Compared to past generations, the current generation of banking customers has vastly different expectations of their banks.
Research shows that the majority of modern customers no longer feel the need to utilize a single financial firm for all their banking needs, preferring instead to spread their transactions across a variety of service providers. Contemporary technological advances and widespread digitization have also conditioned customers to expect faster, more readily accessible, and more personalized digital services from financial institutions.
These rapidly changing business conditions have opened doors for new and innovative players to enter the banking industry, among them fintechs, challenger banks, and big tech platforms. What’s more, many of these institutions have been able to structure their operations and business models with the needs of digital natives in mind. These up-and-coming competitors pose a stiff challenge to traditional banks, who are under unprecedented pressure to evolve in order to maintain their relevance.
Many banks are seeking to navigate these challenges by enhancing their current systems with more robust core banking software solutions. An intelligent approach to innovation, however, must begin with understanding the modern customer’s needs and desires. In particular, today’s customers have been shown to expect the following capabilities from their retail banks:
User-Friendly, Accessible Digital Platforms
Most banks operating today have long allowed their customers to access basic financial services such as deposits, payments, and transfers through digital channels. Dedicated websites and mobile apps enable customers to conduct these transactions in real time without having to visit a physical branch. While consumer satisfaction with this array of fundamental services is generally high, many have begun to clamor for digital access to more complex banking activities.
To be specific, today’s customers want to be able to open accounts, apply for loans, and perform other more sophisticated financial tasks on their bank’s online and mobile platforms. Moreover, they want to be able to perform these tasks easily, in their own time, and with little to no human contact. To deliver these services efficiently, banks will have to upgrade their technological infrastructure, introduce more self-service functions, and optimize their digital channels to be maximally user-friendly.
Seamless Integration with Third-Party Providers
Superior openness and connectivity are must-haves for any financial institution to maintain a competitive advantage in an increasingly digital business environment. As mentioned above, modern customers have come to expect highly integrated user experiences among the service providers they patronize. Banks can meet these expectations by establishing solid working relationships with partner firms and striving to improve connectivity between their platforms.
Many users, for instance, would like to be able to pay for purchases from online stores through secure bank transfers or to top up digital wallets directly from their bank accounts. To address these desires, banks must demonstrate that they can facilitate these transactions for their customers in ways that prove to be efficient, secure, and easy to use. If they succeed in doing so, customer opinion of both the bank and the third-party providers they work with can improve significantly.
Contextualized, Personalized Advice
Much has already been said about modern customers’ preoccupation with speed, convenience, and round-the-clock accessibility when it comes to financial services. Equally interesting and important for banks to consider, however, is the demand for more personalized advising and customer communication. This need is often flagged as especially urgent by younger consumers, particularly those aged 30 and below, who frequently look to their banks as sources of sound financial guidance.
Younger millennials and members of Generation Z currently make up significant portions of the customer base for banks all over the world. Because these young adults have grown up exposed to numerous economic crises and extended periods of fiscal instability, they tend to be much more interested in learning about money management compared to customers from previous generations. Many surveys have also shown that these younger customers are receptive to professional advice about a variety of financial matters, including building savings, making investments, and defining long-term financial goals.
Reliability and Trust
Brand affinity has always been an important factor for financial institutions when it comes to attracting and retaining customers, but it has come to be especially so in the current times. Recently conducted surveys reveal that consumers nowadays look primarily for “trust” in financial institutions they choose to work with long-term. Other factors, like competitive rates and attractive offers, are often considered distant runners-up in comparison to this major consideration.
In short, customers these days tend to be more cautious about their money than previous generations. Because the sensitive nature of personal financial matters makes the relationship between a bank and its clients an intimate one by default, banks are generally in a good position to present themselves as trustworthy partners. Banks that work to enhance their data security, operational efficiency, and customer service experiences will be sure to boost customer satisfaction and confidence over time.
In these fast-paced and highly volatile times, the ability to anticipate and provide for changing client needs is crucial for the survival and success of traditional banks. Banks must find ways to upgrade their current systems and work toward unprecedented heights of agility, intelligence, and adaptability. Above all else, the willingness to embrace change will enable banks to distinguish themselves from and rise above their competition.