At the recent Bank Customer Experience Summit, held in Chicago from September 13 to 15, four financial experts shared insights on how to succeed in various areas of digital banking.
The experts addressed the following four themes: the importance of data in the financial world, the significance of innovation, the problem of the underserved, and the way digital tools can help with financial coaching.
All agree that digital banking is here to stay, but doing it properly requires the correct practices and tools.
On the first theme, Tom Long, founding manager of New Hampshire-based The Long Group, emphasized the importance of data. The financial institutions that succeed, Long said, will be those that know how to capitalize on data. One way that banks can use data is to properly segment customers in order to respond more effectively to their needs.
For example, banks can group customers as either transactional—those who use the bank only for single transactions; or relational—those who use the bank and its services on a regular basis. Overall, banks would have a greater chance of succeeding with the second group when upselling services, Long said, so banks would do well to focus such efforts on relational customers. Long’s organization is a business sector industry thought leader, known for building performance benchmarks and providing business intelligence and guidance for more than 25 years.
The theme of innovation was addressed by Corey LeBlanc, co-founder, as well as concurrent chief operating officer (COO) and chief technology officer (CTO) of the newly formed Locality Bank IO, a Florida-based digital-first bank focused on serving small- and medium-sized businesses. LeBlanc cited Walt Disney, who he said made sure all rides at Disneyland worked properly and sported impeccable looks. Banks should follow the same example of excellence with their services, he added, especially because customers today have lofty expectations of a brand’s digital capabilities. To keep up with customer expectations, banks should take control of their digital roadmap and not be afraid of setbacks.
Technology, LeBlanc added, does not jumpstart innovation. Instead, innovation occurs by bringing leadership on board. And if management provides good leadership on innovation and puts in place the proper infrastructure, banks can then begin to innovate.
The problem of the underserved, the third theme, was tackled by Lamine Zarrad, senior vice president at ZenBusiness, the Texas-based venture-funded public benefit company with a stated mission of helping everyday Americans become entrepreneurs. Zarrad said structural, as well as behavioral problems, keep people underbanked. On the structural side, many people simply do not have a bank in their community. Behavioral issues, however, explain why others choose not to enter a bank, feeling unwelcome and intimidated by the architecture or atmosphere of a place.
The way to handle these problems, Zarrad added, is to use digital tools, such as smartphones, to deconstruct risk ecosystems and reach customers. And because most of the world has access to smartphones, digital banking tools can reach them in ways that traditional services cannot.
The final theme at the conference, on how digital tools can help with financial coaching, was taken up by Evan Siegel, vice president of financial services and artificial intelligence (AI) at eGain, a California-based software company that provides a digital customer engagement suite of applications for customer service and analytics. On one level, millennials and Gen Z customers—essentially, anyone born after 1980—do not go to banks or their branches for service, instead relying on the digital tools of financial institutions to interact with them, Siegel noted. However, financial coaching often happens only at the branch level, presenting a problem to financially challenged customers who may not want to use the service due to feelings of embarrassment or fear of being upsold services that they do not need. One solution, Siegel said, is to use something like eGain’s virtual coach, which can provide advice tailored to an individual customer, but is anonymous in nature, sparing customers any user embarrassment. The approach also works among the younger set, which has expressed a willingness to talk to virtual coaches for financial advice.
Author Information
Alex is responsible for writing about trends and changes that are impacting the customer experience market. He had served as Principal Editor at Village Intelligence, a Los Angeles-based consultancy on technology impacting healthcare and healthcare-related industries. Alex was also Associate Director for Content Management at Omdia and Informa Tech, where he produced white papers, executive summaries, market insights, blogs, and other key content assets. His areas of coverage spanned the sectors grouped under the technology vertical, including semiconductors, smart technologies, enterprise & IT, media, displays, mobile, power, healthcare, China research, industrial and IoT, automotive, and transformative technologies.
At IHS Markit, he was Managing Editor of the company’s flagship IHS Quarterly, covering aerospace & defense, economics & country risk, chemicals, oil & gas, and other IHS verticals. He was Principal Editor of analyst output at iSuppli Corp. and Managing Editor of Market Watch, a fortnightly newsletter highlighting significant analyst report findings for pitching to the media. He started his career in writing as an Editor-Reporter for The Associated Press.
