Financial Institutions Need New Walls

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Small but mighty particles have turned our world upside down, and the banking industry is still recalibrating. Contact channels that were once secondary, such as online, mobile and digital assistants, have traded places with in-person banking, assuming the role of primary customer touchpoints. In fact, coronavirus-triggered social distancing and isolation drove up the use of financial apps by 72 percent in a week during lockdown, according to the deVere Group. “How do we entice our customers to come see us?” is changing to “How do we serve our customers when we can’t see them?”

This flip in customer interaction channels is prompting banks and credit unions to evaluate whether the channels that were in place before the pandemic are delivering the seamless, intelligent, secure experience they want for their customers and members on a daily basis. And whether new channels should be added to increase accessibility.

With customer satisfaction less dependent on humans than ever before, strategic investment in intelligent interaction technology is imperative. “If it’s really that important, they’ll come see me” was once a viable fallback among bankers, but it’s wearing thin, as consumers have become accustomed to modern convenience (not to mention, many bank customers and credit union members are still avoiding unnecessary physical contact).

After four months of handling their banking needs away from the branch, consumers have overcome the new technology learning curve. And there’s no going back.

As financial institutions adjust to new norms and expectations, maximizing convenience and security should be the dual focus. Improving convenience means giving customers and members more easy-to-use options that fit their lifestyles. A turnkey way of doing this is to start serving customers via technology platforms that they’re already using. At the beginning of 2020, Amazon announced that there are now "hundreds of millions of Alexa-enabled devices" in customers' hands worldwide, a giant increase from the 100 million it announced last January. Gartner also predicts that “by 2022, 70% of customer interactions will involve emerging technologies such as machine learning (ML) applications, chatbots and mobile messaging, up from 15% in 2018.” Customer adoption is built-in with conversational banking, as many millions of people are already using the technology that enables it.

The value of conversational banking goes beyond the novelty of allowing bank customers and credit union members to use a digital voice assistant to handle their banking needs. A sophisticated Personal Financial Management (PFM) tool, AI-powered conversational banking deepens customers’ and members’ understanding of their finances, providing even more insights than can be gathered from coming into the branch, ironically. It strengthens members' relationships with their finances and with their financial institutions. What’s more, virtual assistants will soon be accessible nearly everywhere, because voice-controlled, cloud-computing software will be built into just about every new gadget, appliance, vehicle and building.

Live video has also skyrocketed in popularity during the pandemic, from Zoom meetings to telehealth visits. Zoom recently announced a whopping 300 million daily meeting participants. The time is ripe for one-on-one live video conferencing between banker and customer for those meetings requiring a live interaction. But because financial fraud never sleeps and sensitive information would be involved, video interactions need to take place within the digital walls of the institution, within the confines of an application that belongs to the bank.

With consumers staying home and carefully managing their money during the pandemic, call centers have been swamped, creating unreasonably long hold times for customers and members. Most financial institutions simply weren’t prepared to launch into a socially-distanced world. But consumers won’t be patient forever; convenientsecure self-service options with more advanced engagement and capabilities are needed to make remote banking successful and alleviate the single-threaded pressure on call centers.

Almost overnight, digital transformation in retail banking was elevated from a nice-to-have to a necessity. Rather than looking backwards at what should have been done to prepare for today, financial institutions should look ahead and prepare for tomorrow. The post-pandemic world will no longer be confined by physical walls, so banks and credit unions need to find ways to meet customers and members wherever they are.

Stacey Zuniga is Vice President of Financial Services at ENACOMM (www.enacomm.net), a leading fintech provider of customer authentication and intelligent interactions technologies.




Edited by Maurice Nagle
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