Banks: keep on improving CX!

If there’s anything that fintech has taught financial institutions, it’s that customers love simplicity and convenience. They love it so much they are often willing to sacrifice some level of product offering or service, so long as they can get what they want immediately, with one or max two clicks.

This has posed a challenge to commercial banks. The retail model is based on packaging a suite of products to meet every need, built around the deposit account, which in turn depends on people trusting their bank with their money.

The advent of digital or virtual banking is based on ideas from consumer tech and e-commerce: simplicity and ease of use. Banks don’t want simplicity; the money’s in complexity. The best bank apps find a balance but many remain clunky. Customers stick around because of trust, but these incumbents risk losing customers.

Digital-only banks have the opposite quandary: they’re brilliant at easy-to-use interfaces, but they lack the suite of products that can generate revenues and satisfy all customer needs.

FIS has recently surveyed consumers in Hong Kong and Singapore, and found that customers try out challenger banks for an offer, but stay if the user experience is good.

The survey also found that customers stay with primary banks because of trust, but they are confused by poorly designed apps or websites that try to cram too many things in.

FIS finds 79 percent of Singaporeans and 77 percent of Hong Kongers are calling for financial apps to have a simplified user experience. That’s a huge risk for complacent banks, and an opportunity for those looking to hone their competitive edge.

What could create a change? Time. Gradually enough people will come to trust digital-only banks the same way they trust the institution with physical branches. At that point, UX will become as important to traditional banks as it is now for the challengers. Because if the customer experience remains cumbersome or hard to navigate, it will be easy – a few clicks – to shift those deposits somewhere else.

The FIS survey makes me think the challenger banks just need to play a waiting game. But they will have their own UX challenges. The successful ones will inevitably grow their product lines. Even those that want to remain focused on just a handful of services will embellish these.

And then the shoe will be on the other foot, with digital-only banks having to restructure their customer journeys to manage the inevitable ‘mission creep’ of additional product lines. Of course this isn’t just about an app design, but how the entire business connects data and accounts from front to back.

In short, the advent of digital-only banks taking on incumbent brick-and-mortar banks is not a one-off moment. It’s merely the starting point for a world where business models will blur, online and offline channels will continue to complement each other, and customer solutions architecture will become an even stronger differentiator.

#FIS #onlinebanking #security #sibos #fintech #sponsoredpost

For more FIS insights, visit: https://www.fisglobal.com/insights

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