Digital efforts by banks have uncovered a challenge: Customer expectations are continually shifting. For instance, more customers are using their phones for transactions — in its 2018 Digital Banking Consumer Study, PwC reports 50% of customers now primarily rely on mobile banking, and mobile is the only channel that has seen increased engagement in the last five years. But consumers still expect in-person options for service too: the same PwC survey found that 25% wouldn’t open an account with a bank that didn’t have at least one local branch, and 65% felt it important to have.
It is important to note that customer satisfaction with direct banks’ mobile channels has fallen from last year, and direct bank customers’ awareness of and engagement with basic functions they could perform in the mobile app had also declined.
The banking industry, like many other industries, is poised to experience unprecedented change as it moves towards a digital industry. While most bankers have already begun to embrace a digital landscape, there is still a lot of challenge to come. The future of banking will include a number of new ideas and methods for accomplishing tasks on a grander scale. And, perhaps most importantly, the customer will be at the forefront of that change. Today’s average banking consumer expects more, demands it faster, and expects better results. Banks unable to compete with those meeting these demands will likely struggle to remain viable in the long term.
Banks will respond to competition from big tech by shedding their reluctance to adopt open banking strategies, industry observers predict. Cultural shifts inside the financial services industry will also help firms better orient themselves to meet new customer demands.
One of the key concerns for any bank is maintaining customers. One challenge that banks will need to overcome, then, is remaining relevant as new challenger banks begin to rise. The best way to be able to overcome this challenge is to provide the most innovative and hands-on service to customers. Even the Millennial will remain with the bank that meets their needs and is always available to them. This will include creating that frictionless environment that consumers need.
To achieve this, banks will need to employ more artificial intelligence in their customer-sided efforts. For example, the use of AI chatbots that can interact with and provide information to consumers immediately – even in the middle of the night – will be a key factor towards success. It also means utilizing touchpoints that most banks are unfamiliar with such as Facebook. It’s possible, for example, to connect with would-be customers or current customers through Facebook chatbots, solving their problems instantly.
It is a combination of all of these areas that will ultimately enhance or limit the success of today’s banks. Digital innovation is one component of this. Artificial intelligence and virtual reality are another. The key piece holding it all together is the desire to innovate to meet the customer’s ongoing demands.