In our recent Digital Banking Summit Series, we sat down with global banking leaders to unpack how the pandemic is transforming financial services.
If you weren’t able to attend, don’t sweat it. We’ve compiled some of the biggest highlights right here. Read on to find out what experts are saying about the future of banks, personalization, and the trust deficit.
The evolving role of banks
Let’s face it, the relationship most people have with their banks is transactional. You safeguard their money, provide them with wealth management services, and help them pay for things. The customer-bank relationship as we know it has remained unchanged for hundreds of years.
Until now.
Banks are sitting on a vast quantity of consumer data. In fact, they might know more about their customers than any other commercial institution. That’s because they have deep insights into customer demographics, behavioral patterns, life milestones, service preferences, and so on.
If consumer data is the new currency, then financial institutions are very rich.
This represents an unprecedented opportunity to create deeper connections with customers and provide more value across every touchpoint—not just the ones that matter to your underlying business.
We’re helping the bank not only as a financial vault but as a data hub to gain better customer insights by understanding data patterns with the permission of the user. We are then able to create meaningful recommendations and predictions that serve to build trust and expand the relationship between banks and their customers. We’re seeing a lot of value in terms of what banks can do to transform their business models.
In tomorrow’s world, banks will reposition themselves at the center of a large data ecosystem built on alliances, which will catalyze exponential growth in customer insights, thanks to networking effects.
This multilateral marketplace won’t just empower the individual—it’ll empower entire communities. In this future, banks will finally get to play the role they were meant to, as guardians of prosperity for the communities they serve.
The future of digital banking and personalization
Banking executives have been talking about digital transformation for over a decade now. As it so happens, they’ve also been walking the walk. From 2015 – 2019, the big banks have spent about $1 trillion on new technology to increase their digital footprints.
Rizwan Khalfan, Chief Digital and Payments Officer at TD Bank, joined us to discuss how banks are using personalization to create experiences that empower customers.
At TD, personalization and connected experiences are absolutely critical to our success in the marketplace. Personalization is about empowering customers. It’s not just about the big moments, either. It’s about real-time, in-the-moment engagements all the way up to the big milestones in an individual’s life.
Today, providing a personalized experience often comes with a tradeoff. Privacy and security. This is called the privacy paradox, and it’s likely to become an even bigger issue as data privacy regulations continue to tighten.
Overcoming the privacy paradox
No bank should have to decide between deploying personalization and protecting consumer privacy and security.
That’s why, like so many other financial institutions, TD is already delivering those rich, contextual experiences consumers want, without making any compromises. And they’re doing it by partnering with fintechs and new market entrants who already have those capabilities.
Five years ago, everyone thought fintechs were out to eat big banks’ lunch. Now, they’re breaking bread together.
Getting personal with customers over your digital channels means reevaluating privacy as a value exchange. In this new paradigm, the consumer decides whether they want to share personal information, and if so, how much. That means the return has to be worthwhile. This level of equitability reflects real-life interactions, where your frontline employees are expected to deliver as much value as possible every time they engage with customers.
The more value you can exchange at each touchpoint, whether it happens online or offline, the more meaningful your relationships become—enabling you to build trust with your customers.
Our big differentiator is the trust we have with our customers. They should never have to make a tradeoff between trust and convenience. That’s why we have to up our game from a convenience perspective. That means reevaluating how we serve our customers and the quality of the experiences we deliver. We are an experiential brand, and we have to continue raising the bar on how we deliver experiences. In the last few years, it’s been all about how we leverage and incorporate data to design experiences that are truly differentiated in the marketplace, and removing any friction points that exist there.
Bridging the trust gap
Not to be the bearer of bad news, but we are currently in the middle of a trust crisis—and it’s costing businesses. While banks have typically enjoyed high levels of consumer trust, thanks to market-leading security practices, they’re still feeling the pain.
Right now, banks risk losing 5% of revenue if they don’t address the trust deficit. In our Digital Banking Summit Series, Alan McIntyre, Senior Managing Director for Accenture Banking, noted a couple steps banks can take to build trust today:
- Put long-term relationships before short-term profitability
- Change your approach by shifting from a “gotcha” mentality to one that emphasizes win-wins
- Start driving value from your data with personalization
- Engage in digital conversations instead of broadcasting
COVID-19 has already pushed financial institutions in the right direction. Some have revised their communications strategies to be more transparent with customers, while others are providing interest-free overdraft, loans, and mortgage holidays.
By acknowledging the real pain that customers are going through and offering practical solutions, these organizations are positioning themselves as heroes and that’s opening up opportunities for banks to become trusted advisors.
If you’re recognized as a trust-based institution, as an institution that does the right thing for its customers, as a bank with purpose, then it drives net new customer acquisition. We’re seeing it with the challenger banks. It comes from customers sharing that these institutions have their best interests at heart.
Want to dive deeper into this edition of our Digital Banking Summit Series? Feel free to check out the recording below.
