Getting to digital while missing the point

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31 March 2016
Bob Meara

Digital banking is so hot right now – for good reason. The recently published research sponsored by the Federal Reserve, Consumers and Mobile Financial Services 2016, reported that 87% of the U.S. adult population has a mobile phone and 77% of them are smartphones, up from 71% in 2014 and 61% in 2013. Admittedly, it is getting hard to find a phone that’s not internet-enabled. But consumers are acquiring them for a reason – and it’s not telephony. The same report documented the rise of mobile banking: 43% of all mobile phone owners with a bank account had used mobile banking in the past 12 months, up from 39% in 2014 and 33% in 2013.

Digital Banking Not surprisingly then, the significant majority of US financial institutions now offer digital banking capabilities to their customers. But, most were designed to migrate transactions away from the more expensive branch channel to lower-cost self-service mechanisms. A worthy objective, but it misses the point (more on that later).

Celent has research in the field now designed to understand just how far US banks and credit unions have come in achieving digital channel adoption targets. The short (however preliminary) answer: not very far. It’s not for lack of trying, however. Two-thirds of responding institutions said they have specific, measurable digital channel adoption goals.

Digital adoption goals Mar 16
Source: Celent Managed Research Panel, March 2015, n=32

Beyond Transactions More recently, a growing number of banks and credit unions are thinking beyond transactions toward digital sales and service. Another worthy objective, particularly among the large number of institutions that are, frankly, desperate for revenue growth. A minority have specific , measurable goals to increase digital customer acquisition. We expect that to change as more banks embrace the imperative for omnichannel delivery. Institutions thinking beyond transactions are paying close attention to the state of digital customer acquisition – for good reason. About three-quarters of banks in Celent’s survey track completion rates, but far fewer systematically follow up on incomplete applications. This is a problem! The apparent disconnect seems to reflect a bias towards digital delivery. If cost reduction is the primary objective (it rarely is) than good. But if revenue growth and customer engagement are what banks are after (I believe that to be the case) then many are missing the point.

In my opinion, the objective of omnichannel banking shouldn't be tied to migrating an arbitrary percentage of customer interactions to the digital realm – whether transactions or sales. Consumers are becoming increasingly digitally-driven without bank’s involvement! The point of omnichannel delivery is to offer customers consistent and convenient ways to engage with your bank whenever and wherever they so choose, not to achieve some arbitrary channel mix.

The fact is, most consumers don’t want to open accounts on their mobile devices, even though they are very likely to be researching banking products and services online. That’s why banks need to offer a variety of low-friction ways to engage with customers and prospects. Click-to-call and digital appointment booking are two examples. Digital appointment booking (DAB), in particular, has emerged as "low-hanging fruit" among banks seeking to better integrate digital and in-person engagement. Although impressive results can be obtained from relatively modest effort, few institutions have taken this step.

Digital Appointment Booking First and foremost, DAB is not about driving branch traffic or somehow prolonging its relevance as some have suggested. Rather, DAB is about improving omnichannel customer engagement. Best practices suggest it is not a silver bullet either, but one of many customer engagement mechanisms that leading financial institutions are learning how to orchestrate to better serve customers. DAB is also not simply about booking appointments. When integrated with lobby management systems, DAB solutions help customers efficiently and effectively accomplish what they want and when they want it. Done well, DAB is very much a win-win. This is the point, isn't it?

I’ll be presenting on best practices in digital appointment booking at American Banker’s Retail Banking 2016 in Las Vegas on Wednesday afternoon April 6th. The presentation is part of Innovations for Credit Unions from 1:00 – 4:00 in the afternoon. If you’re planning to attend, feel free to stop by and say “hello”!

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