Customer expectations in a digital world with Deloitte’s Jonathan Valenti

In this podcast, I am joined by Jonathan Valenti, a principal with Deloitte Consulting, who leads an offering at Deloitte called Customer, Experience, and Marketing Strategy, particularly in the context of financial services.

Jon shares insights on evolving customer expectations, the importance of personalization, and the influence of experiences from other industries on financial services. We discuss the role of technology in meeting customer demands, including faster onboarding and the development of budgeting tools. 

Jon also highlights the growing emphasis on equity and inclusion in financial services, addressing how institutions are striving to represent diversity in leadership and design more accessible services. We conclude with a discussion on recent market events and the impact on customer strategies, including the need for diversification and partnerships within the industry.

This is part of a four part series we’re doing with Deloitte’s financial services leadership on the trends shaping our industry today and out into the future.

Here’s my conversation with Jonathan Valenti.

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The following excerpts were edited for clarity.

The focus

My role is really around driving customer behavior, and how companies can reach, engage, and build relationships with customers in ways that drive organic growth or greater loyalty and outcomes.

What financial services customers want

The majority of my work is in financial services, even though my role gives me a view into other industries, as well. I would definitely say that financial services has similar expectations to what you would expect in other industries, but there are some unique nuances. From an expectations standpoint, when you think about what you’re able to do now in retail or at Amazon, you get things like instant gratification, greater personalization, and recommendations.

There are certainly expectations that financial companies are subject to, as well. Especially when you have a long relationship with a bank or an insurance company, we all know how much data and information these companies have on us. So why aren’t you using it to our benefit? And that can be a mutual benefit in the form of a share of savings in the fact that I’m not visiting a bank. Or, I’ve been a customer of yours for 20 years, so how come I’m getting the same mortgage rate as someone next to me? 

Instant gratification and relationships

While you expect a certain amount around instant gratification, why does it take so long to open an account when you have all this information on me? Why can’t it be just one click? Why can’t I see the status of my loan and track it like a Domino’s Pizza tracker? 

Things like that are really top of mind for customers. That said, there is an appreciation that most customers have for the complexity of banking products and services. It’s a different relationship – it’s not as transactional. If banks are doing it right, as it would be for a retail company, you would expect a certain amount of advice and relationship. You’re looking for a two way relationship where you’re sharing your needs and expectations. But the bank or financial institution is also sharing lessons learned from other customers. 

Evolving expectations

Expectations continue to move. I would say that the banks that have kept up with technology and advancements in the States tend to be a lot of the bigger banks, who have benefited across multiple customer segments. Even younger customers are going towards the big banks, in many cases, in large part because they’re keeping up to date with their mobile apps, or they’re investing in budgeting tools. 

Customers are doing their research, or they’re looking at what’s available. The banks’ mindset is that they need to invest in these capabilities and continue to build and innovate – it’s all part of those expectations.

Focus on specific capabilities

There’s a big focus on faster onboarding, for example, or faster account opening. So, how do I require less clicks, or get the basic information quicker, so that we get you in the door and start giving you access to services?

How do we get you to invest more, use budgeting apps, or get insights, ways that they can bring a complete financial picture together, especially if you start to have multiple relationships, or you have multiple products with a particular bank? And even if not, they could start to help customers create a complete picture of their financial portfolio with institutions through aggregation and things of that nature. That’s a high priority, particularly for wealth companies.

Segmenting the customer base

Traditionally, you’d see a lot of banks segment based on a couple of variables: mostly age and investable assets. Part of that’s because it’s easy to understand. But there are a number of other attributes that companies are looking at to define unique propositions or to find more segments of growth. So, things like educational level – do you have a little bit of college or no college? Because that kind of dictates, in some sense, what your future earnings potential might be, but also generally your level of sophistication when it comes to financial products and needs and your household size. 

Your willingness to look at other products and services or other banking providers tends to grow or open up when you have one to two children – that’s a big event. So, there are different variables like that that companies start to look at. There’s a fair amount in terms of focusing on different areas like gender and race, in terms of how they’re looking at growth opportunities, and making sure that they’re being more inclusive in their design brand. 

And they have to be careful with that. Because of certain regulations, they can’t show favorability towards certain races. There are things like that, that they have to be mindful of, but looking at some of the unique needs around immigration status or migrants and how certain products and services should be evolved to fit those needs is another factor that a lot of banks are looking at to grow.

Challenges around better targeting

With a big diverse bank and you have a mortgage relationship and a retail banking relationship, but they haven’t created that single view of customer or invested in things like customer data platforms, it’s very hard for the banks to act and maintain that. But there are third party sources, as well. Believe it or not, a lot of web behavior and where you’ve been elsewhere, outside of the four walls of the websites, can be very predictive and give a lot away about you. Banks are using that to their advantage.

Equity and inclusion

DEI is definitely a priority for banks for a number of reasons. One, it’s important to the value systems of the segments that they want to attract. It’s also important just from a greater good, and how these financial companies contribute to the betterment of society. So it’s a focus on how they are tracking the mix of their customer bases, on how they are representing their leadership teams, and even having representation in the service staff and representatives of the bank. 

They’re doing it in a host of ways. One is the overall proposition. So you’ll look at how companies are emphasizing the benefits, or the types of businesses that the bank is supporting, like Black-owned small businesses or women-owned small businesses might be a big point of emphasis. You have the ability to donate or contribute to these types of businesses. I mentioned migrants earlier, features from a product standpoint, that might be very attractive to them, like discounts on international calling or money movement, cross border, not requiring a social security number, if you’re not a US citizen yet. 

So there are features like that within the overall proposition. And then just generally, in marketing and experience, what are ways that they’re doing things around inclusive design? Like the language options on a website, or even from a disability standpoint, designing around those that have disabilities and making their websites and mobile apps more accessible, like through voice and services like that.

Serving younger customers

Equity and inclusion are very important for younger customers – they are definitely looking at that now. Some of their needs and their expectations start to evolve a little bit more as their families grow and their financial needs become a bit more complex. I think the emphasis on society’s benefit versus my own starts to shift a bit with that. We’ve done a lot of research on what drives trust in financial institutions, and that humanity piece where you’re looking out for the greater good – things like sustainability and awareness of your environmental impact, how you’re driving inclusion, diversity, and equity is something that particularly Gen Z and younger customers are looking for.

Impact of recent market events

Most definitely we’ve seen an impact of market events on customer expectations. We’ve seen a number of activities post-market disruption we had early on in the year: the first is consumers’ greater diversification of financial institutions. So while there was some uptick in terms of the deposits going towards the bigger banks because of a sense of stability, we also saw a good deposit shift towards smaller local banks. Customers are pretty wary of a heavy concentration at a single institution and are more aware around things like the $250,000 deposit insurance limit. 

I think we’re seeing more of a shift towards taking advantage of current Treasury rates – funds going towards money market funds. Customers have become more aware of the options and there’s a willingness to shift the money around from a digital first perspective. It’s also about how banks take advantage of that shift or in market disruptions like that by making it very easy to apply. 

We’ve seen banks start to look at next generation banking platforms as a means to accelerate their onboarding and their account opening time so that when a small business does want to change, it can quickly onboard them and get the deposits in the door without having to make it too cumbersome.

Openness to partnerships

Banks are always looking for partnerships, whether that is through different credit bureaus or aggregators, and partnerships from a fintech perspective, whether it’s around acquiring different customers or getting access to those capabilities. Partnerships are a big focus. They are also key as far as how you’re broadening your brand towards certain communities that we mentioned before. So if there’s a brand or a fintech partnership that will give them access to some of the unique customer segments or micro segments that we talked about earlier, those are partnerships that financial institutions are very open to and looking to take advantage of.