Some might say IT has come a long way in aligning its priorities with the business. Others would say the gap remains far too wide.
When IDG Research Services surveyed industry decision-makers about the future of banking, 86% of non-IT personnel said improved customer satisfaction was the top expected benefit of digital transformation. Only 60% of IT leaders agreed.
While customer satisfaction is at the top of the list for both business and IT leaders, the survey, sponsored by AT&T, highlights the focus IT has on security, independent of customer experience. Other gaps revealed include:
“It’s important to have a single enterprise plan, with everyone at the top in alignment regarding how their organization supports the effort,” writes Daniel Newman, Principal Analyst and Founding Partner of Futurum Research and the Chief Executive Officer of Broadsuite Media Group. “Ultimately, the entire corporate culture must embrace the digital transformation and improve along the same vectors.”
To thrive and compete, financial institutions must do more than adopt new technology. They must optimize the brand experience to meet customers where they are: a fast-paced, always-on, digital world with a multitude of choices.
Financial services firms that don’t want to be left behind must transform the customer experience, competing or partnering with fast-moving financial technology (FinTech) companies that continue to innovate beyond traditional banking services. A survey by Accenture found that almost one in three customers of banks and insurance companies globally would switch to Google, Amazon, or Facebook if those companies offered financial services.“
U.S. banks have a long way to go to realize the promise of digital self-service,” suggest Bain Capital analysts. Their survey found that among most frequent visitors to branch bank tellers, 42% of those aged 18 to 34 had tried using another channel before visiting the bank. “Among customers of all ages, much of the volume in branches and call centers consists of routine interactions that could be avoided if customers felt better served by digital.”
Many banks are in a quandary. Their technology options don’t yet provide the personal touch or value proposition that face-to-face transactions do. Meanwhile, branches are under pressure to balance smaller footprints with ever-increasing customer expectations.
Like other industries, banks must adapt to the multichannel reality of providing customer service in the digital age. That means retooling how they interact with brick-and-mortar customers and how they incorporate centralized services and resources into local branches. It also means they need to employ digital technologies to expand brand presence from the bank to online and mobile and utilize new digital tools to attract customers.
The IDG survey indicates that 95% of IT respondents and 76% of non-IT respondents agree that an increasing number of new account sales are happening outside the branch. That leads some to conclude that banks should be more aggressive in closing branches for cost savings. Others contend that customers want those physical points of contact and that branches should be repurposed as high-value advisory outlets. An American Bankers Association survey of consumer preferences reveals a mixed opinion: the majority of consumers researches mortgage options online but wants to complete the application process at a brick-and-mortar location.
Giving up a bank’s physical footprint would diminish valuable community branding opportunities and advisory services. This is the same dilemma facing the retail industry.
Online sales are growing at the expense of in-store sales, but they still account for less than 10% of overall sales.
According to a consumer survey by the Pew Research Center, “Sixty-four percent of Americans indicate that, all things being equal, they prefer buying from physical stores to buying online.”
It seems consumers are learning to use the latest digital tools at a faster rate than their service providers. To thrive and compete, financial institutions must do more than adopt new technology. They must optimize the brand experience to meet customers where they are: a fast-paced, always-on, digital world with a multitude of choices.
Bank branches must become more integrated with digital services, and physical branches must transition to serve as gateways to those services. For example, concierges with tablet devices can easily evaluate customers’ needs and guide them to online meetings with remote mortgage specialists.
According to the IDG survey, 70% of respondents say their banks have invested at the corporate level to improve the customer experience, and 46% plan changes over the coming 12 months. In comparison, 46% indicate changes have been made at the branch level, and 18% plan changes over the next year.
For many banks, change means modernizing and integrating what are often disparate core legacy systems that function as silos. They need to invest in data analytics to fully understand customer preferences to better personalize services. Another area needing investment and modernization is the legacy network, which is ill-equipped to deliver new digital services quickly.
Victor Milligan, Chief Marketing Officer with Forrester Group says, “Customers across generations are seeking both richer and more personalized digital experiences … Banks have been active in creating digital services and mobile apps to address this need, but in reality, they have been codifying existing practices and not creating new experiences that evoke greater affinity.”
AT&T is a leading provider of integrated solutions for business, powered by the global network with more secure connections than any other provider in North America. To learn more about digital transformation in the finance industry, visit our Financial Services solutions page.
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