Customers want to be more than just a number to a bank. They want to have seamless, highly personalized interaction, whether they are meeting a banker in person or are on the go. This is especially true for the Millennial generation, who are used to fast, low-friction smartphone interactions for everything from ordering food and transportation to having clothing delivered.
In Canada, most traditional banks have already embraced digital technologies. According to a new report from Deloitte on Disruptive Forces in Canadian Banking, massive investments have already been made toward unified customer records for data aggregation, with a focus on building the Golden Record or Customer360. However, neither of these activities address the fact that customers are more than just a consolidated set of transaction records; they have high expectations when it comes to engaging with their banks.
Simply renovating a branch with a different layout and branding to attract new customers is not enough to drive long-term retention. Convenience and simplicity are key. Number26, a predominantly online European bank, allows its customers to make deposits at any participating retail vendor at the point of sale, thereby eliminating the need for traditional brick and mortar branches. The ability to make a banking transaction anytime, anywhere is what sets Number26 apart.
Companies like Lending Club, Sofi, and Canada’s Wealthsimple are having success challenging the one-stop-shop model of the big give Canadian banks by focusing in on a single part of the financial services stack: personalized customer service. They can provide a fast, user-friendly, friction-free service that the big banks don’t have the flexibility for.This dedication personalized customer service as the center of the business is creating disruption across the financial services industry and driving a new era of digital innovation that’s catching the attention of the big banks.
Big banks are often victims of their own success. The many products, services, mergers, and acquisitions not only lead to disjointed systems of record but also to a siloed culture that is often reflected in a poor customer experience. Terry Cordeiro, Lloyds Bank head of digital transformation in the UK, recently spoke about all big banks becoming “just plumbing.”
“At the moment we do very little with data,” stated Cordeiro. “All we do is present it back to [customers] as a statement. We need to use it in the right way, such that we can help you make smarter decisions.”
Major banking institutions worldwide are facing this data dilemma, with some choosing digital technology as a strong foundation to deliver more personalized customer experiences. Deutsche Bank’s European chief information security officer recently discussed the banks commitment of €1bn to 2020 investment in Digital Transformation: “Digital transformation is what enables the bank to remain competitivebut we have had to do lots of hard work behind the scenes to enable an end-to-end experience in line with customer expectations.”
Whether to buy, build, or partner is often a hot topic in the board room of the largest financial services organizations worldwide. Almost every financial institution has pursued at least one of these; some have opted to do all three. Matthew Wilcox, SVP of the Digital Banking Group at Fiserv, was asked about what’s to come in 2016 to 2017 for banking partnerships, “I believe you will see advancements in partnerships with fintech companies who have created specific-use case solutions that will drive enhanced results for retail, small business, and corporate banking customers.”
Scotiabank chose the buy option when they acquired a predominantly digital bank, ING Direct Canada, which they rebranded taso Tangerine. It offers more favourable rates to customers by avoiding the costs of running a network of branches, so it has a different value proposition and targets what would normally be separate consumers from its parent company. EQ Bank, part of Equitable Bank. It is a great example of a bank testing the build waters by creating a brand to compete with the likes of Tangerine and others, without requiring the traditional branches network.
One of the ways banks are responding to the digital disruption across the industry is by rethinking the role of the banking branch. Rather than focus solelyon the look and feel of a branch, several banks are differentiating their service experience to manage complex transactions in a unique environment. Synovus Bank, for example, used a platform of engagement to create the “universal teller,” so that almost each and every floor-level employee can provide a vast array of services to any customer, at any time.
Deloitte helped ANZ Bank (Australia and New Zealand Banking Group) take the physical branch one step further by creating a virtual garden, a fully interactive, 11-metre-tall digital wall that spans three levels of their flagship Martin Place branch in Sydney. This virtual garden is breaking the banking status quo by bringing a fun and interactive experience into the overall branch environment. With interactive tweets and changing installations, this digital wall is pushing the boundaries of what a banking experience is expected to be like when you enter a local branch.
To learn about the challenges facing Canadian banks and how they are responding, download the free Salesforce Canada sponsored report by Deloitte Digital: