It’s time for consumer banking to evolve. With so much of our world already cashless and connected, consumers have come to expect—even demand—the ease and convenience of a seamless digital experience. Covid-19 has accelerated both the adoption and adaptation of digital technologies by consumers and companies alike. It has also revealed underlying weaknesses in the consumer banking experience that demand immediate attention.
Forward-looking banking brands are already prioritizing investment in technologies—including artificial intelligence (AI) and machine learning (ML)—that help to improve customer targeting, orchestrate recommendations, and predict churn. To properly harness these technologies and deliver a better experience that meets consumers’ evolving expectations, these organizations need to address four key elements: Relationship Value, Appeal, Ease, and Availability.
Our POV, Putting the Consumer in Consumer Banking First, covers all four of these elements. This post is the first in a corresponding 4-part series. It focuses on the foundational importance of relationships in consumer banking.
What is Relationship Value, and why does it matter?
In the past, the consumer/banker relationship was established and maintained via face-to-face interactions. Today, the shift to digital interaction is completely reshaping how this relationship is built, nurtured, and expanded. Banks need to completely reimagine how to build dialog and trust with their customers in the digital age.
A key part of this process is creating Relationship Value, which has to do with the tangible “what” of the consumer banking experience. Relationship Value answers the question, “What is this relationship doing for me?” It’s about establishing a personal connection that delivers customer benefits beyond secure money management. And, for the bank, the goal is to play an enhanced role in the customer’s everyday life.
The good news is that consumers are ready to have a deeper relationship with their banks. A 2018 JD Power study found that 78% of banking customers would like financial advice and guidance from their banks, but only 28% feel that they’re getting it. Obviously, there’s a huge opportunity. Not only that, but the payoff for banks that take the leap is huge. According to a 2019 US Retail Banking Advice Study by JD Power, 58% of customers acted on the advice received from their bank, and—where highly satisfied—44% opened a new account, 86% were identified as Net Promoters, and 86% leveraged their bank for another product.
To close the gap between what consumers want and what they’re currently getting (and reap the very real business benefits), Rightpoint recommends a three-prong strategy that spans pre- and post-acquisition.
Content Strategy – The Right Content at the Right Time to Improve Customer Experience and Drive Acquisition
A content strategy that provides relevant, accessible information not only provides value to existing customers—improving the customer experience, strengthening the brand, and creating cross-sell and upsell opportunities—it also opens up a direct acquisition channel for new customers.
Banks are well positioned to deliver highly targeted content to their customers. The wealth of data, insights, and research at a bank’s disposal combined with analytics allows banks to create and deliver content tailored to specific consumer demographics, market segments, personas, and profiles.
Providing succinct, fun content that answers common financial questions such as “what are the best points credit cards” and “how much can I spend on rent” is an effective way for a bank to engage both existing and new audiences. When consumers actively search the internet on these kinds of topics and come across a relevant content from a bank, it not only drives brand awareness, it also shows that the bank understands real-life pain points and needs. It shows that the bank is listening, and that’s a great way to start a valuable relationship.
Content can also be delivered via a bank’s app. Most banking apps provide little value unless you’re already a customer, but with the right content strategy, a banking app could become a learning portal. Using quizzes and questionnaires, the bank can create a natural entry point for acquisition while at the same time promoting cross-sell opportunities to existing customers.
Contextual Learning – In-the-moment Guidance to Support the Customer Journey
Contextual learning leverages rich consumer data signals to identify when individual consumers are in the market for specific information and advice. For instance, the first time someone clicks on a product or service on the bank website, an educational pop-up can provide important context and tips. Or, after a consumer applies for a mortgage, the bank might send an email about the average annual costs of home maintenance. Or if the customer has a child of a certain age, the bank might send a mailer about 529 savings plans.
The idea is to offer “micro nudges” that provide relevant resources and guidance in the exact moment it’s most important to the consumer. There are many mediums by which to deliver this kind of content, from pop-ups and proactive chatbots to more traditional email and mailers, and even direct outreach when appropriate for high-potential cross-sell and upsell opportunities.
Ultimately, contextual learning content provides timely engagement that reflects what’s top of mind for the consumer. Again, this demonstrates that the bank is tuned into what matters most, helping to build affinity and trust.
Branch Of The Future – Frictionless, Personalized, and Much More Efficient
Time is our most valuable asset, which is why the future of in-person banking will be built around seamless, personalized advisory experiences that leverage the same connected technologies that enable frictionless digital experiences.
Imagine walking into a branch location you haven’t visited in months with the aim of talking to someone about getting a mortgage. When you arrive, instead of wandering around in the hopes of figuring out where to go for assistance, you check in at a kiosk that uses NLP (natural language processing) to capture your spoken purpose for being there. While you’re in the waiting room, you receive a push notification (via a real-time API) with some helpful information about current interest rates on mortgage products. A few moments later, Jennifer—a branch banker—greets you by name and invites you to her office where she has already pulled up your account along with a variety of product options to consider.
This kind of frictionless experience is not only better for the customer, it’s also much more efficient for the bank. Using technology to do things like capture a customer’s image (so the banker knows who to look for in the waiting room) along with customer intent (so the banker can be fully prepared for the conversation) ensures that the conversation proceeds quickly and smoothly toward a mutually beneficial resolution.
Banking has always been about relationships. What’s different now is how many ways we have to initiate, nurture, and deepen those relationships.
The concept of Relationship Value is important, but what’s more important is how banks use that concept to answer the customer question, “What have you done for me lately?” What matters most is how banks apply these ideas in real life to create better, more memorable, and more valuable experiences for individual customers. There are countless ways banks can use content, contextual learning, and the technologies behind the branch of the future to make a real difference in customer’s lives.
Take, for example, a first-time homebuyer who doesn’t understand the pros and cons of ARMs vs. conventional mortgages. Imagine the difference it would make to her if her bank’s mobile app featured a survey to help her determine which kind of mortgage would be best for her situation, guided her through completing a pre-approval form, collected key details about her offer and desired close date, and then booked an appointment with her lender via her preferred communication channel—Zoom.
And that’s only the beginning. Building on the foundation of Relationship Value, banks have a very real opportunity to own the entire home-buying experience by orchestrating the relationships with real estate agents, attorneys, and inspectors. Another way banks can use the tenets of Relationship Value is to show empathy when customers experience hardship, using data as signals to identify the likelihood of default and providing proactive solutions and good guardianship that mitigate embarrassment, defensiveness, and risk. Relationship Value can also play an important role in areas like wealth management by helping banks understand and align with an individual customer’s specific goals while at the same time educating them and setting realistic expectations through a combination of digital and human touchpoints, conversations, and transactions.
The possibilities are truly almost endless.
We invite you to learn more about what’s at stake and how banks can take advantage of the evolving consumer expectations and technology by downloading the full POV, Putting the Consumer in Consumer Banking First. The relevance and urgency of reimagining the consumer banking experience has never been more pressing. The time to act is now.