The Customer Effect

How banks are adapting to a digital-first customer

  • The bank of the future will be more of a data-driven curated experience that will zero in on customer needs
  • As branches change and digital-only platforms grow, banks and financial startups are looking to new ways to grow a sense of community and trust among customers
close

Email a Friend

How banks are adapting to a digital-first customer
Google, Amazon and Uber have raised customer expectations, and they're demanding the same level of service from other providers. Banks are rushing to innovate quickly while updating legacy technology and business processes. Meanwhile, financial startups are increasingly looking like banks, with branchless digital finance startups capturing market share and building loyalty with younger customers. Questions around user experience, design and the relevance of brick-and-mortar branches were key themes discussed at Tearsheet’s Bank of the Future forum in New York on June 21. Here are five things we learned. Don't let the perfect be the enemy of the good Understanding the customer is as much as about researching them as letting them try things and building their feedback into the product. “Done is better than perfect -- the notion of being perfect needs to go. Do something well enough to get in the hands of customers so they can react and give feedback,” said Matt Gromada, chief product owner for Finn, JPMorgan Chase’s digital banking product currently in beta. Banking in the future will be data-driven and personalized, regardless of whether it's digital-only or at a physical branch Instead of focusing on one-time transactions, the bank of the future will provide an experience based on what it knows about the customer’s financial data. The challenge is to personalize the experience without being intrusive. “We have a lot of [customer] data, but we don’t want to be creepy,” said Wesley Wright, chief operating officer at Varo Money. When customers are dealing with something as personal as money, many want a human touch As digital-only banking models become more common, customers still want the human element. For Purepoint Financial, community involves offering digital services but letting customers meet with bankers in a relaxed, open setting. For digital-only financial providers like MoneyLion, the notion of community comes through customers who vouch for their friends by recognizing positive financial behavior like paying down debt. Other digital financial providers like SoFi give customers ways to connect with each other to discuss tough financial situations, either in person or on Facebook discussion forums. “On our Facebook community, some [posts] will talk about, ‘Hey, I’m going through a divorce and this is my financial situation,” said SoFi vp of design Faith Bollinger. “There’s a lot of feedback and emotional support and there’s always this positive and trusted element of [the] advice around this idea that [customers] share a similar value set.” Digital banking platforms are becoming comprehensive bundles of services, in-house or with partners Many fintech platforms that began as single-product offerings are increasingly adding products and services similar to what traditional banks offer -- a “rebundling” of the bank, said BankMobile co-founder and chief strategy officer Luvleen Sidhu. The challenge is to keep your product unique when other rivals are doing the same thing. As digital-only banks evolve, there will be greater differentiation in products and user experience, predicted N26 U.S. CEO Nicholas Kopp. There’s a lot of talk about millennials, but it’s time to look at Gen Z Financial services companies are trying to reach millennials, but these customers may start to emulate their parents as they get older, said Eric Byunn, partner at Centana Growth Partners. Banks should pay attention to digital-native Gen Z, whose lives will increasingly be shaped by new forces in finance like crypto and augmented reality, said Current CEO Stuart Sopp. Customers’ shopping habits will be increasingly affected by influencers, which will have follow-on effects in financial services.

0 comments on “How banks are adapting to a digital-first customer”

The Customer Effect

How are consumer habits and spending changing due to economic turbulence?

  • Economic turbulence is changing consumer spending.
  • 66% of people say that the current economic situation is making them reconsider how much they put aside for their emergency fund, while others are pushing away travel plans and dipping into their 401k.
Rabab Ahsan | April 27, 2023
The Customer Effect

22% of Americans think ‘net worth’ only applies to wealthy people

  • American consumers are more aware of celebrity net worth than their own.
  • Younger consumers, those heading towards retirement, and women are the most likely to not keep track of their net worth.
Rabab Ahsan | April 20, 2023
The Customer Effect

Trouble in paradise: How layoffs are affecting consumer relationships

  • The recent wave of layoffs is impacting consumers’ relationships.
  • 80% of those who were laid off themselves would consider leaving their spouse if they got laid off, too.
Rabab Ahsan | April 14, 2023
The Customer Effect

Quick Take: Scrutinizing the impact of inflation on consumers’ finances

  • Troubles in finance paradise continue. With passing months these anxieties have been growing and are reflected in other parts of customers’ financial habits as well.
  • With rising inflation, how are increasing rents, embedded finance, & layoffs affecting consumers' financial anxieties?
Rabab Ahsan | April 05, 2023
The Customer Effect

The White House is proposing an increase in the capital gains tax. What will non-white groups gain?

  • The White House is proposing a hike in capital gains tax as part of a deficit reduction plan.
  • The taxation system in America needs another look, so far the balance has been tipped in the favor of investors and white households. Will the capital gains tax rebalance the scales?
Rabab Ahsan | March 15, 2023
More Articles