Jim Marous, Publisher of Retail Banking Strategies, has released the results of his fourth annual survey of bankers, credit union executives, and financial experts to identify retail banking predictions for 2015. I recommend you read the original article – the insights are quite interesting – but the consensus is that 2015 will be the year that banks and credit unions will play digital catch-up. The age of digital banking is here to stay, the those who thrive in this brave new world won’t just adopt new technology platforms, they will understand how technology is having a fundamental impact on consumer attitudes about banking and how to use technology to promote better customer engagement. In other words, it’s not just about assembling the right tools; it’s also about knowing how to apply them.
After compiling insights from banking experts around the globe, Jim observes:
“Two of the most omnipresent trends evident in this year’s predictions were the heightened use of customer insight for the delivery of services and an enhanced customer experience, and the continued development of digital channels and associated digital services.”
We often comment on trends in digital banking in this blog, and digital disruptors are going to continue to change the face of banking. Jim’s top 10 predictions are mapped out in some detail in his own blog entry, but there are a few elements that stood out:
Consumer analytics – Knowledge is power and bankers are using newfound knowledge to improve consumer satisfaction and the customer experience. Fewer than 40 percent of bank customers have reported a positive experience with their bank; a figure that should concern bankers since new competitors outside of banking are competing to handle consumer transactions.To improve customer satisfaction, banks will increasingly move toward interactive and intelligent banking.
Banks and credit unions are learning more from their retail brethren. They are striving to deliver an “omnichannel experience” that delivers a consistent and satisfying interaction no matter what the channel. Research and analytics will tell banks and credit unions more about their customers so interaction and product features can be customized to meet unique needs.
One of the most important disruptive technologies to affect banking in the coming year is going to be big data. Big data has been around for a a few years now, but this year more financial institutions will be adopting big data analytics and related technologies to learn more about their customers and customize their banking experience as much as possible.
New digital channels – As part of the migration to support omnichannel banking there will be more digital channels than ever. Social selling and online interaction is sure to increase as banks move more aggressively to reach customers through online channels. The use of video for customer interaction will likely increase, including the use of “virtual” tellers and video for one-to-one consultation.
Consumers are doing everything online. Online holiday retail sales in 2014 hit a new record high both in web sales and mobile sales. Consumers are becoming more comfortable with online transactions, and despite the high-profile data breaches of 2014, they want the convenience of online and mobile banking. (In fact, one of the 10 predictions for 2015 was the application of technology to promote better security and authentication for online transactions.)
More mobile banking – Mobile technology is arguably the most disruptive technology to affect banking in recent years. Recognizing that mobile will continue to grow as the channel of choice for many customers, banks are going to start adopting a “mobile first” strategy, expanding mobile banking options and making mobile their first means to reach customers rather than an afterthought. Mortgages, loans, retirement planning, financial advice, and more will become part of the mobile experience.
Mobile transactions are also going to gain momentum. There are multiple mobile wallets out there vying for dominance – PayPal,Google Wallet, and others. Industry watchers are keeping a close eye on Apple, Pay to see how it performs so they can find the best way to incorporate smartphone transactions into their customer service strategy.
The whole point is that disruptive technology is only a means to an end, and that end is better customer engagement to promote revenue growth. Consumers are demanding more and more convenient access to money and seamless transactions. Those who can develop the right formula to synthesize technology with customer value will become the market innovators in the year to come.