High street banks have six months to provide more customer-centric digital and mobile offerings, Quadient warns
Despite ongoing branch closures, high street banks have not weaned customers on to their digital and mobile offerings, and will lose customers if these offerings aren’t more customer-centric in the next six months, customer experience expert Quadient has warned. Research from McKinsey shows people have not fully embraced digital banking during lockdown and want to return to physical branches post-Covid-19.
Consumers currently report a better mobile and online experience from challenger banks – meaning high street banks need to focus on improving their digital offerings before they press ahead with plans to close more branches.
“Lockdown forced widespread adoption of online and mobile banking – but banks did not fare as well in this acid test as they should have. Rather than being the moment digital investments paid off, instead it was a wake-up call that many banks do not yet have the finished article. If they don’t become more customer-centric in the next six months, banks should expect their customer base to shrink,” warned Andrew Stevens, Principal, Banking and Financial Services, Quadient. “If banks continue to close branches without ensuring digital systems are meeting customers’ needs, they are setting themselves up to fail. The challengers currently lead the way, using mobile and online systems built with customers in mind that make account holders’ lives easier, rather than more difficult. One-way relationships typically don’t last long, and customers who don’t see their bank investing in their digital experience are likely to switch away.”
A clear challenge for banks is that consumers haven’t embraced mobile. McKinsey’s research shows a swing of just eight per cent of UK consumers towards using online banking more once the Covid-19 pandemic passes, and a swing of just three per cent plan towards using mobile banking more post-Covid-19. However, there are ways to begin addressing the issue.
Becoming more customer-centric does not need to involve a large amount of organisational buy-in and budgetary support. Instead, banks can ‘start small’ – focusing their time and effort on adopting specific technologies to improve parts of the customer experience. This could be as simple as mapping customer journeys on mobile services so that the bank can understand and address pain points or add new services such as real-time advice.
“The value of a digital service is in offering more than just telling customers what they know, or giving them the same information and services they already had on existing channels. For instance, notifying a customer that they’ve just spent £5 in a coffee shop isn’t adding value at all,” Stevens continued. “But if the service can recognise that the current account is nearly out of funds and offer to transfer money from a linked savings account or extend its overdraft, then the customer will truly benefit.
“It’s not a case of needing to start from scratch, as banks already have a solid base of digital channels they can build on. To add more value for customers, they must first consolidate their customer data and channels so customers have a unified experience. They can then use technology to put that data to practical use and ensure the relationship is two-way, benefitting both parties. This will enable banks to catch up with the challengers, build loyalty to keep hold of their customers and demonstrate the benefits of using largely online and mobile services over regular branch visits.”
