Tuesday 9 March 2021

Banking Consumer Study: Making digital more human

MANAMA, January 7, 2021

Under the pandemic hit, consumers had to use their bank’s digital channels, as a result of which 50 percent of consumers now interact with their bank through mobile apps or websites at least once a week, compared to 32 percent two years ago, a report said.

This sudden increase in digital adoption is both a blessing and a curse for banks, said professional services firm Accenture in its “Banking Consumer Study: Making digital more human” report.

 Although it is efficient and has dramatically advanced most banks’ digital agendas, the lack of human connection poses the risk of banks weakening their already tenuous personal and emotional connection with customers.

This could make banking more commoditized and price-driven, and hamper banks’ efforts to shore up customer trust – which has been waning for years and is critical to their ambition to grow revenue through personalized advisory services.

While it's obvious that Covid-19 has changed consumers' banking behaviours, it's still a mystery which new behaviours are permanent, and which will revert when normality returns. There's no dispute, however, that to remain relevant banks need to understand and then embrace how customers are feeling and acting.

To help make sense of who's doing what, Accenture's Banking Consumer Study identified four key consumer personas based on traits like comfort level with technology, willingness to share personal data and preferences for interacting with banks.

The four groups are the Pragmatists, Traditionalists, Pioneers, and Skeptics.

Pragmatists: Trusting and channel-agnostic
Traditionalists:  Value human touch and avoid tech.
Pioneers: Tech-savvy risk takers.
Skeptics: Tech-wary, generally unsatisfied with their financial service providers.

Consumer trust is failing—but banks can win it back

One thing all four of these consumer personas have in common is that their trust in banks is failing. It was declining even before Covid-19, but the pandemic has made things worse.

But it's not all bad news. Despite a broad cross-industry decline, banks are still some of the most trusted institutions. And while the migration to digital can threaten customer loyalty, it also can lead to new opportunities. Growing consumer interest in digital payments is an opportunity to increase touchpoints and stay relevant in consumers' daily lives.

The shift to digital channels is unlikely to be reversed altogether once Covid-19 is defeated; neither banks nor most of their customers would want that. To benefit from the efficiency of digitalization while guarding against the threats it poses, banks should infuse humanity and personalization into their digital channels.

For the best chance of success, Accenture recommends these five principles:

1. Understand the shift in expectations
Determine which changes in customer behaviour are temporary and which are likely here to stay.

2. Recognize your customer base
Examine the distinct needs and expectations of your customer segments.

3. Determine your strategy
Develop a strategy and operating model to respond to the market changes that are likely to endure.

4. Prioritize technology investment
Acquire technology that improves your flexibility, agility and speed to market.

5. Infuse a human touch
Embed humanity and personalization into digital channels where they will have the most impact.

The steady ascendance of digital banking needn’t be a threat – handled wisely, it’s an opportunity to forge strong customer relationships, build trust and ultimately drive growth. – TradeArabia News Service


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