10 Customer Experience Trends That will Impact Digital Banking in 2020

19 December 2019

#1 The banking monopoly is crushed forever: admit or quit

In the digital age, in which almost everyone is able to build an app, banks are losing their power over customers. The monopoly of banking is disrupted by global banking digitalization impacted by different banking regulations and the emergence of technology.

Even though it seems like simple math that products should work for customers, not against them, many banks still seem to make people’s lives extremely difficult. That’s why, gradually, more and more people choose to leave the traditional banks with limited options for the Fintech unicorns that offer convenience and positive emotions.

Recently, in some countries, large banks were almost monopolists because they had a very strong and stable market share. Strong barriers of the financial services market entry, loyal customers and the absence of worthwhile alternatives ensured good positions for decades. Today they are processing digital transformation in a rush before it’s too late.

There’s a joke that millennials would rather go to a dentist than a banking branch. Of course, it’s an exaggeration, but it is based in fact. At the moment, consumers have a wide choice of convenient alternatives to traditional banking that solve user problems and do that through pleasant, enjoyable and even fun experiences, while most of the banks are doing quite the opposite─causing stress, friction and frustration. Why would anyone put up with that if there is a possibility of managing finances simply and pleasantly? This obviously takes power out of the banks’ hands.

#2 Bankers’ mindset of today affects their future

The future of the banking industry depends entirely on how the new generation of bankers can bring their mindset in line with the digital age. Some of them already use Design thinking to bring the best value to their customers, while others lag behind, with a risk of missing the last train to success in the digital age.

There’s a common problem in the financial industry─often numbers are more important than people. And, the future is owned by those who are able to empathize with user needs and expectations. Most importantly, what pains and struggles do they face and how can that be solved? The so-called “digital banking superstars” put customers into the center of their business DNA─at every level of the company and in every employee and department.

F*ck the legacy

Traditional banks are focused on their culture of protecting their legacy and maintaining the corporate image. That’s why any new changes come slowly and painfully. It is self-evident that this legacy is holding back a number of traditional banks. That’s the reason why even implementing new technologies doesn’t save banks from losing clients. Banking superstars challenge legacies and encourage their teams to step out of the box.

Visionaries wanted

Steve Jobs, Jack Mae, Elon Musk, Jeff Bezos and Mark Zuckerberg are the heroes of the digital age. Surprisingly, however, they are not inventors of new technologies. They are brilliant visionaries who understand what people need before customers even realize it themselves. Their vision executes such an innovative approach to available technologies that it has caused a cardinal disruption in the modern world. And, in the past few years, we’ve seen the rise of some Fintech visionaries. This is the “air” that industry needs to evolve and grow.

Value is the mother of all

For many banks, the main focus is on the product and the benefits it will provide the bank itself in terms of increasing the profit. Banks are used to thinking about:

  •  How they will implement the technology;
  •  What features the product will have;
  •  What the team will consist of;
  •  What marketing tricks will help sell it, etc.

This kind of model has operated for decades, but banking superstars prove it’s all wrong. The difference between thinking about product features and focusing on the user is value.

#3 Experience transformation displaces digital transformation

Everyone is aware that digital transformation is a must to survive and thrive in the digital age though not everybody knows that digitalization itself does not guarantee solid success in the future. There are so many cases in which attempts to transform lead to failure.

You can use technology to create a mobile banking app for the customers, but that, in itself, doesn’t make them happy. What if the app is difficult to understand and use? What if the users aren’t able to do simple tasks without support? What if it’s impossible to reach Support, and the person on the other end is unfriendly and arrogant? We can all recall such situations.

We see so many examples of this on social media where people are sharing their awful experiences with digital financial products. Digital transformation itself is not enough to ensure customer happiness and demand. It’s all about transforming the experience.

Digital transformation is pointless if it doesn’t transform the user experience, and design is how we create this experience. We use UX design and digital technology to take an awful user-experience and transform it into an unforgettable one that makes users happy and solves their problems.

The truth is, if you don’t focus on the best possible experience for the customers, you will most probably lose them to the companies that have customer-centricity as their top priority.

Experience is the key in the digital age. We believe the future of the banking industry depends on the ability to deliver a delightful experience to the customers.

What is the purpose of any business digital transformation? To increase its effectiveness and success, right? And what determines its success; how is it measured? Someone may say it’s about profitability, but where does the profit come from? Customers. Demand. Loyalty. Recommendations. Satisfaction.

What does it all depend on in digital services? User experience.

This means that, if we want to increase success, we need to take user experience as a starting point and, based on this, select the optimal channels and service functionality.

Lack of this understanding becomes a constraining factor that prevents traditional players from carrying out a successful transformation. That’s why, in fact, we should talk about experience transformation instead of digital transformation.

#4 Banks start to “look up to” Fintechs

What differentiates successful Fintech companies from traditional banks? It is the attitude toward their customers and businesses. The main aim is to help the customer, not to achieve profit in any way possible. It requires completely different business priorities that are built around the user.

There is a huge difference between the Marketing Age, as we call it, the one before the digital transformation was in full speed, and the Digital Age or, as we call it, the Experience Age.

For some of us, it is really difficult to jump over it, but there is no other way to achieve future success. To fit into the new conditions, a business must integrate user-centricity at the level of mindset and culture.

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