11 digital banking commandments you’ve never heard 100 times before

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The problem with conventional wisdom is that it’s always changing. Blindly following conventional wisdom never produces a straight path, and rarely results in the desired destination. This explains the billions of dollars that banks and credit unions invest each year in failed digital transformation initiatives.

A painful digital reality:

The truth is, conventional wisdom cannot reliably get you where you need to go, but learned wisdom can. It comes from trying and failing, and finding out firsthand what works and what doesn’t. The wisdom learned takes time and can be painful.

Having had the opportunity to partner with hundreds of leading financial institutions, my learned wisdom on what works overall for these institutions can be summed up in the following 11 digital banking commandments – sometimes unconventional rules. that financial institutions should follow to improve the results of their digital transformation initiatives.

I hope these commandments will be invaluable in shaping your digital strategies because, to paraphrase one of my favorite movie quotes, “these go to eleven”.

1. Digital Lift-and-Shift is not a strategy!

Digital transformation should be seen as an opportunity to build something fundamentally new. It means using modern platforms and software to improve your banking experience across all channels. You can’t just take analog assumptions or digitize a legacy paper process. Take this opportunity to completely reinvent things.

Consider the process of opening a digital account. Why do we need a form? Would it rather be an interactive chat with a virtual assistant? You can collect relevant information as the conversation progresses while making it enjoyable and personalized by responding in context.

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2. Friction is not inherently good or bad

Unintentional friction in the customer experience is always bad. However, well-designed friction points can be extremely helpful in managing risk and can actually make people feel safe. This means using data analysis to apply the appropriate amount of friction based on the level of risk.

Small UX improvements (like real-time address lookup) can have a big impact on the customer experience. An incorrect customer address presents little real risk of fraud, but verifying it or forcing customers to retype their address adds unnecessary friction to the process. Instead of having customers enter each piece of information manually, streamline the data entry experience by making suggestions in real time, which also reduces errors.

3. Be pleasant in this impersonal channel

Personalization isn’t about selling products – it’s about making customers feel comfortable and valued in every interaction they have with you. As a financial institution, you already have enough customer data to make subtle adjustments that can create a better experience.

Be enthusiastic and make customers feel like they are making a good choice by opening your app. Use location data to say “Hello! Or “Good afternoon!” according to the time zone where the customer is located. A simple personalization that is prominent is the digital equivalent of a cashier giving you a big sign and a smile as you walk into the branch.

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4. Respect the data

You ask a lot of information from customers. Respect the fact that they are sharing their data with you by actually using it to provide a better customer experience.

Bringing multiple accounts together in a unified view and sharing information with customers creates engagement. Yes, it does take work to pull data from different silos for an integrated view, but it’s worth it and the cost. Constantly re-evaluate the UX in order to add new features and meet higher levels of customer expectations.

Pay consumers for their information:

The data that people share with you, explicitly and implicitly, is an asset. Show customers that you appreciate it and that you are using it to provide them with value in return.

By providing information frequently and in granular detail, you provide a level of transparency and awareness that customers are now looking for.

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5. Engage them, teach them, feed their TikTok obsession

Consumers want to be in control of their financial lives. They want content that will teach them how, but they have very high standards. What can financial institutions learn from TikTok? It has a tight set of constraints that forces you to create content that is fast, compelling, and easy to understand.

It is not easy to create enjoyable financial services content, but support matters a lot. Videos should have a lot of movement and good visual examples grab your audience’s attention – and don’t be afraid to add some music!

Also, make sure your content is easy to like, comment on, and share. You want customers to engage, and shorter videos give them a reason to come back and watch more. Create content not only to educate existing customers, but also to use it as a larger opportunity for organic growth.

6. Use your branch wisely!

In 2019, 83% of American households with bank accounts visited a branch at least once in the past 12 months. This suggests that the branch’s role as a place to resolve critical issues or obtain advice remains important, even as its role as a transaction center diminishes.

Don’t reverse the priorities:

Branches can be a differentiator, but only if they are used to serve your customers’ goals rather than your own.

You don’t want to get rid of all your branches, especially now that Covid-19 vaccines are more and more available. Branches continue to provide security and convenience, and they are a way for banks and credit unions to build trust. The challenge is to make the most of the branches you have.

7. Respect their time and match their efforts

“Going digital” is not about streamlining interactions as much as possible. It is about optimizing each interaction so that the value the consumer derives from it is proportional to the time and effort he invests. When customers interact with your bank, use the data from that interaction to better understand them and provide them with personalized and actionable insights.

Start with fruits at your fingertips as you tackle opportunities that add value to customer interactions but don’t require a lot of extra work or expense on your part. Bringing actionable information up, like your customer’s updated credit score, is an easy way to add value to a routine interaction.

8. Harass them … but only when they want to

Transparency and control are essential concepts when it comes to managing money. The definition of consumer harassment in financial services is very different from what it is in other industries. By providing simple notifications, you can keep customers up to date with important changes to their accounts.

When it comes to money, people want to know what’s going on. Timely communication, through the right channels, allows them to feel in control. Give your customers the power to decide how often you’ll communicate with them by allowing them to set notification limits.

9. Be fascinated by your customers (not by your technology)

It’s easy to make the mistake of assuming that your customers or members care as much about your technology as you do. But they really don’t.

The most sophisticated digital technology cannot replace obsessive focus and knowledge of your target customers.

Invest in technology by helping consumers achieve a better, more personalized experience. Show you know who they are and what they want.

Don’t let the muscle of your customer experience weaken – focus on showing people that their experience has improved, rather than explaining how or why.

10. Make people feel safe

As stated earlier, bank branches will never go away completely, and that’s partly because they engender a certain level of trust for many customers.

Remember this base:

Confidence in financial services, at a fundamental level, is about security. You need to find digital ways to replicate this sense of comfort and security in all of the small digital interactions your institution has with consumers.

Use digitalization in a way that continues to build your customers’ trust in your financial institution. (A little friction in the service of security can help achieve this.) Remember, people bank with you because they trust you, and digitization shouldn’t change that.

11. Come together like a symphony orchestra

The best digital transformations result in data, systems, and processes all working together like a finely tuned orchestra. It’s painfully obvious to people when a digital experience is disjointed – they can see the seams. You need to invest in integration and orchestration. Testing is essential. Sweat the details!

“Only those who have the patience to do simple things perfectly will acquire the skill to do difficult things easily.” – Friedrich von Schiller

Realize that your institution is boarding a long-distance train

The digital transformation never stops. People’s expectations change, new competitors emerge, and existing systems and processes age as new channels and devices emerge. Success requires continuous reinvention, adaptation and a willingness to experiment.

Banks and credit unions no longer compete on product, but on experience – and today’s consumers compare their banking experience to that they get from companies like Apple and Uber.

While the dangers of a bad investment in digital infrastructure remain, it is a transformation your financial institution needs to undertake… and sooner rather than later. Fortunately, advancements in technology are making it increasingly feasible to digitize your operations in a way that supports your institution’s strategic goals, provides your clients with an exceptional experience, and increases your bottom line, especially if you stick to these guidelines.


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About Joan Ferguson

Joan Ferguson

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