The global pandemic saw banking technology and customer service rapidly adapt to survive a time when the world had to shelter at home. Since then, the financial services industry has made considerable strides forward toward recovery. Before examining the trends to watch in 2022, here are some factors that are influencing change.
Major factors influencing change
What we see is not just spurred by rapidly evolving technology. Banks have spent the last year driving further digitization of their core services and products and are in a better position to move forward with confidence in their tech stack and digital offering.
There is a parallel to the situation faced by the oil retailing industry in the 1980s as they rolled out self-servicing pumps on forecourts. The oil industry shifted to make the most of this distress purchase by cross-selling other products, such as groceries, on the forecourt.
Mobile banking apps have similarly automated tedious tasks and now need to shift gear to drive customer engagement and awareness of benefits and services from their banking relationship.
The pressure is on to provide customers with hyper-personalized digital experiences that foster loyalty and connection. McKinsey’s research shows that since the pandemic, 75% of consumers have sampled new brands and services, with 60% expected to adopt the brands into their lives as we emerge from the pandemic.
The writing is on the wall – banks must enrich the digital experience or risk losing market share to competitors. Barclays UK CEO, Matt Hammerstein, commented at the recent MoneyLIVE Festival in London that some fundamental truths still apply to the evolving industry. It is inherent in our nature to crave social interaction, and the digital banking experience is no different.
“To truly win trust, we need to balance digital banking with human support” – Matt Hammerstein, Barclays UK CEO.
Finding this balance between technology and human interaction will be a key factor going forward.
Digital banking trends for serving customers in 2022
1. Getting hyper (personal)
When it comes to banking apps, the move from trigger campaigns to mass personalization is now passé. With daily interactions around online shopping and streaming services setting the precedent, customers have been educated to expect hyper-personalization. In addition to this, attention spans have reduced to less than 8 seconds, with everyone competing for customer focus in an increasingly saturated online environment.
Banking platforms and apps are a long way from being able to offer the same level of digital experience as Netflix. In 2022 the need for hyper-personalization will prompt banks to try and create the same type of connection between end-users and data.
Flybits is an example of an embedded service that unifies and contextualizes your app experience. Based on device data, card spending, and partnership data, the AI-powered solution can provide tailored experiences to build customer awareness of benefits, services, and loyalty programs.
2. Combine what humans and machines do best
Matt Hammerstein referenced the need to find balance in what machines and humans do best. Banks that can offer world-class digital services and equally intuitive human support will be positioned to win trust in the market.
New research from Forrester and sponsored by Xerox iterates this sentiment: a human touch is still high in demand.
Achieving this desired level of human interaction won’t be without its challenges. Many institutions are in the process of reducing their physical branch space and presence to reduce costs. For this reason, it becomes all the more clearer that using data to build emotional connections with customers through contextualized experiences is critical.
3. Use data for IDV
The way Identity Verification (IDV) and Know Your Customer (KYC) checks are carried out is being challenged by new digital onboarding practices observed by many fintech players. These new players leverage technologies that cross-reference data on voting lists, bureau data, as well as delivery and subscription records.
Digital IDV systems can be put in place to verify customers’ official documentation lodged in accredited databases almost instantly. This goes a long way in streamlining and speeding up the points between application and approval for consumers.
4. Keep my data safe & secure
The shift to digital has prompted people to think about privacy protection and ownership of their own data. In banking, consumers are concerned about how their data is accessed and shared between institutions.
This is where banks can take the helm and earn consumer trust. New initiatives that can encrypt and tokenize data to predict, associate, and cluster information are entering the market.
Now, customers never have to reveal their information. Instead, a context plugin draws insights from various touchpoints, including transaction history, location, sensors, and strategic use-case partnerships.
5. A move to measure experience-driven metrics
With the overhaul of traditional banking systems and digital customer experience coming to the fore, banking institutions will need to duly adjust their success metrics. Tomorrow’s banking leaders will need to focus on experience-driven metrics as a way to gauge performance.
Because all roads lead to customer engagement, metrics will need to consider more than just operational efficiency. It will be a case of getting customer feedback through app ratings, user recommendations, and comments.
Net promoter scores, reasons for contacting support, active customers, lifetime value, and app retention rates will also be key for evaluating efficacy. By measuring these modern metrics, banks will be better set to serve the needs of the market.
Building relationships through hyper-personalization on digital channels is arguably top of the list of digital banking trends in 2022. Combining this with efficient systems and advanced platforms will separate the mundane banking institutions from the successful ones.