The Customer Effect
Digital-only banks grapple with integrating ‘human’ interaction into their products
- Digital-only banks are creating as many human touch points as possible to foster customer comfort and trust
- The digital banking experience is moving toward a hybrid model -- digital-only services with options to escalate to humans based on customer needs
Digital-only banks cater to younger customers who don't want to talk to bankers at brick-and-mortar branches -- or bother visiting a branch at all. Or so they think.
Recent customer surveys indicate otherwise, according to research findings released this month from Celent, commissioned by Samsung. It revealed that customers want some kind of human interaction for complex issues. The study found that about half of U.S. banking customers aged 18 to 44 said they banked digitally, but prefer to resolve some matters in-person. Overall, most customers surveyed preferred dealing with humans on matters like setting up financial goals or getting investment advice. To respond to fraud, a lost or stolen card, or identity theft, a majority of those surveyed across age categories preferred to phone the contact center or address it in a physical branch.
Bob Meara, author of the Celent report, argues that it's a myth that customers' increasingly digital habits are a predictor of how they prefer to engage. Just because they bank digitally doesn't mean they won't talk to a human if that option is available to them. Indeed, many prefer to carry out certain types of finance-related tasks with the help of live agents. For example, 50 percent of consumers prefer to apply for a loan or deposit account in a physical branch, according to a PwC survey from earlier this month.
The solution: to recreate the branch network virtually to the greatest extent possible, aiming to offer digital-only customers the comfort larger institutions can through instant messaging or video conferences.
“Today’s customers absolutely want one-on-one, personalized assistance when it comes to their personal finances," said Gene Pranger, CEO of PoPin Video Banking Collaboration, a company that develops communications technologies for financial institutions. "With emerging channels like mobile video, however, banks and credit unions can finally create a branch-like experience from the convenience of personal devices, allowing financial representatives to video chat and collaborate with customers from the comfort of their homes, just as if they were across a desk."
Digital-only institutions are trying to differentiate by creating as "human centered" a digital experience as possible. Simple, an early pioneer in digital-only banking, offers a hybrid human-digital communication model where customers can interact online, speak to a human directly (not a phone tree) and connect via social media channels, spokeswoman Shauna Causey said.
Neobank Chime, which conducts all its operations digitally to cut down on overhead costs, cultivates a relationship with customers through real-time digital feedback.
"The traditional bank branch is dying -- for basic checking and savings accounts there isn't much need for a branch,", CEO Chris Britt said. "Sixty percent of Chime's customer service interactions are without an [in-person] human, either through our IVR system or our chatbot, that we've built in house."
U.K.-based digital bank Starling focuses on making the app as personal as possible to reduce the need to talk to a customer service representative, a spokesperson from the bank said. Its approach is to offer live help outside of the branch when the customer needs it.
"The ways of interacting with us are synonymous with a tech offering, so you can get help even if you have a problem at 3 a.m. on a weekend," co-founder Megan Caywood recently told Tearsheet.
Others are offering human advice on broader financial strategies. SoFi, which will roll out banking services later this year on top of loans and investments, is offering customers the option to contact staff members by phone to navigate complicated questions. It has personalized its mobile app to combine event planning, career services and personal finance insights, and is differentiating through in-person events on broader themes of interest to customers.
"We have gone much deeper by offering members complimentary access to certified financial planners for goal setting, big-picture thinking, and understanding more complex or nuanced financial questions at their leisure," said Tony Morosini, SoFi's vp of banking. "We also host a series of events for members on a range of topics, offering a chance to ask questions in person, too -- such as financial planning for couples, investing 101, career counseling or first-time home buying."
Bob Meara, author of the Celent report, argues that it's a myth that customers' increasingly digital habits are a predictor of how they prefer to engage. Just because they bank digitally doesn't mean they won't talk to a human if that option is available to them. Indeed, many prefer to carry out certain types of finance-related tasks with the help of live agents. For example, 50 percent of consumers prefer to apply for a loan or deposit account in a physical branch, according to a PwC survey from earlier this month.
The solution: to recreate the branch network virtually to the greatest extent possible, aiming to offer digital-only customers the comfort larger institutions can through instant messaging or video conferences.
“Today’s customers absolutely want one-on-one, personalized assistance when it comes to their personal finances," said Gene Pranger, CEO of PoPin Video Banking Collaboration, a company that develops communications technologies for financial institutions. "With emerging channels like mobile video, however, banks and credit unions can finally create a branch-like experience from the convenience of personal devices, allowing financial representatives to video chat and collaborate with customers from the comfort of their homes, just as if they were across a desk."
Digital-only institutions are trying to differentiate by creating as "human centered" a digital experience as possible. Simple, an early pioneer in digital-only banking, offers a hybrid human-digital communication model where customers can interact online, speak to a human directly (not a phone tree) and connect via social media channels, spokeswoman Shauna Causey said.
Neobank Chime, which conducts all its operations digitally to cut down on overhead costs, cultivates a relationship with customers through real-time digital feedback.
"The traditional bank branch is dying -- for basic checking and savings accounts there isn't much need for a branch,", CEO Chris Britt said. "Sixty percent of Chime's customer service interactions are without an [in-person] human, either through our IVR system or our chatbot, that we've built in house."
U.K.-based digital bank Starling focuses on making the app as personal as possible to reduce the need to talk to a customer service representative, a spokesperson from the bank said. Its approach is to offer live help outside of the branch when the customer needs it.
"The ways of interacting with us are synonymous with a tech offering, so you can get help even if you have a problem at 3 a.m. on a weekend," co-founder Megan Caywood recently told Tearsheet.
Others are offering human advice on broader financial strategies. SoFi, which will roll out banking services later this year on top of loans and investments, is offering customers the option to contact staff members by phone to navigate complicated questions. It has personalized its mobile app to combine event planning, career services and personal finance insights, and is differentiating through in-person events on broader themes of interest to customers.
"We have gone much deeper by offering members complimentary access to certified financial planners for goal setting, big-picture thinking, and understanding more complex or nuanced financial questions at their leisure," said Tony Morosini, SoFi's vp of banking. "We also host a series of events for members on a range of topics, offering a chance to ask questions in person, too -- such as financial planning for couples, investing 101, career counseling or first-time home buying."