Building Trust and Innovation through Digital Banking

With online and mobile banking continuing to make deep inroads into consumers’ lives, it is time for banks to rethink how they attract and retain customers. Creating relationships with digital customers is critical if banks want to differentiate their brands and boost loyalty.

Increasingly, banks can identify and mine a wealth of information about their customers - from social media and a variety of other digital sources - to make connections and draw insights that previously remained in silos or were unknown. By harnessing the power of digital channels, banks can move away from reactive, transaction-based customer relationships, towards a more personalized and proactive experience.

Taking a cue from the retail sector where the likes of Amazon, eBay and Starbucks have transformed digital customer experiences, financial institutions realize that if they fail to respond now, non-banking organizations will step in to own the customer experience. Indeed, innovative players such as Square, Google, Simple and Moven have already started offering financial services.

Five Golden Rules

There are five guiding principles of a “Digital First” strategy:

1. Anticipation - Anticipate customer needs and guide them to the relevant product or offers quickly. For example, the landing page should be able to recognize if a particular user is a new visitor or returning customer before serving content.

2. Insight - Leverage analytics, data mining and other technologies to understand customer preferences, thereby increasing the value of each customer interaction.

3. Connected - Provide a seamless experience (one interaction leading to another without interruption) across channels and devices so customers will feel positive about their digital experience with their respective banks.

4. Relevance - Deliver improved service to customers by developing digital applications that recognize contextual signals and engage customers accordingly. For instance, the bank’s locator application on a customer’s mobile device should recognize that he is abroad and provide information on the nearest ATM machines.

5. Available — Deepen the relationship with customers by giving them access to virtual relationship managers and other digital tools and services across all channels and devices.

Enabling Technology

There are several enabling technologies that will help a ‘Digital First’ strategy drive customer intimacy.

1. Digital Intelligence

Analytics can now encompass customer interactions across online, mobile and social channels. This is giving marketers the opportunity to understand how customers use their digital devices and integrate those insights to deliver compelling digital experiences. Leading organizations are already integrating their digital analytics data with existing traditional data sets from existing customer relationship management systems to create a new layer of digital intelligence and deliver even more personalized experiences to customers.

For example, U.K. customers with an American Express card can now sync their card account with their Foursquare account and take advantage of personalized offers, based on location and their spend patterns. This intelligence is fundamentally enabled by insights AmEx has developed from a rich customer profile, helping it deliver a relevant experience.

2. Post-login Experience

Experience has shown that over 90 percent of customers use their bank website to check their account balance or carry out specific transactions, and then they log off. The average online banking interaction is at best functional and transactional. But there is a great opportunity to transform the post-login experience into a dialogue.

The ‘customer dialogue engine’ uses context, relevance and data to create a conversation between customers and banks. By monitoring customer transactions and behavior, the dialogue engine can suggest tools for financial planning and budgeting, act as a virtual advisor, offer peer comparison on selected products or services, and much more. In effect, the customer dialogue engine gives banks valuable insights about a customer’s financial life to enrich the experience.

Bank of America launched BankAmeriDeals—an application that allows online customers to select a series of cash back deals at shops and restaurants in a secure environment. This service uses transaction history to attract customers’ attention and reward them for their loyalty.

3. Everywhere Banking

Increasingly, banks are integrating mobile banking services with other channel offerings to provide a multichannel customer experience and gain a competitive edge. For instance, Barclays’ innovative mobile payment service—Pingit— allows customers to use their mobile phone to send and receive money using just a phone number. Other niche players are using mobile as a service channel to initiate financial offers for loans and other products.

4. Digital Relationship Management

Banks can extend the traditional relationship management/teller model to provide superior service—key to driving deeper customer intimacy.

For example, BBVA, one of Spain’s largest banks—is breaking new ground by offering customers superior service through a virtual assistant application that guides its internet banking customers. The app builds customer intimacy by making personalized recommendations, much as a real bank assistant would, leading the customer through customized pages where the structure and displayed information is tailored to suit the customer needs.

5. Socially Engaging Banking

Leading organizations are already going beyond using social to merely gather insights; they are making it part of an integrated customer experience strategy across channels. New York City-based Moven, for example, is launching next generation banking services with social at its core. Combining traditional credit data with behavioral data and social influence the bank creates a customer credibility score. Based on that score, the bank provides feedback to customers on their financial performance and options they can consider.

Developing a ‘Digital First’ mindset is critical for banks seeking to significantly enhance customer satisfaction, build customer loyalty and deepen share of wallet.

Piercarlo Gera is global managing director of Accenture Distribution & Marketing Services and co-author of the recently published paper, “Banking on Digital: Building Trust and Innovation in Financial Services.” Wayne Busch is managing director of Accenture’s banking industry practice in North America.