The great usability debate: Should banks pursue a one-click experience?
Customer experience is the Achilles heel for banks in today’s digital age. Consumers want the distributed, one-click experiences they get from companies outside the financial industry. You can find a restaurant by cuisine type, its location, how far it is from the exact spot you are standing (both on foot and by car) and make a reservation—plus call a car to get you there through one click on your mobile device. Yet managing personal finances and completing bank transactions in the same manner can be extremely frustrating, if not impossible.
Can banks achieve a one-click experience? Maybe the bigger question is, should they? Let me share my thoughts on this impending debate to open the discussion.
Restaurants and retailers don’t face the same risks when it comes to a distributed experience. Anything that removes friction from the decision to choose their location and complete a purchase is a win for them. While that may also ring true for transactions in the financial sector, banks have the additional responsibilities of managing fraud, credit risk, and compliance. Convenience is what customers crave, but at some point this convenience will come with a cost if banks simplify too much.
When a person is approved for a loan or credit card, they are entering a legal contract and obligation to pay back the money they have borrowed. By simplifying the credit approval process do we take away the gravity of that decision? If a consumer can complete the process in a few minutes—or even seconds—are they truly able to consider the terms carefully or the financial impact that loan or line of credit will have?
Don’t get me wrong, there are definitely pros to a fully digital process for banks. Less paperwork, lower acquisition costs, happy customers. Numerous data and service providers can verify identity, evaluate credit risk, and minimize fraud through mobile channels. The technology exists to streamline account opening and make the distributed financial experience a reality. All of these things considered, there still needs to be balance between easy and responsible lending.
Banks understand the challenge of providing valuable financial products in a changing environment. Competition is fierce and no longer coming just from the bank next door. They are being benchmarked against all the apps and streamlined mobile experiences of every industry. Because financial institutions are held to much higher compliance standards than most businesses, they also face the additional hurdle of regulator-induced friction on their digital journey.
How banks can support customers’ desire for realtime financial experiences without sacrificing fiduciary responsibility just might become the great usability debate of this decade.
Should banks pursue one-click experiences? I welcome your comments.