When you walk into a bank’s physical branch, how many millennials can you seen swarming the counters? Probably none. Gen Y is also becoming an endangered species in traditional financial outlets. These tech-savvy customers tend to gravitate towards mobile and phone applications for most of their banking needs. So, it is time to look towards a mobile-first experience for most functions.
Most financial institutions are struggling to keep up with the sudden change in consumer expectations – falling behind in catering to last-mile needs of consumers, despite technological advancements and customer service outsourcing. Challenger banks and fintech firms are filling in the gaps with their avant-garde products like better payment gateways and biometric verification.
According to a report titled World Retail Banking Report (WRBR) from Capgemini and Efma, the top reasons why Gen Y clients prefer non-traditional financial players is because of lower costs, ease of use, and faster service. 75% of customers comfortable with technology, use at least one product from a Big Tech firm like Facebook or Apple, the study says.
Although banks are trying hard to enhance consumer experience through adoption of newer technology, open sharing of data with other financial firms, and outsourced customer service partners, it is not sufficient at the present stage.
Finding X: Collaborative Experiences
While open banking initiatives that espouse data sharing can drive superior consumer experiences and better integration with third-party product providers or outsourced customer services, adoption and effectiveness are still low. On the one hand, banks feel that sharing data might result in compromised edginess, while on the other hand, consumers are still resistant to data sharing over privacy concerns.
But the time for resistance is now over. If banks do not tweak their strategy from competition or even cooperation to collaboration, they will risk becoming redundant in the new era.
While internal innovation may seem critical, traditional players might be left behind if they focus too much on independent innovation. Instead, banks need to break free from existing silos and a product-focused approach to give consumers the experience that they desire – a frictionless process across physical and virtual channels. This will only be possible when they partner with FinTech and industry experts to adopt latest technology.
This new phase of Open X will help these institutions make giant leaps forward with consumers. At present, only 27% of banks surveyed in the report said that they found it easy to onboard FinTech partners. A structured process for collaboration, through open innovation, evaluation of shared strengths, and more efforts for acclimatizing diverse practices and cultures, can make the process easier.
Finding X: Tailored Journeys
Apart from collaborations, tailored journeys for different consumer experiences, one-step biometric authentication for clearing payments, and better transparency can further up the game.
Changing the approach to technology could also pave the path for mainstream crypto alliances that can help bridge the gap between fiat currencies and cryptocurrencies in the future.
Get on the bus
Open X will clearly be the driving force of the industry in future. Banks that miss the bus will suffer lower market share and lost customers. To remain relevant, traditional banks need to prioritize experience at popular touchpoints across all digital channels, and improve their payments, cards, and online banking systems.