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.
Yes, this is the optimal moment to advance your journey, but, as with any strategic initiative, you need to first capture a solid baseline of data on your customers and invest the time to understand how they want to meet you digitally. What works for one customer won’t work for another, as you know from the various products and services you offer.
The hardest part is getting started – which is why we suggest you focus on the needs of three important customer segments:
Most of us started our financial lives here, living paycheck to paycheck. These customers need ready access to cash and usually have only the bare minimum on hand to cover expenses, including rent.
These individuals aren’t worried about precisely when their paycheck comes in the door, but they always make sure they have money to cover their expenses. They’re also looking for ways to save as they plan for bigger purchases, like a new car or vacation.
This group can make financial decisions without having to check their income statement because they know they have ample money in the bank. Their focus has shifted to growing their net worth.
Each segment has different needs, so where should you begin? Start by ensuring that simple transactions – check deposits and accessing online statements, for example – are ready and easy to execute digitally. As you gain digital customers’ trust in your digital storefront, you can introduce other features and deepen their relationship.
Fortunately, 2020 has given you a running start on your digital transformation strategy because the COVID-19 crisis has reshaped how we live, work and play. It’s also drastically accelerated changes in how consumers want to bank. Senior business leaders already came into this year with digital transformation risk as their top concern. You certainly don’t want to invest in an initiative that doesn’t deliver on the end goals you and your customers want – and expect.
You also can’t afford to wait any longer. You don’t have to be perfect out of the gate, but know that each next step generates operational efficiency and earned customer engagement that will underpin your bank’s survival in an ever-changing marketplace.
My latest white paper, “Disruptive Innovation and Digital Transformation: A Win-Win for Banks,” 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 make sure your organization doesn’t miss any important step in making this journey successful for your bank and your customers.
Rick Jaros is Spinnaker’s own Jack Ryan. But who knew that an early career chasing Russian submarines under the ice was the perfect training for guiding some of the world’s largest financial institutions in their digital transformations? As it turns out, the common denominators are stealth and strategy.
Critical Initiative Delivery 2 minute read
Before I invite guests to visit, I always clean my house. I tell companies striving for a winning digital transformation, particularly in my industry niche, to do the exact same thing.
Business Analytics & Data Management 6 minute read
The Big Picture 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.
Critical Initiative Delivery, Business Strategy, Change Management 5 minute read
Like how we think? Subscribe to have our articles delivered direct to your inbox each month.
Headquarters: 8000 Franklin Farms Drive, Suite 100, Richmond, VA 23229
©2020 Spinnaker Consulting Group. All rights reserved.