In Money Summit’s recent post “Do You See Disruption or Opportunity?" Bradley Leimer summarizes his experience at this spring’s Finovate conference and gives his insight into how this year’s presenters are impacting the future of financial services. Leimer says Finovate presenters mainly showcased incremental changes, but that these small improvements are collectively causing a massive shift toward digital financial tools.
So as the financial services landscape continues to change, Leimer asks, do you see this as disruption or opportunity? While it’s true that technology is drawing account holders away from traditional banking methods, it doesn’t mean that it will draw them away from you. Financial institutions can remain relevant by focusing on the opportunities that this digital shift presents:
1. Attract New Account Holders
As Leimer mentions, modern technology is impacting consumer behavior and expectations. Account holders need convenient services that mesh with their digitally-driven everyday lives. The question is, will they find it with you, a competitor institution, or a non-industry player? In his article Leimer writes,
“We are now face-to-face with an engaged customer base that expects a completely frictionless experience…The future of financial services will be won by removing traditional barriers and rapidly embracing the shift in consumer and business behavior.”
Bank of America embraced changing consumer behavior by being the first to launch mobile banking on the iPhone, earning them a quarter of a million new account holders who joined specifically to use the mobile app. Other financial institutions can employ this strategy by adding digital services to differentiate themselves from competitors.
2. Remove Friction
When account holders’ needs aren’t being met, this causes friction in the relationship and may cause them to start looking elsewhere for financial services. Millennials in particular seek financial innovation. According to Scratch’s research on millennials, most don’t see the difference between their banks and others, and 73% are looking to innovators outside the industry, like Google or Amazon, for new financial services. However, financial institutions can combat this attitude by offering a digital banking experience account holders crave to help them manage their finances.
In recent years a lot of buzz has been built around becoming account holders’ primary financial institution – the hub for all financial interactions. Leimer theorizes that in the future this goal will be taken a step further, to becoming the primary financial application. This means that the best digital solution, rather than the most popular institution, will draw account holders in the future. The key is providing a solution that empowers account holders to be more engaged in their finances.
3. Develop Deeper Customer Relationships
While the move to digital channels gives account holders new banking options, it also presents an opportunity to build deeper customer relationships. Technology allows financial institutions to be closer to their account holders than ever before, by creating more opportunities for interaction.
Financial decisions are often stressful for account holders, and institutions must build trust if they want to be a part of the process. In this digital era of banking the way for institutions to prove that they have account holders’ best interest at heart is to provide convenient solutions that help them take control of their finances.
In our constantly shifting digital world, financial institutions must understand and address changing account holder needs if they want to remain relevant. We believe the best way to do that is to provide a digital banking experience that meshes with account holders’ fast-paced lives. So the question stands, will you dwell on the inconvenience of disruption, or take advantage of the opportunities technology offers to engage account holders in their banking experiences?