6 Tactics to Win Customer Engagement

One topic that’s commonly discussed in financial institution boardrooms is how to serve customers and meet their expectations. This topic is especially pertinent now that consumer expectations are at an all-time high.

Bank consumers want delightful, simple customer experiences like the ones they get from companies like Uber Technologies and Airbnb, and they’re more than willing to walk away from experiences that disappoint. As a result, financial institutions are under immense pressure to engage and retain customers and their deposits. Bankers cannot afford to stand idly by and watch a generation of customers increasingly lean on fintechs for all their financial needs.

Fortunately, your financial institution can take action to win the battle for customer engagement — some are already doing so with initial successes. Incumbents like Bank of America Corp. use financial assistants powered by artificial intelligence to assist customers, and fintechs such as Digit offer an auto savings algorithm to help people meet their financial goals. These efforts and features bring the disparate components of a consumer’s financial life together through:

  • An intense focus on the user experience.
  • Highly personalized experiences.
  • “Do it for me” intelligent features.
  • The right communications at the right time.
  • Intuitively-built and highly engaging user interfaces.

How can your bank offer experiences like these? It comes down to equipping your financial institution with the right set of data and tools.

1. Data Acquisition: Data acquisition is the foundation of customer experience.
The best tools are based on accurate and comprehensive data. The key here is that your bank needs to acquire data sourced not only from your institution, but to also allow customers to aggregate their data into your experience. The result is that you and your customers can see a full financial picture.

2. Data Enrichment: Use data science to make sense of unstructured data.
Once your bank has this data, it’s critical that your institution deploys an enrichment strategy. Advanced data science tactics can make sense of unstructured and unrecognizable transaction data, without needing to add data scientists to bank staff. Transforming these small and seemingly unimportant bits of the user experience can have a huge overall effect.

3. Data Intelligence: Create personalized and timely user experiences from the data.
By consistently looking at transactional data, data intelligence tools can identify different patterns and deliver timely, unique observations and actionable insights to help consumers improve their financial wellbeing. These are the small, but highly personalized user experiences that fintechs have become known for.

4. Data Productization: Provide a user interface with advanced pre-built features.
One of the most difficult things for a bank to pull off is data productization. The right tooling and advanced, pre-built features allow banks to unite data and analysis and encapsulate it into intuitively designed digital experiences. This way, consumers can engage naturally with your bank and receive relevant, personalized products and services they need from you. Digital notifications can be part of your strategy, and many customers opt in to receive them; case in point is that 90% of the customers using a Goals-Based Savings application from Envestnet opt into notifications.

5. AI Automation: Utilize AI to enhance self-service capability.
Wouldn’t it be nice if you could ask someone to cancel a check at anytime? Or type in a question and get the answer on the spot? Tools like AI-powered virtual assistants with an automation layer make it simple for consumers to do all this and more, wherever they are. Financial institutions using the Virtual Financial Assistant from Envestnet have automated up to 87% of contact center requests with a finance domain-specific AI.

6. Trusted Partners: Leverage partner to compete.
Competing with fintechs often means, “If you can’t beat ‘em, join ‘em.” But leveraging trusted partners is a tried and true strategy. Your bank’s partner could be a traditional financial institution you’ve pooled assets with to create and embed financial technology deep into your experience. It could be a fintech focused on business-to-business capabilities. Or it could be a partner offering world-class data aggregation as well as analytics and innovative tools to enhance your customer experience.

Fintechs have done a phenomenal job at connecting the disjointed components of consumers’ financial lives through amazing customer experiences. Your financial institution can do the same. By using the right data and tools and partnering up, your bank can deliver the personalized experiences consumers expect, delight and empower them to take control of their finances and future.

5 Ways Banks Can Keep Up With Consumer’s Digital Demands

As technology progresses, more financial institutions will face scrutiny from consumers seeking features powered by advanced digital banking platforms.

Consumers are actively searching for banks that value them by giving them remote, customized experiences. Many banks have seen record growth in digital banking usage in recent years, according to a Deloitte Insights report. While this might create a challenge to many financial institutions, it can also be an opportunity to further build relationships with consumers. Below are five things banks should do to proactively respond to customers’ digital needs in their next stage of growth.

1. Analyze Consumer Data
Gaining real-time insights from consumer data is one way banks can start improving customer experiences. Analyzing data allows banks to see how, when and where consumers are spending their money. This data is a gold mine for creating custom approaches for individuals or recommending products that a consumer could benefit from. This electronic trail of customer information can ultimately lead to more personalized financial strategies, better security features and more accurate insights as to what digital banking features will be needed in the future.

2. Humanize The Digital Experience
Financial Institutions are being given a chance to humanize their digital banking platforms. Banks can build and strengthen relationships with their consumers by customizing their mobile experience — right down to the individual. Listening to feedback and valuing a customer’s experiences can create productive and useful relationships. It is important to take a customer-centric approach, whether in-person or through digital platforms. Financial institutions can use consumer purchase history to create custom reward offerings — like 10% off at their favorite coffee shop or rewards on every purchase — that lay the foundation for a bespoke, valuable experience.

3. Understand Digital Trends
According to Forbes, 95% of executives say they are looking for new ways to engage their customers. Financial institutions that remain complacent and tied to their legacy systems can expect to fall behind their competitors if they do not keep up with advancing digital trends. Consumers increasingly shop around and compare account offerings and benefits; they are choosing customizable, digital solutions. Banks that don’t, or refuse to, keep up with digital trends will lose these relationships. As technology expands, so do the needs of consumers —it is up to banks to keep up with those needs.

4. Utilize Advance Card Features
Technology’s rapid advancement means that the digital features that banks can take advantage of have also advanced. Consumers want features that correspond with their everyday financial management strategies and spending. Virtual cards with state-of-the-art security features are just one of the many digital solutions available to banks. Adjustable settings, like the ability to block and unblock merchants, create family hubs, set spending limits for individuals and family members, are just a few of the ways that banks can differentiate their card programs.

5. Keep Evolving
Many banks use legacy systems that are outdated, expensive and difficult to uproot. This technology strategy holds them back from being on a level playing field with their competitors. However, partnering with fintechs that can integrate with their current systems is one way that banks can keep up with digital trends — without the upfront cost of installing an entirely new system.

According to a FICO study, 70% of U.S. bank customers report that they would be “likely” or “very likely” to open an account at a competing provider if that provider offered services that addressed their unmet needs. Today, consumers do not just prefer digital banking: They expect it. Banks that cannot provide their consumers with customizable digital options are at a disadvantage.

The Rise of the Subscription Society: Three Important Takeaways for Banks


revenue-8-11-17.pngSubscription services are spreading like wildfire with huge leaps in subscription rates. Amazon Prime saw a 22 million household jump in 12 months, with 85 million Americans currently subscribed. Spotify started in 2011 with just 1 million subscribers and now, just 6 years later, has grown to 50 million paid subscribers. Then there’s Netflix, which just announced it has over 100 million total subscribers, about half of them in the U.S.

Success like this illustrates the subscription model isn’t merely a transactional structure, but has become the way for modern consumers to purchase (i.e. access to and use of product in reasonable installment payments as opposed to buying a product outright and owning it). Banks looking to make their products more attractive to consumers can use these companies’ successes as a model for their own service offerings.

So what makes the subscription-based model so compelling?

High Value, Low Cost
Subscription models provide a high amount of value at a lower cost than purchasing a product outright.

Take Amazon Prime, for example. Members are able to gain access to a large, discounted marketplace of products, free or discounted shipping that will deliver most purchases directly to their doors in under 48 hours, access to video streaming, music streaming, book libraries and personalized recommendations for just $10.99 per month (or discounted to $100 a year if they prepay in advance). These savings not only help the consumer save but also indirectly result in the development of healthier financial habits through Amazon’s network of discounts.

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Spotify’s high value, low cost model offers the ability to pay a low monthly fee for access to unlimited music streaming as opposed to paying for each song individually or buying the DVD.

And a bank is taking notice of and acting on this subscription success. To make the Spotify subscription even more valuable, it has teamed with Capital One to reduce the monthly fee by 50 percent for 50 million potential customers, if the monthly payment source is a Capital One credit card.

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Personalized Experience
Subscription services are also usually molded around the subscriber’s habits and preferences to deliver a personalized experience. Personalization ensures value is relevant to individual subscribers, as these services usually offer a wide library of products to ensure they’re universally appealing and accommodate various consumer needs.

This is another example where Spotify delivers. The service includes a so-called Discover portal dedicated to helping users find new music they would enjoy based on their streaming history and even delivers custom playlists on a weekly basis. Netflix and Amazon Prime also create a personalized list of recommendations and display them prominently on their websites so that users are immediately greeted by a relevant experience.

Banks have tremendous access to customers to provide relevant and timely offers and personalized deliverables to encourage engagement that goes beyond just traditional transactional experiences.

Convenience and Instant Access
In today’s technology-rich culture, consumers have come to expect instant access to the services, information and products they need. The subscription model was purposely built around providing convenience and immediacy.
In the not-so-distant past before Netflix, consumers would have to visit a video store or a movie theater if they wanted to watch a title on demand. More recently, they could order movies on demand from their cable or satellite providers, but this required purchasing titles individually and was often costly.

However, with video streaming services like Netflix, consumers now have a whole library of movies and TV shows to stream on demand whenever they want and they don’t have to purchase each title separately. Instead, they have access to Netflix’s full library for only $7.99 per month, which is about equivalent to purchasing one title.

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Banks, of course, do have online and mobile banking products. What banks haven’t been able to do is fully monetize, with recurring revenue, this convenience and instant access. The next logical step is to find what new, non-traditional services can be instantly delivered through online and mobile platforms that customers will pay for.

The subscription model that delivers value, personalization and instant access can be successful for banks looking to build a more marketable brand and a larger and steadier stream of revenue. Amazon Prime, Spotify and Netflix are clearly examples of top performers of this model, but banks need to search out ways they can make their products more attractive and provide a value-rich, relevant and convenient experience for their customers.

Bold Leadership Required: Innovating From the Outside In


In this video, Thomas Jankovich, a principal at Deloitte Consulting LLP, outlines four aspects of a successful approach to innovation, including bold leaders who can make the decisions required to transform the bank and shepherd the organization through the process. He also explains the key mistake that institutions too often make.