The financial services industry has operated in an environment of hyper-change for over 30 years, beginning with deregulation changes passed by Congress in the early 1980s. In that time, the number of banking entities dropped from over 15,000 to less than 8,000 through mergers and acquisitions, opening up opportunities for new products and creating pressure to monetize knowledge of the customer. Small community banks merged into regional, national and then global conglomerates. System complexity multiplied and offerings diversified as financial institutions’ one-stop banking brought deposit, checking, loans, investments, retirement and a host of commercial banking products.
In the late 1990s, online investing firms like Scottrade, E*TRADE and others entered the picture offering a new model for online customer interactions. These companies proved that consumers were willing to entrust their money to financial services firms with no branches. While there had been earlier offerings such as within Microsoft Money or via proprietary systems, the online investment shops approached their launches with a Silicon Valley feel, the exact opposite customer experience from their Wall Street counterparts.
Since 2000, we’ve seen online banking go from novelty to critical for any banking consumer. The days of brick and mortar-focused banking strategies are fading fast. Customers are increasingly basing their banking business primarily upon an institution’s online capabilities and the customer experience. Many of the fastest-growing financial services firms don’t even have physical bank branches. A number of the traditional Wall Street investment banks have even responded in kind with digital banking offerings.
One final data point: by 2014, the American Bankers Association reported that even the majority of Americans aged 55 and over preferred banking online as opposed to in-branch or via ATM. The customer has spoken—the future of banking will be via online experiences.
The Battle for Experience
TEKsystems works with over 650 financial services organizations each year, providing everything from technology and deployment assistance, to UX and AI. We see the hundreds of mobile developers and digital strategists employed at our largest banking customers. We’re in the conference rooms of regional banks, surrounded by a floor-to-ceiling tapestry of competitive screenshots and wire flows. The language of banking is no longer one of “service calls” and “SQL statements”; those have long since been replaced by “user-centric design”, “IoT”, “AI” and “digital experience.”
Every institution is racing to arm itself with the digital natives who can move its platform forward and keep pace with the required features to avoid customer churn. Digital platform spend is at record levels and user experience services have doubled year over year for many organizations.
So, if the biggest institutions have the most talent and the deepest pockets, don’t they automatically win the customer? What can a regional or community bank do to survive and even thrive in this battle for customer experience?
How to Win the Battle for Experience
- Review your brand promise. Customers crave authenticity and respect a brand that is more than just an interest rate or an ATM. How do you manifest your core values in your copy? How do your content standards and copy align and amplify your message?
- Talk to the people who matter—your customers. If you don’t already have a user research capability, the time is now. Form focus groups and solicit opinions on a regular basis. The expectations of a banking partner continue to evolve and it is critical stay in step with the changing industry and new market entrants.
- It’s all up to millennials. Regional banks across the country are particularly susceptible to the “youth gap”, a lack of professional customers under 35. One of our clients went so far as to admit that not only do they not have millennial customers, the team really “didn’t even know any millennials.” As baby boomers begin to pull back from this bull market, retire and begin asset withdrawal, catering to millennial needs and acquisition is not just good business, it’s imperative.
- Establish clear digital user journeys. Visual user journeys and maps can help provide clarity in the often siloed world of financial services technology. Identify key customer goals (hopefully from those new focus groups) and develop current state and future state user journeys. These roadmaps should align to tangible service improvements such as step reduction, streamlined processing or shortened process time. From this lens, system constraints and misaligned teams become evident.
- Moving from UX to CX. We get it, banking is complicated—many systems are involved and different organizations have their own goals. But it is remarkable how often institutions cannot accurately depict the end-to-end customer experience from idea to task completion. For example, if the web experience for loan application is great but decision support fails, the online loan team has still failed in its goal. Wherever possible, align and manage leaders by customer journey rather than function.
- Identify a unique feature to separate from the pack. Let’s face it—a regional bank will never have the scale and mass of the industry behemoths. So don’t try to do what they do. Let them help shape the core banking feature sets at FIS and S1 while they push for the next big thing; and then adopt it in the next release. (Just ask the banks who spent tens of millions to develop remote deposit capture versus those who received it as part of their online banking package.) Then, identify a feature that you can develop and curate on your own. It might entail social banking, community engagement or a unique service partnership with another industry. These features can make a huge difference in branding your bank and standing out from the crowd.
- Remember, the battle for experience is about talent, too. Our clients understand that recruiting top talent means understanding and creating a compelling Employee Value Proposition (EVP). The EVP that attracted senior leadership may be very different from what draws designers, digital strategists and mobile developers to your bank. This is particularly important given the many job seeker surveys find that financial services is not an industry of choice for millennials. Attracting New York, San Francisco and Chicago talent to Tulsa, Columbus or Salt Lake requires a bit more creativity and time. It may also require carving out a space with a distinct culture from the core corporate environment. One of our clients has seen success with exactly this approach as it redesigned an entire floor for Digital Innovation. Gone are the cubes (and most of the walls too) with so much whiteboard space that it had to mark which walls weren’t okay for markers! Beyond physical space considerations, HR and recruiters should consider the needs of this audience: a desire to be challenged and work on meaningful work, flexibility in schedules and environment, and the ability to contribute their passions.
See how TEKsystems Digital can help transform, extend or accelerate your digital experiences.
Scott Beach is the solution director for TEKsystems Digital. He has spent the last 20 years designing customer experiences, developing platforms and leading technology transformation for Fortune 500 companies. He resides in Charlotte, North Carolina (when he’s not on a plane).