The place that banks once held in the hearts and minds of consumers has changed drastically in the last few years. They no longer choose their bank of choice based on location but instead look for speed, efficiency and ease of use. The evolution of technology over the past few decades has meant that all aspects of financial services have had to adapt from mortgage solutions to insurers.
The problem lies in that banks were originally built to be hyper-local. But this no longer fits with today’s fast paced society who often choose to live and work away from their hometown. As digital transformation continues to take hold, banks have to change their approach to customers and user experience. Digital services combined with recent lockdowns has meant that banks have had to quickly pivot. This is to ensure that their services are sophisticated enough to meet every user’s needs. The rise of new entrants such as Monzo, Plum and Emma have opened the market and provided more choice than ever.
Today’s consumers want everything in one place. They also want apps and services to integrate. So, if they’re applying for a mortgage from their bank, they will find it useful to be recommended contents insurance too. The major tech players like Apple and Google have ventured into financial services by integrating payment systems onto smart phones. This drives loyalty and retained revenue. Customers become loyal as they get the dual benefit of economies of scale and a great experience. It’s important to take the time to identify the best direction to take for your organization. Doing this background research ensures that time, money and resources aren’t wasted by creating services that aren’t customer-centric, and that customers don’t want.
Banks need to push forward with full digital transformation. They need to overcome the legacy technology which has thus far held them back. The main takeaway for banks, building societies or anyone in the ecosystem is to put consumers at the heart of operations. Loyalty no longer exists, so to lower acquisition costs and boost retention, look at how to appeal to consumers and keep doing so. Leverage personalization. Products are not good enough, experience is king.
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