Digital transformation in financial services has changed the way people manage their money. From sophisticated mobile banking apps to personalized text message services, the banking experience has become more personal and more efficient. For example, it’s easier than ever for customers to track their spending, manage their budgets, and check their credit score.
To stay ahead of the competition and maintain a loyal customer base, financial services companies need to have top-of-the-line communication. Since customers expect quick and convenient access, you need to provide that on all levels. Here are three trends you can take advantage of to up your communication level.
Let’s dive in!
1. Kick start customer engagement with personalized text messages.
One trend of achieving digital transformation in financial services is through personalization. Lots of banks still send paper statements to customers when a balance comes due. But other than the customer name and address, these letters are very impersonal. They’re standardized notices that every customer gets, so they don’t encourage engagement or guarantee that customers will even open any of the letters they get.
Instead of sending mail, create a personalized customer experience with SMS text messages. That way, you can send real-time information such as payments to date and outstanding balance. Plus, you can include a link for customers to pay through their phones.
This strategy works to improve engagement because 78% of customers say that they like to connect with businesses via text. That makes sense, considering the average adult spends about four hours a day on their phone. When you cater to their preferences, customers are more likely to see text messages and engage with more personalized messages.
Go one step further with this trend and use rich media messaging (RMM) to make it easy for customers to take action and pay back loans. By giving customers the option to pay right away—instead of getting a paper reminder to log online to pay at a later date—you increase the chances of repayment.
With mobile messaging, more banks are using SMS and RMM to do more than send deposit and withdrawal notifications. Banks are sending fraud-detection notifications, customer surveys, and more to create a two-way dialogue and build a trusting relationship with customers
An example of a bank using mobile messaging to improve customer engagement is HSBC UK. They offer Business Text Message Banking to their business customers. As part of the service, when business customers register, they get monthly statements, balance alert messages, withdrawal notifications, fraud alerts, and more.
Key takeaway: Embrace digital transformation in 2019 by using text messages to make it easier to engage with customers on a more personal level and to reach them immediately. Think about what your customers need, and then send relevant messages. For example, for customers interested in budgeting, send them budgeting tips along with their payment reminders. That way, you prompt them to pay their balance, and you teach them how to use credit more effectively in the future.
2. Use mobile apps to upgrade the customer experience.
Another popular trend for developing digital transformation in financial services is through upgrading customer experience with mobile apps. Between Google Play and the App Store, there are hundreds of finance apps to choose from. It’s clear that more customers see the growing number of tools—everything from budget-planning apps to credit-alert apps—as a go-to option to help manage finances.
In addition to third-party apps, in 2017 nearly 22 million people used banking apps to manage tasks like tracking credit payments and monitoring account balances. Instead of logging on to a banking site, customers can access all of their financial information from their phone.
The benefits of the mobile app trend are twofold:
- For users, apps are convenient and make it easier for customers to manage their payments and access customer support from anywhere.
- For financial services, apps help with sending relevant bulk notifications to segments of customers.
Use your existing app to look for opportunities to add new features to make it more user-friendly and engaging. More banks are looking for more opportunities to engage their customers. Banks have added new features to their apps that let customers do things like apply for new accounts, transfer funds to different accounts, and set up recurring payments, all within an app.
An example of a bank that’s found opportunities to simplify banking and communicate with lots of customers at once is Barclays. With the Barclays app, customers have access to features like depositing cheques with their smartphone, setting up personalized daily-withdrawal limits, and specifying where debit cards can and can’t be used—for example, setting cards to be used only in person, not online.
Key takeaway: Having your own app makes it easier to normalize certain behaviors among your customers. For example, an app makes it easier for customers to check their accounts and use the features within it. An app ultimately makes finance more accessible, user-friendly, and easy to use. In the long term, customers become more financially aware and review their accounts more frequently.
3. Meet customers on their terms with optichannel communication.
If we looked at a banking customer’s online behavior, we’d see that spend a lot of time on different platforms, depending on their needs. For example, they might use a combination of mobile, brick-and-mortar banks, statements, and more to manage their finances.
To give customers a consistent experience across all of the platforms they use, the optichannel communication trend helps banks to first identify which channels customers use the most and then create processes that incorporate each channel. This is a valuable trend to follow because it helps you create a seamless customer experience. It doesn’t matter where customers interact with you online—the experience is the same, and customers get what they need.
Halifax—a part of Lloyds Banking Group—uses a combination of online, mobile, telephone, and branch banking to support its customers.
For example, Halifax shares account updates via their mobile banking app:
And they give customers the option to manage their accounts via their online banking platform:
Let’s look at an example of what of what optichannel communication looks like for a customer who wants to manage their finances and debt. In this example, the customer uses three channels: a local bank branch, a mobile app, and a call center:
- Channel 1-Bank branch: The customer visits their local branch to deposit or withdraw funds from their account.
- Channel 2-Mobile app: The customer then uses the bank’s mobile app to check their balance and manage their finances— pay bills and monitor their budgets, for example.
- Channel 3-Customer service: Next, the customer calls customer service to follow up on a loan application and to discuss their debt repayment options for the loan.
In this example, the customer has the flexibility to manage any aspect of their finances using more than one channel. Optichannel communication makes it easy for banks to follow up as well. For example, after the branch visit, the customer might get a text message thanking them for their visit and get a receipt of the transaction.
Nick Williams, former digital director at Halifax, said, “The future of banking means continuing to deliver great service across all channels, enabling our customers to bank where they want, how they want and when they want. A growing number of customers want the best of both worlds—the convenience of banking on the move, alongside a helping hand from their local branch when they need it.”
Key takeaway: For this trend to work it’s important that the experience across each of these channels is seamless. For example, when a customer checks their balance online, it should also show their pending loan application. Or when customers visit a branch, the computer system should show recent payments.
Managing digital transformation in financial services
These trends are great examples of digital transformation and show how far the financial industry has come by putting customer experience first. These trends are also meant to act as a guide to help you build a communication strategy that helps you connect with all types of customers.
To get started, change the way you communicate with customers today. Gradually weave in suggestions from each trend into your ongoing communication strategies. You’ll find that, over time, your relationship with your customers changes for the better and you retain them for longer.
Published on: 26th March 2019