Post-Pandemic Banking: Exploring the Digital Experience Gaps

Banks closed a record 3,324 branches nationwide in 2020, according to S&P Global Market Intelligence data, with expected acceleration of branch closures to continue through 2021.

“Now more than ever, banks and credit unions need to reset their customer experience agenda to meet the needs of consumers who have adjusted their lives as a result of the pandemic. Not only have consumers moved in vast numbers, across all demographic segments, to digital channel use, but they expect organizations to leverage data and insights to provide better solutions that are personalized to their specific needs,” according to Jim Marous, co-publisher of the Financial Brand.

With pandemic restrictions on in-person branches, a majority of regional banks and credit unions scrambled to provide access to virtually all financial services via digital channels - from account opening and loan applications to servicing and sales. And while the ability to bank through digital channels was possible, consumers felt the pain as their digital banking expectations fell far short of optimal. Once consumers feel enough pain, they’ll do anything to relieve it.

Experience Gaps

Despite being vocal about improving their customer’s experience, and the acceleration of digital brought on by the pandemic, a vast majority of banks are still falling short of customer expectations, according to The World Banking Report. The delivery of key components of a strong customer experience are often lacking. This includes transparency and social responsibility, improving customer support, reducing the cost of service, and providing end-to-end, seamless experiences for new account openings and customer onboarding. The result is misalignment between the bank’s goals and those of its customers.

Misaligning expectations can be detrimental to your brand and the wellbeing of your financial institution. Shifting from a product-centric paradigm to a customer-centric experience can be challenging. It requires actively listening to and having empathy for your consumers, distilling and organizing data, and organizing in-depth research and analysis. All of which are paramount to a truly successful digital experience. Surprisingly, this is an area where many organizations spend too little time, resources, planning, and budget. Hitting the mark at this stage is imperative to future success.

End-to-End Gaps

Phase2 is often called on to create world-class, frontend digital experiences for financial institutions. But we’ve found that the customer journey considerations often stop there. For example, a customer fills out a loan or checking account form, submits it, and poof, they’re often redirected to a completely different process, interface, and digital experience. Closing this journey gap and creating harmony throughout the onboarding process and beyond, would be a significant improvement for most banks-- especially as Gen Z and Millennial numbers grow in the personal banking segments. These groups  expect convenience, instant gratification, and ease of use. Seventy-three percent of Millennials report that they would rather have digital experiences with their banks than personal ones. And 52% consider a brand’s use of technology before making a purchase, according to a 2019 Annalect survey.

Technology Gaps

Post-pandemic, consumer expectations have risen with advancements in open technology (API-first frameworks), data and analytics, and artificial intelligence. Fintech firms are fully embracing technology advancements to work smarter, faster, more efficiently, and more deliberately, to build fully integrated, customer-centric platforms. Meanwhile, many traditional banks are struggling to untangle their antiquated, and often siloed, legacy systems that have plagued their institutions for more than a decade. And while consumers may not see the disarray of legacy systems powering their experience, they can certainly feel the pain of disjointed, slow, and often fractured experiences, as they move from frontend to backend systems.

Bank employees also feel the pain. Their monolithic, and often closed platform architectures create daily challenges, including:

• Greater effort to maintain-- resulting in increased support team size and ongoing costs
• Increased time and challenges distributing content across channels
• Inability to properly aggregate data from multiple sources

What Does All This Mean?

The pandemic has accelerated change in the way humans bank. Traditional banks and credit unions with digital experience gaps, are misaligned with their customer’s expectations. Those with platform deficiencies are losing customers to better experiences and alternative banking solutions. Most banks, credit unions, and other financial institutions are quickly re-thinking their business and digital strategies but many are missing the mark. This opens doors for national competitors, fintechs, and digital-only alternatives, to rapidly take market share by offering convenience, ease of use, and personalized approaches to banking.

Transitioning from a product-focus to customer-centric approach has proven challenging for many financial institutions. Experience is the future of digital banking. And the future is now.

We hope you enjoyed reading the Phase2 blog! Please subscribe below for regular updates and industry insights.