Managing a Digital Customer Experience in Banking
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In today’s show, we discuss customer experience in banking and best practices for digital-first interactions. Today’s guest is Alex Jimenez the Chief Strategy Officer at Extractable, a digital strategy, design, and data analytics consultancy focused on the future of financial services. He has a long career in banking strategy with companies like Zions Bancorp, Rockland Trust, Bank of America, and Fleet Bank. He has been recognized as a thought leader and influencer in fintech, payments, and innovation.
A lot has changed for financial institutions during and after the pandemic regarding managing a digital customer experience in banking. Customers expect more video and digital services as they’ve experienced across other industries and banks/credit unions now have to think about not only managing branch experiences but how to manage digital experiences. This is not only technology-related but isn’t successful without the culture top-down approach.
What Obstacles Should Be Considered When Developing A Digital Customer Experience in Banking?
- Many executives have still not bought into the idea of having to change their business models. Some executives think the branch is still king and are expecting everything will be back to quote-unquote normal. And that’s ignoring the past. Ignoring the last few years when things have been changing even before the pandemic.
- Some financial institution executives think people do not do business with machines. There is a kernel of truth in there but the reality is that people do business with machines. Otherwise, we wouldn’t have Amazon, Zappos, Google, Facebook, and Apple, right? There is a big misunderstanding there from a lot of the legacy executives out there.
- Some people are very excited about the technology that’s coming into the business world such as digital customer experiences in banking. They look at digital transformation, they’re all about digital. They talk about digital banking but and they’re not looking at the customer side. What is it that they come to a bank or credit union for? They’re not coming out for technology, they’re coming for a banking product. A few years ago, the CEO of BBVA, in Spain was applauded by many people for saying that BBVA is no longer a bank, but a technology company.
Are Most Strategies in Digital Customer Experience in Banking, Forgetting Retention?
We spend a lot of time talking about how the customer experience should be in acquiring a new customer but we lose track of the retention side of digitally retaining that customer. A lot of financial services executives are focused on the digital acquisition, digital acquisition, digital acquisition, and you can spend as much money as you want on acquiring those customers. But if you acquire them to make them come into a physical location to service them or put them into an existing process that is none digital, you will lose them to someone who can. If a customer starts their digital customer experience in banking digitally, they should have the option to be serviced digitally. If a customer starts their relationship through a physical location, we usually try to get them to go digital for certain servicing items such as online banking but make them come into a physical branch for other items. This gets back to the digital strategy of what are the customers want, not only as to prospective customers but how do you digitally retain them?
Are Customers Frustrated With HALF Digital Customer Experiences?
Alex discusses this experience in financing his new car through his credit union. While the online application was quick and efficient, the process of then pick up a check required hours of physical time going into a location. What started as a good customer experience in banking, turned into a bait and switch physical branch process.
Are banks and credit unions thinking about digital customer experiences in the shoes of their members and customers? Are you easy to do business with for customers wanting convenience?
Who Has the Most to Gain from Technologies Like Video Banking, Mega Banks, Direct Banks, or Local Community Banks?
You go to a smaller community bank or credit union for the local relationship. However, most folks that bank with megabanks do it for technology or branch national footprint
Since the cost to implement solutions like video banking for digital customer experiences has significantly come down, it makes it affordable for all-size financial institutions. However, credit unions and banks regionally and locally have the most to benefit, with the fastest ROI. They can implement faster and change culture, process faster than megabanks.
What Should Be on the Digital Strategy Roadmap for 2021?
While banks are usually focused on the ROI, credit unions are more focused on the member experience. What they need to be thinking about is what the member or customer is wanting from an experience standpoint. A digital strategy should define what problem they are trying to solve for their members or our customers. Alex says I’m sure you get people coming to you and saying, “Hey, I want video banking!” When you ask what problem you’re trying to solve, sometimes they don’t necessarily know what specifically they’re talking about. They just want the technology, they just want to put it in. So it’s taking a step back, figuring out what technology you want, or what is the problem you have, and then figuring out how to solve it, and then put the technology on top, as opposed to the other way. I generally just see it more going, from a great idea. Let’s put the technology and hope it solves a problem. And sometimes they solve a problem, but it’s not the problem that the members of our customers have.
Is Culture Buy-In From The Top Down Critical?
If there’s not, buy-in culturally of we’re going to support this process or this digital strategy. And it’s just a bolt-on over here or a bolt-on over there. You’re never going to get the adoption internally to make it successful or adopted. If the culture buy-in is not there you’re never going to get the marketing, communications behind it for usage from your customers or member. How do organizations, start that process and think about culturally, what do they want to be? What are their values culturally, how they want to do that customer and member experience?
- The organization has to have the leadership committed to changing the culture. If the CEO and the board are not behind the process, the digital transformation it’s going to fail.
- CEOs can’t sit back and waiting for the executive team to get behind the idea of change rather they have to lead the change. Sometimes the CEO may not feel uncomfortable with the technology or they don’t have appropriate knowledge so they have to delegate it. However, the person needs the authority to lead change across teams.
- Having good change management to lead culture change is critical. In other words, if you’re going to do a digital transformation, you should have a bucket for digital transformation, and you have an executive person who manages that program, who is the person that owns that program, owns that program budget, the funds between all the different projects and make sure that they have the right top of the picture of the view of the whole program. It cannot be done siloed.
- It’s not just the digital transformation of the customer experience only it’s the employee experience as well. It goes from HR, finance, back office, tellers, origination, throughout the organization.
- Compensation has created barriers to provide digital customer experiences. Currently, in most banks, a relationship manager, isn’t incentivized to help other relationship managers. They are not compensated to advise, increase wallet share or sell more products to other customers. Customers demand convenience and the days of “you have to talk to Larry, he’s your business banker” have changed. A large percentage of customers just want anyone available.
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