Revitalizing Financial Services for evolving customer demands
Banking customers are evolving, and the FinServ industry is having to reprioritize investments to close the experience gap in real time.
For the third year in a row, Monigle has co-authored the Humanizing Customer Experience report with American Banker. This year, we surveyed 5,500 bank consumers to understand what today’s customers deem most important when choosing their primary and secondary financial institutions.
We recently released a brand-focused version of the report, Humanizing Brand Experience: Financial Services edition, Vol 3, in partnership with American Banker.
Since our first Humanizing Customer Experience report in 2021 and our following report in 2022, clear patterns have emerged that signal changing customer expectations. FinServ brands can no longer succeed by focusing on individual moments in time. Instead, banks need to partner with their customers along their entire financial life cycle.
The evolution of the FinServ brand experience
In rating 10 statements considered important to bank customers, consumers have ranked “gives me confidence that my financial health will be better tomorrow than it is today” as fifth – up two spots from 2022.
Today, customers expect every financial milestone to be supported by their primary institution. They look for lifetime partners that will innovate solutions as their personal financial situations change over time.
Customers’ changing preferences are brought on by the progression of technology and digital tools within the industry.
Three years of data has exposed three major evolutions in brand experience.
1. FinServ’s digital transformation
Perhaps the most significant shift from 2021 to 2023, as well as the largest discrepancy between generations, is the demand for digital. Traditional in-person touchpoints are being replaced by online interactions.
When asked how banks are meeting behavioral expectations, the importance of “best online banking experience” and “best mobile banking experience” increased for consumers compared to the previous two years.
Out of 15 sensorial attributes, consumers ranked “has digital spaces and websites/apps that appeal to me” as the second highest attribute of all options. However, the statement “[Brand] has physical spaces and environments that appeal to me” dropped two positions since 2022, now ranking 6 of 15.
Creating a seamless online experience for customers is mandatory to win in today’s marketplace. Yet, adding multiple digital touchpoints to our products has the potential to create a fragmented brand experience.
Too many banks put a band-aid on their digital transformation in an effort to trade time for money. We prioritize speed during the implementation and fail to activate our brand. While in the short term financial institutions may see an uptick in activity, the disjointed brand experience will be detrimental to customer acquisition and retention in the long run.
When deploying new customer-facing technology solutions, it’s critical that brand is at the forefront of the process. Safeguarding consistency across visual identity and messaging, as well as congruence with in-person touchpoints, will ensure a successful product roll-out while avoiding brand erosion over time.
2. Personalizing experience
The digital revolution has paved the way for another growing customer demand – personalization.
In rating 10 statements considered important to bank customers, respondents have ranked “understands my unique financial needs” fourth, two spots higher than in 2022.
Meanwhile, the statement “[Brand] makes it easy to access my money” has continued to decline year over year compared to other behavioral attributes, proving that experience trumps convenience for today’s FinServ customer.
When customers receive an offer or communication from their financial institution that isn’t relevant to their situation or life phase, their affinity with your brand has the potential to drop. You haven’t just shown them something that’s irrelevant – you’ve shown them that you don’t value their time.
Reaching and resonating with different generations of banking customers means catering to where they are in their financial journey at that moment. FI’s have the opportunity to leverage their customer data and pair that with the vast digital tools at their disposal to create exceptional personalized experiences that satisfy today’s need and secure tomorrow’s loyalty.
3. Attracting customers with incentives and rewards
It may sound like a no-brainer that monetary incentives and rewards are attracting customers. What’s surprising is that these offerings are more important in 2023 than they were in 2022.
Customers rank the statements “has better monetary incentives than other banks” and “rewards customers for their loyalty” as more important than they did a year ago.
Analysts theorize the increasing emphasis on cash now is driven by a growing desire to save in times of economic uncertainty, inflation, and outsized mortgage rates.
Regardless of the motivation behind the rankings, the importance placed on these seemingly in-the-moment touchpoints may appear to contradict earlier assertions surrounding consumers’ financial life journey and preferring understanding over convenience.
However, it’s not an either or. When considering the role of incentives and rewards in the greater financial life cycle, it illuminates the significant branding opportunity to marry the right incentive with the right person on the right channel at the right time. There is nothing more significant we can do to solidify our brands than be there for our customers in their unique and personal moments of need – except perhaps prove to them we understand how their needs evolve over time.
Establishing a clear brand experience North Star
With customers demonstrating the weight they place on brand experience, FinServ’s success will be determined by each organization’s ability to establish a clear brand North Star to drive investment, backed by the culture to deliver on their brand promise.
Alongside our Humanizing Brand Experience: Financial Services study, American Banker conducted research in April and May of 2023, in which they asked 156 banking leaders how banks are currently taking the necessary steps, and making the right technological investments, to successfully deliver on the banking experience customers value most based on these brand experience drivers.
The study found banks are implementing three intertwined strategies to provide optimal brand experiences:
- Offering banking services that align with key customer experience drivers
- Defining and embedding an ideal brand experience, aka the “North Star” goal
- Consistently delivering against a set of highly customer-centric attributes
Three-quarters of Financial Institutions indicated they have clearly defined what their ideal brand experience (their “North Star”) looks like. About half of these banks have fully integrated their North Star into operations. Not surprisingly, larger banks are more likely than community banks and credit unions to have established and fully implemented their North Star.
The study also found a personalized service approach and customer centricity go hand-in-hand with a brand experience North Star. Most Financial Institutions who have embedded personalization and a customer-centric into their operations have also established a clear brand experience North Star.
In terms of customer centricity, 60% of all banks surveyed can be categorized as highly customer-centric, with mid-sized banks at the forefront and community banks coming in last.
A new frontier
The banking customer’s journey from 2021 to 2023 has unveiled clear patterns that underline the need for financial service providers to adapt and innovate. Traditional banking paradigms are giving way to digital-first strategies. Customers now seek tailored solutions that align with their individual circumstances and life phases, as well as relevant incentives that resonate with their financial goals.
As banks rapidly transform to meet new consumer demands, brand serves as a bridge between the trusted traditions of banking and the exciting possibilities of the digital era. Building upon the insights garnered from the Humanizing Brand Experience: Financial Services report, banks can establish a human-centric North Star brand experience, enabling them to set the right priorities and invest in the most impactful areas.
Is it time to better integrate your brand with your digital transformation? Send me a note and let’s chat through the best course of action. Don’t forget to check out our Humanizing Brand Experience: Financial Services edition, Vol 3 report.