How to Move Older Customers to Digital Banking Channels

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The Covid-19 pandemic altered how Americans conduct financial transactions, with many making a permanent shift to digital channels.

However, one age group still is a holdout. Baby boomers, ages 58 to 76, didn’t flock to digital channels, especially mobile banking, at as high of a rate as younger cohorts, according to the American Bankers Association. This demographic is still more likely than younger generations to conduct transactions at bank branches.

Of course, in-person banking fosters engagement and drives loyalty. But by not using digital channels, banks miss an opportunity to unlock the value of this high-engagement, high-balance demographic. Forward-thinking banks recognize that the era of the sleepy “senior account” and frequent branch visits is in decline. Rather than let these customers tell you that they’re fine with coming into a branch for all transactions, banks should take steps to help their older customers take advantage of technology that turns service costs into potential growth.

Focus on Safer, Not Easier
Older adults who use online banking are much more likely than younger adults to be concerned about security, according to a survey from Lightico. Banks should make the case to older customers that digital banking channels are secure and can provide a safer banking experience.

Provide staff with talking points in simple language about the layers of protection your financial institution uses to keep customers’ sensitive information safe. Create a list of the security benefits of online banking that staff can share with older customers, such as:

• The ability to check accounts at any time, rather than waiting for a monthly statement.
• The ability to pay bills online and set up automatic payments to prevent checks from getting lost or stolen in the mail.
• The ability to set up notifications of transactions, such as a low account balance or large withdrawals.

Some banks even choose to use digital platforms to provide an additional level of protection for older customers. These services can monitor accounts 24/7 and alert account holders to unusual transactions, signs of fraud and even money mistakes that are common among older adults

Highlight Digital Controls
Staying in control of their finances often is a top concern that older adults have about aging. One way banks can encourage older adults to move to digital banking channels is by highlighting how digital access keeps them in control over their finances. Rather than reconciling checkbooks with account statements each month, they can check their account balance at any time. They can stay in control of bills by setting up automatic payments to avoid late or missed payments or involving others to help with getting payments in the mail.

If they want to gain even more control, encourage them to simplify their financial lives by consolidating accounts that they have at other financial institutions into accounts they have at your bank. Then they’ll just need one password to log on and get a complete picture of their finances. Digital channels are critical to meeting the strong desire of older adults to remain independent.

Digital Doesn’t Replace Humans
Your older customers might be reluctant to adopt digital banking because they enjoy interacting with “their person” at the bank. Banks should emphasize that online and mobile banking isn’t meant to replace in-person banking or their personal relationship in the branch. Rather, these digital tools give relationship managers more ways to help them, from fraud detection and oversight to issue resolution.

Too many banks pitch digital channels as “convenience.” However safety and control are the drivers of digital conversion and engagement for this demographic —and even a potential bridge to acquire their tech-friendly children as new customers.

5 Strategies for Creating a Seamless AI Experience

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The broad adoption of digital channels has been accompanied by hiring challenges for banks that often struggle to adequately staff their service channels and branches. This leads to an urgent drive to adopt virtual assistants and chatbots as a way to provide better and more comprehensive service options to their customers.

This comes at the same time as the Consumer Financial Protection Bureau surveys the experience of digital chatbots and virtual assistants at big banks. This is likely due to poor perception the consumers have of chatbot-based service.

Bank executives must balance the need to provide self-service, always available options without alienating consumers with sub-optimal experiences. But there are several simple strategies that can go a long way in achieving the best of both worlds, making AI-boosted customer experience truly seamless.

To start, consider some reasons behind this poor perception. Many virtual assistants and self-service experiences try to replace humans, containing the customer without escalating the conversation to a human service member. This can lead to overly eager assistants persistently asking customers to rephrase their query or choose from a slate of options. In the worst case scenario, virtual assistants emulate humans with the aim of fooling the customer — resulting in greater frustration when this illusion is shattered. Another common source of frustration are virtual assistants that ask a lot of questions before routing the customer to an appropriate human service member, just to have those same questions repeated by the human agent.

All these examples show how a virtual assistant makes it more difficult for customers to accomplish their goal, rather than simplifies it, and increases the customer’s required effort.

The key to improving the customer experience, while getting the benefit of self service, is to make the virtual experience seamless: help the consumer when possible and get out of the way otherwise.

Here are five practical suggestions to make your bank’s virtual assistant experience seamless, leading to happier and more satisfied customers.

  1. Make it clear to your customers when they are interacting with a virtual assistant versus a human. This helps set consumer expectations and helps develop trust in the service. Consumers may choose to use shorter, direct questions, instead of more verbose communication they would normally use with humans.
  2. Always provide an option for customers to bypass the virtual assistant and connect to a human. Customers can typically tell whether their question is something simple that can be answered by a virtual assistant, or something more complex that requires human intervention. Providing an option to engage with a human when customers choose allows them to self-select into an appropriate path and delivers an experience that’s better adopted to their needs.
  3. Where possible, make it clear the limitations of the virtual assistant up front. For example, certain types of disputes and fraud-related questions might not be able to be handled by the virtual assistant; letting the customer know up-front helps them understand any possible limitations.
  4. Remove repetitive questions from the virtual assistant-to-human transfer process. If questions are needed to better route the customer, take care that they don’t overlap with verification and authentication questions that the human would ask after the transfer. Answering the same questions over and over gives the impression that customers aren’t heard; changing the questions leads to a more seamless transfer.
  5. Supplement any off-hour self-service queries with follow-up options. In cases where a virtual assistant is not able to help the customer solve their issue or it requires human intervention, your institution can offer to follow up on their request and leverage the virtual assistant to collect the relevant information rather than force the customer to repeat the process or switch channels. This gives customers an impression that they’re valued and worthy of additional follow-up to solve their issue.

When surveying your customers on their experience in a hybrid customer service journey, it is crucial to consider the entire experience and not just focus on one pathway or channel. Ultimately, great human customer service will not be sufficient to offset an unpleasant experience in a self-service setting or vice versa. Getting a full picture is crucial to understanding consumer pain points for improvements.

Mobile Deposit Penetration Key Indicator of Readiness for Digital Transformation

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Banking is being dramatically transformed by digital and mobile technologies. The widespread proliferation of smartphones, with their sophisticated cameras and mobile capture capabilities, creates a valuable opportunity for banks to shift both their retail and commercial customers from the physical banking habits of the past to new, digital channels—which can increase customer loyalty and save banks billions of dollars in operating costs. According to research by Bain & Company, branch visits are expensive for the bank, at an average cost of $4 to complete the same transaction that would cost about 40 cents if done through a mobile channel, and the branch traffic that persists today is dominated by routine transactions that could easily be transitioned to digital. As much as 8 percent of branch visits are simply to check an account balance, and a whopping 31 percent are to deposit checks.

Clearly, U.S. banks have a tremendous opportunity ahead of them if they can migrate more of their consumer and commercial customers from high-cost branches to self-service mobile channels for routine transactions. Mobile deposit technology can provide a strategic advantage by helping banks accelerate this migration. It has long been understood that mobile deposit is one of the most powerful options available to financial institutions for driving increased adoption of all mobile banking services.

Forward-thinking banks, analysts and investors are all recognizing the role that mobile deposit plays as a key indicator of a bank’s readiness for the digital future. That’s why banks like Bank of America Corp. are now reporting their mobile deposit growth rates in their quarterly earnings reports. They understand that demonstrating growing mobile deposit penetration indicates to investors that they are not only on the path to digital transformation, but that they also have the type of mobile-first customer base that every bank wants.

It’s not just consumer banking that can benefit from shifting transactions towards mobile. The commercial side of the business has a major opportunity to increase mobile banking services with mobile deposit as well. Paper checks remain the dominant form of payment for many businesses. A full 97 percent of small businesses still rely on paper checks to make and receive B2B payments, and according to the Federal Reserve, more than 17 billion checks were circulated in 2015. Yet, too many banks continue to rely on outdated practices, providing proprietary hardware to their commercial clients for scanning checks or simply expecting businesses to visit a branch or ATM to make their deposits. By leveraging commercial mobile deposit technology, businesses can batch deposit multiple checks using a mobile device faster than they can via a typical single-feed scanner. As the research firm Celent puts it, “mobile is the new scanner.” Celent also states that banks have an opportunity for 10 percent annual revenue growth over the short term by transitioning more of their commercial customers to mobile deposit.

To help transition both consumer and commercial customers from the physical banking habits of the past to the more mobile, self-service model of the future, banks must provide a superior mobile user experience. The research firm Futurion Digital conducted a thorough analysis of the mobile deposit user experience at 15 of the top U.S. banks and discovered a direct correlation between the quality of the user experience and adoption rates for mobile banking services. Banks that want to increase customer usage of their mobile banking applications would be wise to review the best practices and recommendations identified in the report in order to better position themselves against their peers.

In short, as physical branches become less important to a bank’s consumer or business banking strategy, transitioning customers to digital channels will be critically important to ensure they still have access to the services they need. Doing so can actually help banks increase customer loyalty and save billions of dollars by moving routine transactions to lower-cost, self-service channels. As one of the most popular features among mobile banking services, mobile deposit plays a strategic role in enticing customers to adopt all mobile banking services, and a bank’s mobile deposit penetration rates serve as a key indicator of its readiness for digital transformation. By focusing on delivering a superior mobile user experience and actively engaging with customers to help them make the transition to mobile, banks will be well-positioned for the future.