Due to the COVID-19 pandemic, people are interacting digitally with their banks more than ever before. And with ever-rising customer expectations on the digital front, personalization and customer excellence should be front and center to bank’s digitalization strategies.
Because of COVID-19, the European Commission encouraged banks to accelerate their digital agenda in order to ensure remote access to financial products and safeguard their balance sheets. Banks should heed this challenge, because the extent to which they can proactively offer relevant services – especially in times of crises like these – is key to maintaining customer relevance.
Of course, digitalization was on boardroom agenda’s long before COVID-19 struck. More than half of banks are already partnering with fintechs to provide new and innovative services, research shows. In addition, 47 percent of financial services providers expect to see a radical digital transformation in the near future, including the replacement of a significant share of their workforce by automation.
Nevertheless, customer behavior and expectations are shifting so rapidly, banks must go pedal to the metal to keep pace. 11 percent of customers are considering switching banks due to COVID-19, with almost half of them considering digital banks.
Customers expect their banks to know them. KPMG research shows banking customers are clear about what makes an experience excellent: personalization. People expect automated, fully-integrated, intuitive and user-friendly apps that minimize time and effort when interacting with their banks. Because that is exactly the service they receive, for example, when shopping online. Once consumers have experienced digital excellence, they refuse to settle for less, regardless of sector.
Customers also expect banks to be pioneers of trust and cyber security, and offer both products and insights. All in all, a tall order to be sure. Yet with the rise of challenger banks, fintechs and non-financial institutions, traditional banks not just need to adapt to stay relevant – they need to lead. But our research indicates that banks are underperforming when it comes to personalization.
Banks need to radically focus their digitalization agenda on customer engagement in order to stay relevant in the post-COVID-19 world. Among other things, they should convert insights from customer experiences and customer data into actions, invest in employee competences, and aim for excellent customer services through 24/7 availability and seamless omnichannel experiences.
Digitalization tends to be used as a broad and overarching term, which spans various dimensions and activities. However, when scoped and made specific for banks, there are plenty of concrete solutions that will improve customer experience and provide banks with more data and insights to successfully navigate these challenging and unpredictable times.
For more insight on digitalization in banking beyond COVID-19, download our whitepaper by clicking the link below. In this paper you will find more in-depth views on digitalization in the banking industry on 6 key themes.