Making Digital Easy is Tough for Banking
At a time when mobile banking is increasing in importance, the ability to simplify basic transactions has the biggest impact on consumer satisfaction and loyalty.
By Jim Marous, Co-Publisher of The Financial Brand and Publisher of the Digital Banking Report
With competition increasing from both traditional and non-traditional financial organizations, the importance of an improved consumer experience and resultant satisfaction and loyalty has never been greater. Not only does an improved experience impact growth of a relationship and retention metrics, it can improve referrals and even the economics of serving customers and members.
The challenge, at a time when tactical and strategic priorities are multiplying, is determining where to focus efforts to get the greatest impact. Should websites and digital banking apps be upgraded? Should branches be redesigned and reconfigured? Should back office systems be upgraded and front-line staffs retrained for a more digital banking existence? What individual and/or combination of initiatives should be pursued in the quest of ‘delighting the consumer?
When Bain & Company asked consumers the question, “What is the primary reason [this interaction] increased your likelihood to recommend your bank?,” the overwhelming verbatim response was that the interaction was ‘easy’.
Simplifying Routine Transactions
Bain & Company surveyed 14,812 retail banking customers in Australia, Canada, the UK and the US, asking the participants to assign a Net Promoter Score® (NPS) to their recent experiences with a dozen common banking interactions, from everyday transactions to more complex sales and service experiences. As could be expected, those who were delighted with their recent experiences gave their financial institution a higher score.
Interestingly, while improving any single interaction improved the overall NPS at a given organization, some interaction had a bigger impact on overall consumer satisfaction than others. According to Bain, on average, routine interactions contribute more to the score than do sales and service interactions (even though sales and service interactions have a greater individual influence).
For example, a significant percentage of consumers who have a good experience opening a credit card, applying for a mortgage loan or even opening a new checking account would likely recommend their bank or credit union. The likelihood of a consumer recommending their financial institution based on a positive everyday transaction would be 20-30% lower. This makes sense since consumers put a higher value on the more complex interactions.
The difference is frequency. With frequency factored in, routine interactions have a greater cumulative effect: According to Bain, these interactions contribute three to four times more than sales or service to the lift in a bank’s loyalty score since they occur so much more frequently.
So how can financial institutions improve routine transactions? One way would be to eliminate steps in the most frequently performed tasks (such as checking balances or making payments). Allowing customers to check account balances without needing to log in, or use a phone’s contact list to enable direct P2P payments are two examples of simplifying everyday transactions.
Moving Customers to Digital Channels
Bain research has determined that, for most banks, “60% to 70% of teller transactions are bad (because of errors or rework) or avoidable (because they would be quicker, easier and cheaper through digital channels)”. This is why Bain strongly recommends that transactions be migrated to digital channels for improved satisfaction ...
To read the rest of the article regarding the impact of making basic transactions easier, go to the complete article here ...
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8yExcellent article. Could not agree more. EASY is the key word consumers look for when interacting with banks.