For banks and lenders, the competitive landscape has been forever altered. It’s now tougher than ever and continues to evolve rapidly.
Shifting Consumer Preferences
We see digital disrupters aggressively attacking the banking space, delivering customer experiences just like Amazon, Apple, and Google. They have learned quickly how to cater to the digital needs and wants of consumers, and are making headway, particularly among the prized younger demographics.
A recent special report from the non-profit Bank Administration Institute (BAI) indicates that more than half (57%) of consumers would consider banking with nontraditional financial organizations. Further, by 2024, customers expect 61% of their banking business to be fully digital and only 39% human-assisted, with the biggest projected increases coming from mobile and ATM usage. At the top of consumers’ wish list is improvement in the omnichannel experience with their financial institutions, driving a more satisfying customer experience (CX) overall.
Surveying the Banking Experience Competitive Playing Field
These statistics and others from BAI have given bankers pause, caused them to look in the mirror, and they don’t like what they see. Only 9% judge their digital experiences as excellent, and the majority (55%) admit that their digital CX is merely average or below average.
Online-only banks, unencumbered by the overhead and expense of “brick and mortar” operations, can now make compelling, competitive offers with enviable ease and still maintain their profitability.
What has the competition done that has allowed them to rapidly gain a foothold in the market? The following factors are often cited as non-traditional entrants’ key competitive advantages:
These brands have huge volumes of data about their customers’ habits and desires, allowing them to cross-sell and upsell financial services to those established customers.
- They have a mindset aimed at making the CX straightforward, including state-of-the-art digital apps and compelling, 24/7 online presences; and,
- They provide a personalized experience across every channel, at every turn, by leveraging that customer information, knowledge, and behavioral analysis.
Banks Still Have Advantages
The good news is that banks and bankers have some very important assets to bring to the competitive battle:
- Banks still have a reservoir of goodwill with their customers. In an earlier BAI survey, 95% of consumers report that “their attitude toward their primary financial services organization is the same or better” than at the onset of the pandemic.
- Many bank customers (nearly two-thirds) view brick-and-mortar locations as the safest way to do their banking, when it comes to depositing and withdrawing funds.
This means that banks have a leg up with the physical and in-person aspects of that desirable omnichannel experience – the key now is to get their digital experience in order.
What’s a Banker to Do?
If banks can offer a stellar customer experience (CX), online and in person, they have a window of time to react to market forces and emerge stronger than ever.
The biggest gains involve increasing the proportion of business that consumers of all demographics are able to transact digitally, driving new revenue while servicing that revenue at lower costs, and allowing them to beat the newcomers at their own game.
Personalization is Key to Banking Customer Experience Success
Every customer views himself/herself as a “market of one”, with unique needs and desires for the future, and an expectation that the bank will treat them as unique individuals. Banking personalization is a key to driving customer experience.
Nowhere is this truer than in lending, and its attendant pricing decisions. The outcome of pricing exercises is a major driver of customer satisfaction, the opportunity for repeat business, cross-selling other products and services, word-of-mouth recommendations, online reviews, and growing the business over time.
Failure to meet customers’ speed and responsiveness expectations when it comes to pricing severely jeopardizes CX, giving consumers time to explore competitive alternatives, and putting the bank’s growth objectives at risk.
Advanced Analytics are Key to Personalization
Many banks’ lending and pricing techniques remain stuck in the 20th century. Algorithms that rely too much on human intervention and fail to anticipate consumer behavior with the speed and accuracy that a world-class banking CX demands. From an organizational standpoint, they also lack the flexibility and agility that 21st century business requires.
As you look to upgrade your capabilities and gain a competitive advantage, Earnix is the solution that brings all of the following to the table:
- Analytics that employ artificial intelligence (AI) and machine learning (ML), to speed decisioning and adapt more readily to changing conditions in the market. This will guarantee presenting the right price, automated personalization, and attractive deal structures to customers and prospects;
- A cloud-native, SaaS-deployed solution that is much more scalable and agile than the patchwork of disconnected technologies you’re likely wrestling with today. The SaaS banking software deployment option also yields quicker implementations and faster time to value; and,
- A single, comprehensive, enterprise-wide technology solution that ties together all the functions of the bank, and not only delivers faster, more accurate and personalized pricing, but also better governance and reduced risk. Full reporting and auditability are key in this respect.
Banks have advantages they can use against their upstart competitors. Adding a superior customer experience, in-person and online, to the reservoir of goodwill they’ve built with their customers is a winning combination. Using Earnix’s pricing software solution, you can create unmatched customer experiences with unique, personalized and perfectly-priced offers in real time.
With new approaches and leading-edge technology, banks and lenders can deliver the omnichannel customer experience (CX) that consumers demand.
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