What Can Retail Banks Learn from COVID-19?
As an essential and stabilizing force in our economy, retail banks have a big role to play in sustaining our new normal. However, the industry is undergoing some big shifts of its own.
The repercussions of nationwide shelter in place orders will undoubtedly have lasting effects on retail banking. In some ways, our present circumstances have accelerated the progression down a road many were already on, but the impromptu shift to digital has highlighted rifts in service that could shape industry practices for years to come.
We took a moment to consider some of the more profound opportunities, and gaps, that the pandemic has revealed and started thinking about how the financial services industry at large could look at this moment as an incubator for a better service model.
In particular, we‘re thinking about how organizations have kept pace with two things:
- The operational transitions required in a world where in-person contact is prohibited.
- What are they doing to maintain their quality of service and tailor offerings with this sudden emphasis on the digital experience?
Below, we’ve compiled some key learnings that we’ve observed in the industry’s response to an unprecedented shift (shove?) toward online banking.
A Greater Need for Customer Centricity
Necessity is the mother of invention, and there’s been no time more urgent than now for creating innovative ways to connect with customers and make them feel at ease.
The phrase “know the customer” has been uttered primarily for marketing buzz or has been lumped into the compliance bucket and relegated to an “if/then” action focused on grouping customers by preference.
In the wake of the loss of in-person baking, actually knowing your customer and actioning that knowledge is a high-premium asset. Their preferences and history with you are positive differentiators that can be used to offer more anticipatory service.
Retail banks have all the information they need to provide critical information that extends beyond simple transactions.
For example, consider the confusing labyrinth of the emergency small business loan programs made available by Congress. What’s a more perfect way to show your small business customers that you have their best interests in mind than by sending them a breakdown of how the CARES Act affects them? Or better yet, an email or SMS notifying them the moment the applications are open?
Increasing credit lines, waiving late fees, and making forbearance plans available are expected. It’s what many are doing. Providing thoughtful, personalized service, on the other hand, is hard to come by.
Get Bespoke or Go for Broke
Continuing that thought, organizations have the opportunity to create serious trust and loyalty by addressing the financial anxiety and uncertainty consumers may be feeling by providing tailored education, advice, and guidance.
Beyond the generic email notifying people of how those few branches that remain open are practicing social distancing, imagine sending communications crafted from the use of technology that predicts and monitors individual customers’ needs. From there, organizations could be more proactive in their offerings. Tailoring what you know about someone to what they need provides an all but limitless ability to ensure you’re giving the right advice and support all of the time, not just when they’re in front of you.
Up until now, most of the digital banking interactions consumers avail themselves of have been transactional (account balance inquiries, funds transfers, mobile deposits, online loans, or credit card applications, etc.). Even in these small and straightforward scenarios retail banks with an online presence have seen surprising impacts on cost savings, serviceability, and customer retention.
Branches may be closed due to government order right now, but they’ve seen a steady decline in foot traffic for a while now. As branch visits continue to decrease, so do opportunities to engage customers in immediate and meaningful ways. Those organizations with a strong digital presence will be best positioned to maintain in-person magic because they’re already figuring out how to maximize customer data in lieu of physical proximity.
If it works for Medicine it Works for Money
The obvious shift here will be a move to on-demand chat, voice, and video-based services on top of the digital self-services many already offer. This will introduce a new hybrid operating model that affords consumers even more choices.
Other industries like healthcare, for example, are already offering this style of blended in-person and online availability. And why not? The flexibility remote dynamic offers can be translated into money management scenarios for similar positive gains.
It might look like this: Instead of having bankers & tellers waiting at their desks for customers to walk through the door, you could have all kinds of specialists on-hand to advise people on-demand using webchat, SMS, or another digital channel to make seamless connections as they’re needed. Industries like healthcare, also a slow-moving behemoth that’s equally risk-averse and oftentimes reluctant to change, have seen great results from offering services just like this.
As with personalization, telefinance can be a big cost-saver that lets organizations provide convenience when executed properly.
The silver lining here lies in how the pandemic has afforded organizations new ways to discover and fill customer needs.
Observing these learnings and walking through the doors they open will allow firms to fill the growing gap in how customers are served in banking compared to other industries like retail.
Business continuity plans have been the true litmus separating those that are customer-centric and future-focused from those whose customer experience was perhaps, to begin with, a bit long in the tooth.
Ultimately, how organizations have responded is a window into the financial service industry’s ability to look ahead and adapt to a society that is growing ever more self-reliant and accustomed to a virtual world.
When we do return to the actual world, this will still be a good thing.
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