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Custom banking experiences – what you need to know


Lauren Wilson - January 10, 2019 - 0 comments

Custom banking experiences – what you need to know

Banks and credit unions are embracing the opportunity to enhance their customer experience through customization, and they are not alone. From retail to food service to fashion, customized experiences are in demand. While mass customization is not a new trend, it continues to prevail across industries. Transformational new technology evolves the customer journey and adds new capabilities. While at the same time customer expectations have never been higher, and continue to grow. Michelle Moore, Head of Digital Banking at Bank of America shared “Our goal is not just about delivering access to resources and convenient solutions – it’s about anticipating and meeting our clients’ ever-changing needs.”

Here is some information about custom banking experiences that you need to know.

Personalized Customer Experience

Personalized customer experience is no longer reserved for high-value clients. Digitalization has enabled scalability of products, services, and experiences, making them accessible to all customers, on demand. Customers expect to be able to get what they want, when they need it, where they are, and they expect it to be personalized.

To adapt, financial institutions are shifting away from cost-saving rationalization efforts and are building simple and cohesive personalized customer experiences. However, it may be for different reasons. When Digital Banking Report asked financial organizations globally about their customer experience objectives, many of the goals revolved around their own benefit rather than how the client could benefit. The top two answers were to improve the share of wallet (29%) and to gain efficiency (25%). Improving customer advocacy was the lowest ranked objective.

Yet financial institutions who prioritize customer advocacy and personalized experiences are rewarded with both revenue and efficiency through more effective campaigns and increased loyalty. In the same survey, banks shared that their most challenging customer experience project was customer analytics, a core capability required to execute on personalization. While tools are accessible and affordable many bank marketers are still using outdated data sources or marketing methodologies. Those with the right tools lack the training to use them effectively. Shoring up this skill gap is a key priority for all financial institutions to succeed at providing customized banking experiences.

Serve first, sell second

When customers were asked what would have most immediate impact on improving their banking customer experience they said daily digital transactions. Yet many banks are missing this message. Their top two responses were customer support and resolution (55%) and great products (43%). In discussing the survey result, Digital Banking Report highlighted that while customer support and problem resolution are important, they only drive satisfaction when something goes wrong. It’s the daily interactions that need to be the priority, and personalized.

Providing a personalized experience requires a well planned, integrated, and customer-focused service model. Financial institutions should leverage tools such as a customer relationship management (CRM) to enable information sharing and all interactions should be well documented. Analysis from these service inputs combined with other customer data will identify and prioritize where the focus should be put in the sales and marketing process. This enables sales to be personalized in their targeting.

In addition, Deloitte recommends transitioning from a sales/service orientation to a solution orientation. In an age of reduced trust, due to the financial crisis in 2008, and improved availability of financial literacy information, many customers are better educated on financial service products and offerings. The previously successful “one-size-fits-all” sales strategy is now a deterrent. Rather, market leaders build rapport with their customers while providing personalized service, driving loyal and trust. Providing service in this manner provide natural moments to offer solutions.

Not all of these moments happen during or require human interaction. McKinsey has found that customers are happy to buy and be advised online and by remote advisors for more complex products if the product for their needs. It’s important to share enough information to be confident in the purchase.

Channels of choice

Part of providing a customized banking experience includes allowing the consumer to engage with their bank through the channels they prefer, at the times they want to.  When building an experience, examine the behaviour and lifestyle of your targeted customer segments. In their research, McKinsey defined five customer segments “from those that prefer remote and digital interaction for everything (“bank in my pocket”) to those that abstain from digital (“branch driven”)“ demonstrating the range of customer preference banks channels need to consider.

Deloitte suggests banks observe the retail sector’s response to the e-commerce boom for inspiration and reference. Today, retail purchasing, fulfillment, and return policies allow customers to mix and match channels based on their convenience. Much of this was made possible through the implementation of innovative digital and technical solutions extending to the store level. For banks, this means that it is possible to gain the benefits of serving digitally while maintaining the non-digital channels clients prefer. McKinsey suggests that banks create digital customer journey applications that can be applied across channels while making branches digital in their operating model to make this shift.

A common theme and takeaway for customizing experiences is digitalization. Globally, Nordic countries lead. At the most digital Nordic bank, 75 percent of customers logged in for service, and 40 percent of sales were made through digital channels. On average the US still has a way to catch up. What is your digitalization strategy? We like to know! Share with us at partnerships@myvoleo.com.

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