Digital banking can be more than glorified self-service

Banking institutions needed to make big adjustments on the fly two years ago when the pandemic began, but now they should recognize that when it comes to digital engagement, the future will look a lot like the past year. .

Branches were already closing before the arrival of COVID-19. Assuming this trend continues, banks and credit unions should ask themselves how they will get to know their customers in the future, given the importance they have placed on face-to-face interaction over the last 100 years. They will have particular difficulty knowing the customers they have added since 2020, as many have not even set foot in a branch or met a bank employee in person.

Over the years, banks gradually realized that they needed to improve the customer experience through improved self-service. The ease of use of asynchronous transaction services like automatic bill payment, remote check entry, and direct deposit has allowed banks to offer a much more convenient way to interact with their customers. But “interact” is the wrong word, as it involves a certain amount of give and take. All the customer did was find and take, without the intervention of the bank.

In reality, banks have effectively disintermediated themselves with each new tool added to their mobile banking app and lost the ability to offer real-time advice.

Some of these services, like automatic bill payment and direct deposit, have made the customer relationship stronger. However, stickiness does not make a customer feel closer to their bank – this is particularly the case for younger consumers, as a recent BAI Banking Outlook report indicates. The customer can perform all but the most technical transactions on their phone at any time and, frankly, does not miss going to the branch in the least. But banks have not developed a similar delivery mechanism for advice, whether on loans, investments or small business needs.

We are currently witnessing a reversal. Where once bricks and mortar were essential and digital tools have been added to enhance that experience, banks must now view the digital experience as central to how they interact with their customers. Increasingly, consumers expect a rich online experience, especially one that includes advice, and only visit a branch for the most complex transactions, if at all.

Banks are to use their talented workforce through video chats with document sharing, combined with a back-end that allows the banker to gain insight into their customer using smart CRM technology. Not only would this closely approximate the experience that we as customers are used to getting at a branch, but we should now add the intuition of algorithms running in the background that capture the history of transactions and recognizing the language of previous conversations.

Combine that with the convenience of sharing, signing and electronically delivering documents on the same screen, plus the ability to chat with more than just the account at the same time – that could mean connecting with their adult children or their manager. financial. Now that everyone has embraced technology out of necessity during the pandemic, we have the opportunity to marry the best of both worlds – digital convenience with human interaction.

Recent research shows that although individuals are more likely to seek financial advice from friends and relatives, they are surprisingly willing to take it from banks when offered. This is the window through which banks must climb.

Just as American businesses were working from home using video technology to connect, banks must embrace video banking. If one were to look at other industries affected by the lack of face-to-face interaction, healthcare offers a good analogy. According to a McKinsey study, telehealth use has stabilized at nearly 40 times pre-pandemic levels after peaking at 78 times previous use at the height of the pandemic.

Rather than viewing digital banking as glorified self-service, banks need to embrace every technological tool at their disposal to rebuild a relationship with their customers through their phones.

Given the digital age we live in, this is the only way for banks to stay as close to their customers as when we used to lazily chat with a teller while depositing checks or having update our savings accounts.

Mike Sha is co-founder and CEO of SigFig.

About Miley Sawngett

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