The evolution of customer service in traditional banking was very slow during the past few decades. One of the milestones in that matter was probably the invention of the ATM in 1967 for the automation of bank-teller operations. Then the customer support in branches started to migrate to telephone banking, followed by the smartphone era that changed the approach of banks in dealing with customers.
Mobile technologies have significantly affected the financial services industry, forcing institutional players to tailor their businesses to survive in the mobile-first environment. Nowadays, the progress of customer service and the speed of its change are very fast. In fact, Forrester predicts that in 2017, 108 million customers in the United States alone will be using mobile banking.
Innovation in customer service is becoming a huge priority for banks; the world today is changing rapidly, and everything we know is getting digitized. Digital banking solutions are making the life of common citizens very easy as there is no need to stand in the queue for long hours to get what you need, or call the broker to buy a few stocks of Facebook, or wait a few days for a loan officer to analyze your business feasibility.
In a 2015 survey, Bain & Company questioned 111K customers about what they would miss the most: their mobile phone or wallet. More than half of the customers chose their mobile phones over their wallets, proving how much mobile and digital changed the world and, particularly, the attitude to money and everyday personal finance.
But did traditional banking manage to transform as quickly as customers changed their attitudes? Potentially, NO. And, as a result, FinTech startups were able to gain substantial traction among consumers. Modern FinTech solutions nowadays allow customers to enjoy a cup of coffee while getting the payment done with a few clicks on their smartphone screens.
FinTech startups went even further, bringing value-added services in areas such as:
Not surprisingly, millennials have embarked upon these digital banking solutions, which are changing continuously. Millennials today are more inclined towards FinTech companies offering digitized and mobile-first financial products. In fact, 44% of millennials (vs. 27% of the general US population) use alternative digital banking products, choosing them over traditional banking because of the ease of use and credibility.
Moreover, a very significant portion of millennials will switch their bank if they can’t bank on their mobile.
Despite the slower digitization speed compared to FinTech startups, banks have also changed a lot:
Clearly, FinTech startups played a significant role in digitizing banking processes, forcing institutions to refine their approach to delivering financial services. Banks are also undergoing inner digital transformation and automating processes at a scale of whole departments, cutting down operational and administrative costs.
But the advantages of digital banking go way beyond saving cost and time. Customers are the biggest beneficiaries when it comes to the digitization of banking processes. Customers can today get their banking activities done within seconds in a secure and safe way.
On top of security and speed of services, customers can also get a quality and hyper-personalized banking experience. Using big data analytics, banks are delivering specific services relevant to personal needs. Hyper-personalized experiences, in fact, are perceived as one of the competitive advantages that allowed FinTechs to set foot in people’s phones and minds. Consumer-friendly mobile FinTech applications have quite significant adoption rates—16.5% in the US, for example.
Better customer support has also worked to the advantage of FinTech startups, where the use of business intelligence and automation software opens doors to customers’ hearts through prompt troubleshooting. Virtual assistance and live chat features are rapidly becoming an important part of customer support operations. They are intended to help customers without human intervention, stepping on the toes of bank branches.
Customers are becoming more inclined to mobile-first and feature-rich banking solutions and seem to trust them more and more every day. Expectations for improved digital banking experiences rise, and new business models emerge in response. They affect all areas of the financial services industry, leaving chances only to those assuring the most convenient and user-friendly experience with a financial service of any complexity.
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