Our world is increasingly networked. Since the introduction of the iPhone in 2007, consumers everywhere have come to rely on their ability to conduct business anytime, anywhere, from their handheld devices. What they expect from their financial institutions has naturally evolved as well. As the chief business officer of a financial technology company, I believe people today are making a particular preference clear: They’re placing a lot of importance on the quality and customization of the experiences they have with their financial institutions.
Research indicates that U.S. banking customers want convenience when it comes to financial matters. One indicator of this is what I believe to be an increasing reliance on mobile to conduct business. PwC’s 2018 Digital Banking Consumer Survey of about 4,000 consumers revealed that the share of mobile-dominant customers is rising, with 15% of customers now mobile-dominant, an increase from 10% just a year ago. PwC found a rise in mobile banking, not just for those who primarily banked online, but in other categories as well.
Banking customers want less friction and more help.
One reason for this rise in mobile banking could be a desire for less friction and greater accessibility. Among many possible factors, one that stands out to me is the millennial generation as a big segment driving this shift.
It’s not hard to understand why. People who have grown up using the internet and social media are used to companies like Facebook, Instagram and Google. These companies have likely devoted years of research and billions of dollars to create consumer experiences that are intuitive and frictionless.
Today, young people may take this for granted, which makes for the kind of frustrations you so often find with traditional banking (like filling out paper forms or waiting in lines) seem not only irritating but surprising and unnecessary. This new generation may expect to bank anywhere on their phones.
Besides becoming more mobile-centric in their banking, I’ve seen that many young people want personalized insights and actionable financial advice from their financial institutions in real time. Millennial consumers likely think: "If my bank has all this data about me, they should be giving me something of value in exchange and helping me solve my problems."
It seems many consumers feel this way. PwC claimed that most consumers are “goal-oriented” and focused on long-term savings goals. When it comes to those goals, I believe people are hungry for more help reaching them and personalized advice at key moments. If they don’t get those things in a convenient and speedy fashion, the new model of mobile banking means that customers would have no trouble switching institutions or providers.
What do we mean when we say “help” reaching financial goals? Increasingly, that help could come from artificial intelligence. A recent Accenture survey of North American banking customers discovered 46% are willing to use “robo-advice,” 40% would consider switching banks to get more personalized service and 39% said they want their financial institution to provide “actionable financial advice on a proactive, real-time basis.”
Banking customers want personal attention.
Technology is not a cure-all for what consumers want, however. I believe they still care about getting personal attention and support. Often, that could equate to a desire for access to physical locations where they can speak to real people: According to PwC's research, 65% say they want access to a local branch. Even though many financial customers might begin their journey online, either on desktop computers or a mobile device, they still prefer to have the option to come into a branch and handle certain aspects of their financial business face to face.
Unfortunately, the retail banking experience often leaves a lot to be desired. For example, a recent McKinsey article suggested that physical branches may be “old, underoccupied, and poorly maintained.” Therefore, walking into a bank branch might feel cold and impersonal to the average consumer. For a millennial, I believe there’s also likely the frustration of having to explain who you are and what you need to a human bank employee when you know the bank already has all your information.
To me, this means that the younger generation of banking customers may want the customized service they’re used to getting when they’re logged in on their devices to carry over to their in-branch experience. I believe the goal should be a hybrid of the high-tech present with the small-town past where you might walk into a local bank and be greeted by a teller who knows your name and business because you’ve got a personal relationship.
If we look at what small business owners want from their banks, this message seems loud and clear. One 2016 survey from the New York Federal Reserve shows that business owners reported the most satisfaction when dealing with small banks and credit unions, versus large banks (80%, 78% and 61%, respectively). Small business owners likely appreciate when they can build relationships and deal with partners at their financial institutions who care about their personal and local needs.
Financial institutions can use technology to deliver.
I believe one result of the rise of big data and artificial intelligence (AI) is that now, financial institutions are able to deliver the individual attention that customers want, without all the constraints of local in-person banking.
Because of improvements in AI and the speed of data processing, it seems to me that customers have come to expect every piece of data they share with their financial institutions can and will be used to deliver personalized services at the right time. I believe banks and other institutions have actually possessed all the data they need to fulfill these customer desires for a long time, yet the cost (in time and labor) of processing that data has been too great — until recently.
Now that we can potentially process all that data almost instantly and use AI to provide actionable advice, credit decisions, financial products, and insights to customers based on their unique situations and histories, financial institutions have a great opportunity to finally change banking from transactional to personal and experiential. I believe financial firms should consider how to break down information silos and arm employees and customers with real-time insights. If employees are empowered with data, they can also deliver better service at the point of customer contact. If financial firms can do this, they’ll be positioned to give customers a more personalized experience at every touch point.
