Using Customer Pain Points to Drive Bank Innovation

 In Customer Experience, Fraud

iStock_000060404730_SmallMobile is rolling out faster than anything ever has in the financial industry. This is due to necessity (consumer demand) and an understanding that there is a great deal of competition from the digital disruptors. Banks aren’t taking this movement lying down. They are learning to bring innovation to the bank with the least amount of heartache for their legal and compliance teams. Their approach is enabling them to stay ahead of competitors.

There are very real barriers to banking innovation; legacy technology, regulatory hurdles and differing departmental goals all slow progress. Banks are finding ways to move forward by focusing on what their customers want, on what they can realistically deliver, and prioritizing from there. A financial industry executive recently commented that they are their own biggest threat. If the customer wants a 10 speed and they are trying to build them a Ferrari, they risk derailing the bank.

There couldn’t be more truth in that statement. Banks don’t need the coolest technology, but they must have technology that meets customer needs. Consumers want to use smartphones and tablets to do their banking and that means financial institutions must be prepared to offer a great user experience that highlights security. Many banks are responding by surveying their customers to find out what capabilities really matter. In some cases this might mean removing a barrier they didn’t even know existed.

Case in Point

One relationship-based bank learned that its customers wanted to be able to complete the entire account opening process online. While the bank’s philosophy of service centered on people coming into the branch, they understood this was becoming a point of friction. The bank permitted most of the steps for submitting product applications online, but required the customer to come to the branch for a signature. They recognized that removing the barrier of physically signing a piece of paper would make it easier for their customers to do business with them and create a better experience.

Understanding the points of friction for your customers is only half the battle. Getting all departments on board with implementing change is critical. Marketing can talk until they are blue in the face about what resonates with customers, but if legal and compliance teams are focused solely on protecting the bank there is going to be a disconnect.

Where do we go from here?

A forward looking response is to have marketing and development work in tandem with compliance every step of the way when innovating. Consensus reached early and often, will minimize delays as projects progress. Data points about frustration customers experience need to be shared with compliance so they have an understanding of why a new process or technology is needed. A best practice is having a prototype that demonstrates exactly what is trying to be accomplished. Using that prototype to show the steps a consumer would go through, including built in security measures, to complete a fully online application will instill confidence that neither the bank nor its customers will be put at risk.

Your bank’s development road map must take the customer perspective into consideration. Several large financial institutions are looking at data from their call centers to evaluate gaps and prioritize changes they need to make. Some consider even one phone call to be a failure. If a customer was not able to resolve an issue with their account through the website or on a mobile device, they want to know why. This feedback often shows that banks don’t need to invest in the next big thing, but do need to fix what impedes their customers from completing financial transactions.

Understanding points of friction helps banks invest in what customers will use and find valuable. Happy users equate to successful financial institutions.

Financial industry executives are aware that digital disruptors are spending billions on research and development. This can’t be a deterrent; it must be a driver. Banks need to invest more wisely, based on real customer needs. Since mobile is rolling out so much faster than other technologies there is little time to waste before developing your approach to innovation.

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