What’s today’s hottest commodity? Not gold, corn, or software... Banking.
The evolution of banking from something you do to something you buy began decades ago, but has accelerated dramatically in 2020. “One of the biggest changes with COVID-19 is that it has truly commoditized banking,” said technology strategist and futurist Crystal Washington. With fewer opportunities for relationship-building, how can banks differentiate themselves from other institutions and non-banks offering the same services?
What does this industry commoditization mean for banks? Find out during Washington’s keynote at the upcoming WBA Management Conference! She’ll help attendees uncover future tech trends, identify potential unintentional effects of COVID-19 on banks, and understand tactics for consistently wowing clients with every interaction. Click here to register.
To thrive in today’s environment, banks must focus on customer experience and broaden their vision of the competitive landscape.
Strong customer relationships are a key component of a positive customer experience in banking. Now that the pandemic has reshaped consumer habits to further reduce the interaction customers have with their bank, banks must work harder to form and maintain those relationships. “Right now, when people are socially distancing and when our banks are not communicating with their clients as much as they did in the past in person, when they do come through that door or interact with our websites or apps, we have to up our game on the experience,” said Washington.
One way banks can do so is by integrating technology into their approach to customer service. “Banks have to think about adding the relationship element into their technology,” Washington advised. For example, designing the bank’s website and/or mobile app with a human personality so that when a customer interacts with the bank on those channels, the branding and “feel” are consistent with an in-person interaction and help to maintain loyalty.
Another way to enhance the bank’s customer experience is by customizing the experience to the client, according to Washington. Especially with all the data banks can access about their clients today, there is an opportunity to “really upgrade the way we look at customer service going forward,” she said. For example, many banks today do not utilize scheduling systems for making appointments. If a customer wants to visit the branch, they must call and interrupt branch staff, schedule an appointment over the phone, and then call to confirm or reschedule if something comes up. Washington said implementing a digital scheduling system can make the experience much smoother.
When it comes to defining the competitive landscape, some bank leaders still focus entirely on other financial services entities (other banks, credit unions, etc.). Washington recommends keeping an eye on other industries, too. “Be on the lookout for the fact that nonbanks are now bundling fintech into their platforms,” she said. The competition doesn’t need to have banking infrastructure in order to take market share. Even though Uber has no cars and Airbnb has no hotel rooms, both companies have disrupted the legacy players in their industry. “Banks are up next,” Washington warned.
To stay on top of this ever-changing landscape, bank leaders must be proactive. Washington recommends, especially for bank executives, keeping abreast of new developments in technology by reading blogs and listening to podcasts, and not necessarily sticking to ones that focus on financial services. “It doesn’t have to be industry-specific, because oftentimes, we can listen to something that’s happening in retail or real estate and see how it would apply to your industry,” she said. “Sometimes we can estimate what’s going to happen just by looking at trends in other industries that tend to adopt certain types of technology before we do.”
The most important part of being proactive is to keep improving on the bank’s products and services. Banks cannot rest on their laurels, Washington said. “What has worked up until this point is not what is carry you into the future,” she said. “When we divorce ourselves from what was, even if it was effective at the time, we open ourselves up to innovation and relevancy.”
Seitz is WBA operations manager and senior writer.