Invisible banking is the future of the finance industry. Here’s how to take a customer-centered approach without losing the brand element, by embedding yourself in the customer journey.
With the latest innovations in the finance industry and many banks and financial institutions undergoing digital transformation, the approach is often focused on and driven by technology. The technological advances of the past years allow for a renewed customer experience, but customer-centred design does not mean technology should be front and center. It means the opposite.
“Nobody wakes up in the morning and thinks ‘I want to do banking’.” — Piyush Gupta, CEO of DBS Bank
Understand customer needs and focus on them
Banking isn’t joyful. Financial institutions need to make efforts to make banking invisible and how banks can productize their services to better embed themselves in a customer journey.
Banks and financial institutions need to find a way to address customer needs by adjusting their offerings. Customers have goals to accomplish and oftentimes the financial products are merely the means to an end. People want to buy houses or cars, but they are not shopping for a mortgage or a car loan. What really drives innovation is the realisation that banking is only a small slice of the journey that gets the customer what he wants. Their lives do not revolve around banking, rather we need to consider how institutions can support and empower people along the way.
People want the hole, not the drill.
The financial services that banks offer are a tool to support customers on their own individual journey. Understanding this will allow to shift the focus away from the financial services themselves, but instead offering customers the way of life that comes with it.
Often companies try to sell the drill.But what people really want is the hole.People don’t want a mortgage, they want a house.They don’t want an investor, they want the profits.Customers are not looking for an insurance policy.They just want to be safe.
Say a customer is on the market for a house. Financing the house is only a small part of the decision making process that he will have to go through. The customer will go out appointing a realtor, looking at various houses. Only after six months in, when things are becoming serious, they will start looking around for mortgages. At which point the mortgage with the best price becomes the most attractive.
What if banks could engage with the customer six months earlier, implementing their mortgage as a part of the home buying experience?
Context is key — customer first
Understanding the context of your users is key. The technological advances of today’s age allow for a transformed customer experience, especially in Mobile banking.
The access to a user’s recent transactions and automated categories or even a GEO location thanks to GPS tracking allows for new ways to address users and come to meet their needs along the way. For some products, there is a certain context in which they make sense. Thanks to technological advances today’s financial institutions and banks can make tailored offerings, like offering travel insurance to customers who have recently booked a holiday or are already abroad. This not only improves your chances of selling said insurance, but it also adds to the experience on the customer’s end.
Taking a customer-first approach means thinking about what your customer needs. Technology is an opportunity to improve the banking experience. In the future, a key focus of financial institutions should be to build partnerships that can drive an improved customer experience when e.g. buying a house, dealing with loss or making a purchase.
Invisible banking also happens in many of today’s digitalized services. Call an uber, take the ride, leave. The payment has already been taken care of in the background. The same thing goes for iTunes, Lyft, MyTaxi and so on. This approach removes a lot of the pain and friction on the customers end. The overall experience becomes more seamless.
Is banking becoming a utility?
While invisible banking is an improvement for customers, it also means that banks as a payment solution provider become more and more commoditised. For a financial institution to really stand out today, where do we draw the line between seamless customer experiences and a strong brand?
Banks are losing brand awareness and becoming invisible as consumers can access financial services without knowing the brand. — Martin Häring, Forbes
What banks need to realize is that ownership over a product, service or customer relationship is not a prerequisite for commercial success. By putting the customer experience first, the branding aspect will generally fall behind. This can however play a major role in an institutions long-term success.
With many industries undergoing changes and the societal shifts of recent years, the biggest risk facing financial institutions and banks is that of inaction. While their expertise in risk management and regulatory compliance remains unmatched, they should acknowledge the advantage that upcoming FinTech counterparts have in knowing how to get the customer’s attention. Banks need to find ways to expand their reach and deepen customer relationships by utilising and ultimately benefiting from the innovation taking place right now.
Banks need to become more than just banks
Banks should be doing the same. Empower customers along the way by creating a strong backbone product that allows customers to do what they actually want. A banks branding should not be about the banking processes behind —those are merely the prerequisits for being considered a bank. In order to adress customer’s today, banking needs to be transformed into a lifestyle product.
More and more digital service prodivers are incorporating blog-themed feeds in their core products. This comes from the realisation that customer’s are not interested in the service itself, for example hire-purchases, but what they really care about are the possibilities that unfold if they can access said service.
You need to support your customers in what they want to do. Thanks to intelligent and automated solutions that today’s technologies allow for, your customer will feel taken care of. It’s the subtlety of a well-implemented AI assistance or the convenience of an intuitive UX design that matters to them, not the fancy feature itself.
After all, there is a huge need for banking in today’s age. Banks just need to understand their customers better and address them in a refined way. This does not necessarily need to mean that banks need to re-invent the wheel, but the societal shift we are experiencing calls for banks to think about strategies to reach a new wave of potential customers.
We are eager to engage with you and inform you about new opportunities in consulting, marketing and user experience or the digitalisation of internal processes in the long-term. We will gladly consult you on strategies to transform traditional financial products to every day tools that your customers will love.
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