Innovative digital banking solutions will attract and retain customers

  • Keith Rowling, Managing Director UK & Ireland at First Data Corporation

  • 11.11.2015 00:00 am
  • undisclosed

Recently, we launched ‘The Digital Agenda’ to help our clients transform their customers’ experience by delivering innovative digital solutions. By doing so, we believe banks can make it easier and more compelling for customers to adopt their products and services, and ultimately, will make more profit in the long run.

In order to put our theory to the test, we surveyed consumers to gauge their thoughts on digital banking services. Our study, conducted via YouGov, questioned over 2,000 people and revealed that 32% of retail banking customers feel that their mobile banking app does not perform as well as their online banking through a browser. This isn’t particularly illuminating in itself, yet smartphones are fast becoming the UK user’s number one device for browsing the internet and using social media, according to Ofcom. Therefore it’s clear that the mobile experience must be up to scratch. Conversely, more than half (58%) of the people surveyed have never used a mobile banking app. This is surprising, and indicates that the in-app experience is not fulfilling customers’ banking needs.

Of the people that already use banking apps, most are using them to check their balance (89%), view transaction history (75%), transfer money between accounts (61%) and to pay someone they know (55%). The way apps are being used at the moment is not particularly surprising, since they are making use of the very basic of functions. But what’s not being recognised by many banks is that people that use mobile banking apps want to see further, richer features made available in-app, such as the ability to see direct debits (62%), the ability to set up new payments (60%) and the ability to see full transaction history (57%).

As well as functionality, we asked consumers about their attitudes to digital banking and how they would react initially to seeing a transaction on their account that they didn’t recognise; over half (51%) of respondents said their first reaction would be to phone their bank rather than investigate online. Whilst 25% said identifying the transaction themselves would be most important to them. 50% of respondents said the most important thing to them would be to identify the transaction, followed by suspending their card (19%). This all points towards the potential that customers could easily manage unrecognised transactions via a digital process, as long as it responds to both their functional and emotional needs.

This data points to the fact that there is a new kind of digitally savvy customer that the banks now need to cater for. This customer profile will only become more prevalent in future as millennials become the primary retail banking consumer. Customers already believe that additional digital features would be beneficial in resolving transaction discrepancies, such as providing further information on the transaction (28%) or having an instant messenger chat with the bank (24%). This new type of banking customer is open to transformations in their banking experience that make the service more transparent, secure and saves them time.

Credit management is another, overlooked element, of financial services that is also ripe for digital innovation. Less than a third (28%) of those who have ever carried over an outstanding balance on their credit card for three or more months, said they felt supported by their credit card provider to help pay off their outstanding balance more quickly. It is interesting to see that most respondents (59%) managed repayments on their own, and prefer to do so (77%). We can deduce from this that enabling and empowering customers to plan and manage paying off their balance digitally would benefit both parties.

Implementing innovative digital solutions into the online and in-app retail banking experience, empowers the digitally savvy customer who wants more control over their financial affairs. Customers are communicating their desire for time-saving digital features, and we want to help our clients respond effectively to this demand. There is no doubt that the ability to satisfy millennials with innovative digital services will be fundamental to the future success of retail banks.

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