Customer Experience in Banking and Key Opportunities for Improvement

In the past few years, technology has brought innovation into all aspects of daily life. From communication to shopping, all generations rely on tech to make life easier. But in the case of customer experience in banking, there's still a number of players who fall far behind. At one point in time, lagging behind would have been no big deal. Banks would attract customers with other perks — and expect them to live with outdated technology. But new solutions mean customer experience in banking is more vital than ever before. Failing to stay up to speed means losing customers to competitors.

Customer Experience in Banking as a Differentiator

CX is a key battleground and competitive differentiator. In the digital world, the ante has been raised for delivering exceptional customer experiences. From booking taxis to same-day delivery, customers now expect simplicity and speed in all dimensions of their personal life. However, in banking there are aspects of the customer journey that are not that fully optimized for today’s customer expectations. Banks have rightfully focused on webpage navigation, mobile optimization, and apps, but does that really help if compliance or heavy documentation gets in the way?

Why Focus on Customer Experience?

Banks often promote things like interest rates, money-saving perks, rewards programs, and other benefits to attract new customers. That's quite effective at drawing people in. But at the point of conversion, new would-be clients are simply lost. Lightico asked a group of college students to describe, in their own words, the onboarding processes for several leading banks. Those students experienced a number of failures during their online experiences. These are the kinds of glitches that are almost unheard of in other industries:

• Having to switch from app to browser and back to app
• Inability to find a credit card application on the company website, followed by a chat representative telling the customer to look on the website
• Completing a lengthy application process for a bank account, only to be told approval was pending and notification would come later by email
• Terms and conditions that are hard to read and understand
• Technical problems like timing out after only being on the site a few minutes

For college students who have never known life without technology, these are significant frustrations. They don't contribute to a pleasant onboarding experience. And they certainly don't reassure the customer that their banking experience will be any better down the line.

Who's Missing Out

Indeed, it's Millennials and Generation Z who are most affected by the lack of intuitive technology. They are also the most likely to choose a competing bank because of that very issue. Eighty-two percent of Generation Z want a great online or mobile experience, so much so they would consider that a factor to switch banks. That's compared to just 52 percent who would switch to find lower fees, according to Lightico's recent survey. But it's not just the 40-and-under set who are underserved by a lack of banking technology. Those who make $30,000 to $50,000 annually — about 38 million Americans — also suffer these same frustrations. This group was more likely than any other income bracket to be forced to use paper in what should be a digital banking process. As with Generation Z, 77 percent of low- to mid-income individuals cited a better online experience as the primary motivator to switch banks.

How CX Technology Fills the Gaps

The importance of intuitive technology is clear. The best part is that it's relatively easy to implement. Just a few small modifications can vastly improve the onboarding and customer experience. That in turn leads to greater customer satisfaction and long-term retention. Here's some ways to turn those customer frowns into smiles:

Make it mobile.

Today's banking customers want to do everything from the palm of their hand. That's how they shop, communicate, and navigate the world. Innovative banks make this possible through apps and new onboarding processes. They send a link via text message that opens a secure online portal. A few steps, and the bank has a new customer.

Make it easy to confirm identity.

Know Your Customer (KYC) and anti-money laundering requirements mean banks have to know who they are dealing with. But they may not realize a lot of this is possible through automation. There's no need to see a customer in-branch if they simply snap a photo of their identification documents. That's easier for both the bank and for the customer. In fact, in Lightico's feedback survey of college students, the bank that offered the simplified ID verification step received high praise.

Use smart forms.

If a bank is creating a fully digitized onboarding experience, it's tough to stick with PDFs. Imagine a customer downloading one onto their phone that they have to print and fill out. Alternatively, they may have to download specific software to let them fill in the PDF using their mobile device. Smart forms allow for easy mobile completion, and even link to information the bank already has. That cuts down on the work the new client has to do.

Ditch the paper signature.

Some banks may think they have already done away with the traditional style of signing forms: putting pen to paper. They may use an alternative, like an e-signature request that goes to the new customer's email. That's a minor step forward, but there's one better: a text message that goes right to the customer, who with one click and the movement of a finger completes the onboarding process. There's no need to shuffle through a number of emails, or deal with correspondences going to spam folders. Avoiding confusion and delays is particularly crucial at a time when the bank and the customer are ready to close the deal.

Offer the human touch.

Technology doesn't mean customer service reps are out of the picture. Remember the college student who couldn't find an application form on the website, and was told by a rep to look on the website? That student wondered whether the rep was a real person or just a chatbot. To make the best impression, it's important to have real people there to offer real time assistance.

Make it secure.

Of course, ease and efficiency should never come at the expensive of security. Banks should use secure APIs to protect their customers' information. That gives the new client peace of mind that their data will stay safe with the organization.

Innovators Lead the Pack

Banks that place an emphasis on improving the customer experience will succeed by implementing accelerated onboarding processes, and providing customers with simplicity in day-to-day transactions and loan origination.