasks such as depositing checks and transferring money between accounts whenever and wherever they want. For banks, creating end-to-end digital channels offered the potential to generate savings, but only if customers went online and consequently retired their branch and telephone usage patterns. Then came the coronavirus pandemic – which created the perfect opportunity for banks to broaden their digital transformation. And customers have never been more ready to bank online.
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The Big Picture I went into a bank branch not too long ago. Only because I didn’t have another choice.
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As we’ve learned from consumers during the COVID-19 pandemic: Banks need to seize this digital moment before they become mere marketplace memories.
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