You’ll see why banks and credit unions fail billions of dollars in digital transformation initiatives through the 11 commandments we’ve compiled.
Digital Banking Commandments — practical, specific, and often unconventional rules for digital transformation in the financial services industry — were distilled from the e-book The 11 Commandments of Digital Banking by Fico.
These practical, specific and often unconventional rules for digital transformation in financial services distill some painful lessons into quick real world advice. By Darryl Knopp, Senior Director at FICO
A harsh digital reality.
The fact is that popular knowledge will not bring you where you need to go as dependably as educated wisdom would. It comes through trial and error, as well as seeing personally what works and what doesn’t. Learning wisdom takes time and sometimes is difficult.
You Can’t Ignore These 11 Digital Banking Commandments A Painful Digital Reality
1. Lift-and-Shift Digital Isn’t a Strategy
Digital transformation should be viewed as a chance to create something entirely new. It entails implementing cutting-edge platforms and software to improve your banking experience across all channels. You can’t just transfer analog assumptions or digitize a paper-based process. Take advantage of this opportunity to completely rethink things.
You can’t just digitize a legacy paper process based on analog assumptions. Take advantage of this opportunity to start over.
Consider the procedure for creating a digital account. Why is a form required? Instead, how about an interactive chat with a virtual assistant? By responding in context, you can collect relevant information while also making the conversation enjoyable and personable.
2. Friction is neither good nor bad.
Customer experience friction that is unintentional is always bad.
Friction points, on the other hand, can be extremely useful in risk management and can even make people feel safe. This entails using data analysis to determine the appropriate level of friction based on the risk level.
Small changes to the user interface (such as real-time address lookup) can have a significant impact on the customer experience.
Although there is little risk of fraud from an incorrect customer address, verifying it or forcing customers to retype their address adds unnecessary friction to the process.
Instead of having customers manually enter each piece of information, streamline the data entry process by providing real-time suggestions, which reduces errors.
Keep these three guidelines in mind.
Assume that customers are impatient and will abandon your site if you keep them waiting; save them time by importing data and using pre-fill options whenever possible.
Existing customers expect and deserve VIP treatment, while prospective customers expect and deserve it.
Compare yourself to the best-in-class digital experiences and your peers (such as Amazon, Apple, Uber, etc.).
3. In this impersonal channel, be pleasant.
Personalization is about making customers feel at ease and valued in every interaction they have with you, not about selling products. You already have enough customer data as a financial institution to make minor adjustments that will improve the customer experience.
Make customers feel like they’re making a good decision by downloading your app by being enthusiastic.
Say hello using location data. Alternatively, “Good afternoon!” depending on the customer’s time zone.
A prominent personalization is the digital equivalent of a cashier greeting you with a large sign and a smile as you enter the branch.
4. Pay attention to the data.
Customers provide you with a lot of information. Respect their willingness to share their information with you by putting it to good use.
Engagement is increased by combining multiple accounts into a single view and sharing information with customers. Yes, pulling data from various silos for an integrated view requires effort, but it is well worth the effort and cost. Re-evaluate the UX regularly to add new features and meet higher customer expectations.
Yes, pulling data from various silos for an integrated view takes time and effort, but it is well worth the effort and cost. Reevaluate the UX on a regular basis to add new features and meet higher customer expectations.
Pay customers for their information:
The information that people share with you, both explicitly and implicitly, is a valuable asset. Demonstrate to customers that you value it and are using it to provide them with value in return.
5. Involve them, educate them, and feed their TikTok addiction.
Consumers want to be in charge of their finances. They want how-to content, but they have very high expectations. What lessons can financial institutions draw from TikTok? It has strict constraints that force you to create content that is quick, compelling, and simple to understand.
What can TikTok teach financial institutions? It has a set of strict requirements that force you to create content that is quick, compelling, and simple to comprehend.
It is difficult to create enjoyable financial services content, but support is critical. Videos should have a lot of movement and good visual examples to capture the attention of your audience – and don’t be afraid to add some music!
6. Use Your Branch Wisely.
In 2019, 83% of American households with bank accounts went to a branch at least once in the previous year.
This suggests that the branch’s role as a resource for resolving critical issues or seeking advice remains important, even as its role as a transaction center declines.
Do not switch the priorities:
Branches can be a differentiator if they are used to serve the goals of your customers rather than your own.
7. Pay attention to their time and effort.
Going “digital” does not imply streamlining interactions to the greatest extent possible. It is about optimizing each interaction so that the value received by the consumer is proportional to the time and effort invested.
When customers interact with your bank, use the data gleaned from that interaction to better understand them and provide personalized, actionable insights.
Begin with low-hanging fruit, focusing on opportunities that add value to customer interactions but don’t necessitate much additional work or expense on your part.
Providing actionable insights, such as your customer’s current credit score, is a simple way to add value to a routine interaction.
8. Pester Them… But only if they express an interest.
When it comes to money management, transparency and control are critical concepts.
Consumer harassment is defined very differently in financial services than it is in other industries. You can keep customers informed of important changes to their accounts by sending simple notifications.
People want to know what’s going on with their money.
They can feel in control if they communicate on time and through the appropriate channels.
Allow your customers to set notification limits to determine how frequently you communicate with them.
9. Be enthralled by your clients (Not Your Technology).
It’s easy to assume that your customers or members are as interested in your technology as you are. However, they do not.
Even the most advanced digital technology cannot compensate for an obsessive focus on and knowledge of your target customers.
Make technology investments to provide a better, more personalized experience for customers. Show that you understand who they are and what they want.
Don’t let your customer experience muscle sag – instead of explaining how or why focus on showing people that their experience has improved.
Keep these three rules in mind:
Make it a habit to constantly seek out customer needs and pain points.
Make sure you’re meeting your customers’ expectations, which change frequently and in unpredictable ways.
One size does not fit all or even the majority of people. Concentrate on a single segment.
10. Make people feel secure.
As previously stated, bank branches will never completely disappear, in part because they instill a sense of trust in many customers.
Remember this foundation:
At its most basic level, financial services confidence is about security. You must find digital ways to replicate this sense of comfort and security in all of your institution’s small digital interactions with customers.
Make use of digitalization to maintain your customers’ trust in your financial institution. (A little friction in the name of security may be helpful.) People bank with you because they have faith in you, and digitization should not change that.
11. Work as a Symphony Orchestra
Data, systems, and processes all work together like a finely tuned orchestra in the best digital transformations.
People can tell when a digital experience is disjointed because they can see the seams.
You must devote resources to integration and orchestration. Testing is necessary.
Concentrate on the details!
“Only those who have the patience to do simple things perfectly will be able to easily learn to do difficult things.” Friedrich von Schiller (Friedrich von Schiller)
FAQs: The 11 Commandments of Digital Banking
What are the 3 layers of the Digital Banking architecture?
The workplace, the customer journey, and open banking are the three layers.
What is the concept of Digital Banking?
All traditional banking products, processes, and activities are digitalized in order to serve customers through online channels. Any bank branch service is available and accessible 24/7 on mobile phones, computers, and compatible smart devices with digital banking.
Digital transformation is a never-ending process.
As new channels and devices emerge, people’s expectations change, new competitors emerge, and existing systems and processes age. Continuous reinvention, adaptation, and a willingness to try new things are required for success.
While the risks of a bad digital infrastructure investment remain, your financial institution must undergo this transformation sooner rather than later.
Fortunately, technological advancements are making it easier to digitize your operations in a way that supports your institution’s strategic goals, provides an exceptional experience for your clients, and boosts your bottom line, especially if you follow these guidelines.
Do you have any ideas about this? Tell us in the comment! DO TRUNG DUONG hopes you enjoy this post.
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