Consumers are leading the transformation from the traditional offline experience to a more enhanced digital user experience. With the widespread popularity of smartphones and fast spreading convenience of the mobile banking applications, customer behaviors are shifting towards a mobile first experience. Banks are left with the challenge of finding the best and most complete solution without the burdensome pain points along the way.
Some recent studies in a Bain report indicate that:
- Mobile banking offers a more satisfying experience than a branch visit, a phone call or internet banking.
- Chat and video is a useful resource for handling complex issues.
- More banks are moving routine tasks to mobile to enhance loyalty.
- It is believed that 40% of US bank customers who use mobile banking are less likely to switch banks.
The Mobile First Shift
An increasing consumer base of young customers in emerging markets with smartphones are consistently relying on mobile devices to make all of their important daily transactions. In Southeast Asia, small businesses have been using cash on delivery (COD) or ATM transfers for many years to facilitate immediate cash transfers. This can be seen from the street side vendors to the busy wholesale shopping centers in Thailand. For these small businesses, mobile banking apps have now become more of a real time tool for COD transactions.
Data indicates that mobile interactions now exceed online interactions in almost 10 of the 16 countries surveyed in the Bain report. Though the shift is apparent worldwide, the biggest mobile/online shifts since 2013 has been witnessed in the Netherlands, South Korea and China.
Customers in these places have not only increased the volume of their interactions but also elicited a far more encouraging response from the relative banks. Banks are working overtime to make their apps and websites more user-friendly by taking far lesser time for loading and conducting a transaction as compared to the online computer or branch experience.
A change and a shift towards mobile banking did not directly lead to a reduced branch usage. After all, as they say, old habits die hard. Despite recording a distinct increase in mobile interactions, routine branch interactions reduced at a much slower rate in comparison. Banks need to incorporate and train customers constructively to take advantage of the benefits available on the digital platform. Building a better digital financial hub for success by offering
- Fast authentication and simple mobile design
- Customer service anytime and anywhere
- More personalized data information
- Creating a system of processes to meet customer expectations
What The Customer Wants
According to studies a routine branch visit for the same kind of transaction is likely to elicit 2.4 times more annoyance. This trend is confirmed across countries which have recorded higher mobile usage including Netherlands and South Korea.
Essentially this same principle works for countries like India, Brazil and Mexico where the advanced ATM usage has reduced the need and instances of branch visit significantly. Somehow for most customers this mobile/digital interaction has directly translated into better relation with the banks and longer login sessions.
Using Mobile For Sales And Service Interaction
Almost 59% buyers are considered to be using both digital and traditional channels for conducting their research and purchase. Mobile is the leading channel across all age groups followed by online. For simpler products mobile research is gaining acceptance especially with younger customers so it is apparent that banks must be ready to handle this type of sales and service transaction.
Though the actual amount of penetration and use might differ from bank to bank and country to country, online transactions have opened the doors to create a more pleasurable experience.
So does that mean increased mobile banking can be directly linked to better customer loyalty? Well surprisingly data seems to suggest exactly that and more:
- Customers who use branches are 3x more likely to switch banks
- A branch visit in the US is likely to be 2.3x more annoying than a mobile interaction
- For every 100 mobile interactions, there is an average decline of 16 branch interactions
Banks are benefiting by shifting their customers to the digital platform. Banks are enjoying higher customer retention, a reduction in overhead costs and fewer branch transactions.
The pace of profits eroding and margins shrinking is forcing banks to reassemble their banking strategy to connect with the customer or risk losing them to a competitor with a better solution already in place. As a result, the omnichannel customer is proving to be more digitally engaged and loyal which clearly gives a better lifetime value of the customer for the bank. The multichannel strategy needs to be taken to the next level by providing better technology to provide a consistent positive customer service experience. Banks and accelerator programs have stepped in to find new innovative ways of enhancing the customer experience and eliminating pain points by partnering with fintech startups that are ready to disrupt the financial world.