Differentiation in a Digital World – the right channel at the right time for the right customer

There is no doubt that the last two years have upended consumer behaviours. One of the most impacted behaviours has been in the digital sphere. Of course, the human race has been travelling towards a digital-first environment for decades now – the term “digital native’ has even been coined to describe those born into a world surrounded by digital devices. However, the pandemic arrived and gave us a heightened reliance and comfort with digital servicing.?

RFI Global's Digital Banking Council surveys 16,000 consumers across 10 countries. It indicates that 7 in 10 consumers are now banking digitally at least once per week and nearly half (44%) of all mobile banking users began using the channel in the last two years.?

Striving to be digital-first??

Currently, both public and private organisations globally are turning their focus to meet this growing demand with an aim to provide digital-first capabilities. And yet, there are still so many examples of ‘misses’. Here are a few that have arisen in the last week either through my own experiences or those that I’ve been made aware of….

1. A digital-only mortgage lender that is uncontactable other than via a chatbot that couldn’t answer the right question?
2. A new digital-first bank prompting customers to call the call centre between 9am and 5pm Monday to Friday?
3. A government tax agency sending a tax refund by cheque?
4. A traditional bank with in-app cheque deposit technology that won’t recognise the aforementioned Government agency’s cheque?

There’s still more to do?

I know that I am at risk of sounding like a whinger, but I serve these up as examples rather than axes to grind. The common theme throughout is that they collectively force the customer to use a channel that they don’t want to or didn’t choose as a first preference. Clearly there is more work to be done.?

Let’s have a look at what consumers think...??

When we observe findings from our recent Global Digital Council and ask consumers surveyed, to what extent they agree that “My main bank enables me to bank however I like”, the good news is that two thirds (66%) strongly agree. Now, I am a great believer in the phrase that there are two sides to every statistic and so, I will say that one in three customers disagree or don’t really agree.??

When I further observe the data that RFI Global collects, I am most interested in the global trends and the comparisons to be drawn across markets. I don’t want to fall into the trap of assuming that people in one country behave like those in another market - easily done in a world where we have not been able to travel and physically experience other countries for two years. So, in the spirit of comparison, I should say that the proportion that strongly agree ranges from as low as 40% in Hong Kong and 46% in Taiwan to 82% in the UAE and 86% in Mexico.??

Rising Fintech Usage

While we are seeing significant proportions of the population not agreeing that they can bank however they want, we’re also seeing a rise in the usage of fintechs and digital-only banks. The global average from our survey suggests that 54% have used a fintech. This is up 10% from pre-pandemic usage. Interestingly, Hong Kong stands out on this metric too, with a huge 87% usage and up by a whopping 30% from pre-pandemic levels.?

Bad Maths??

Putting two and two together and making five, you might assume that if consumers aren’t able to bank the way they want to and fintech usage is growing, that consumers must therefore want digital only services.??

But here’s the rub, when you ask consumers if they would drop the branch if they could do everything online or over the phone, about one in two (55%) would do so, with only 36% of the French agreeing that they would. Even in Hong Kong, only 75% agree.??

Source: RFI Global’s Global Digital Banking Council??

In addition, the average number of channels used in a typical month has increased (very slightly) in the last 2 years from 3.3. to 3.4. Furthermore, very few consumers (proportionally) describe themselves as digital-only in their banking channel usage. RFI Global’s data shows that globally, the proportion that only uses digital channels is about one in five (21%).?

Regular channel usage among consumers globally?

?Source: RFI Global’s, Global Digital Banking Council??

This begs the question, “why do consumers prefer one channel over another?” The answer to preference is nuanced and depends on the task being performed – whether it is complex, or requires in-person interaction, but there are some overarching themes.??

At the top of the list is security, which is related to trust. Do I believe as a consumer that if I use this channel, I will not be subject to a data/ security breach. Indeed, when we look at why certain consumers prefer a branch, we find ‘secure’ is at the top of the list, whereas for digital banking channels, secure comes in 5th for both online banking and mobile.??

Why do consumers prefer different bank channels??

Source: RFI Global's, Global Digital Banking Council??

In a world where consumers are faced with significant fraud opportunism, we can’t downplay this security perception. Our global digital survey shows that:?

• 13% have been a victim of fraud?
• 22% know someone who has been a victim of fraud??
• 41% have received suspicious text messages?
• 45% have heard about fraud incidents in the media?

Channel preference is complex?

Understanding channel preference is not easy, but it is crucial to offering an optimal service. Are we comfortable that we are not pushing consumers down a channel that they don’t want to use, can’t use or feel uncomfortable using? That is the key question.??

There are a growing number of consumers that will choose digital-only channels. However, we shouldn’t ignore the swaths of customers who feel like they can’t bank the way they want to, or are happy using what some might consider inconvenient branches. On the flip side, if we set up an expectation that we are digital-first, then we should expect that consumers set a higher standard of the definition of an acceptable digital offering.??

Like everything, it requires a balance. Ultimately, it seems customers are saying “don’t force me online if I don’t feel secure.” Leaving many to rethink their approach and ensure that, should this be their offering - the digital experience should not only be optimal, but second to none.??

To learn more about?RFI Global, and discover the latest insights from our Digital Banking Council, reach out to?[email protected].