Are you prepared to let your bank get close and personal?
Customers want speed and efficiency from their banks but they also make it clear, in numerous studies and polls, that they want to enjoy the digital experience, to feel good about their interactions with their banking partners.
That proven desire or need brings in the whole nebulous world of human emotions which are basically completely alien to the way most organizations think. Organizations of all sorts, not just banks and FIs., tend, as a whole, to ignore consumer emotions even in non-digital situations, because the end goals, the organizational goals, are paramount.
Almost inevitably, says the Temkin Group which examined this reaction from customers, neglect gets worse, not better, when the organization gets automated.
Further research by the Temkin Group also shows that the extent to which the intuitive predominates in these interactions which means that the emotional content of digital banking cannot be ignored by the banks and FIs and that those which do ignore it, that neglect to take into account the customers´ emotional reactions to their interactions with the institution, run the greatest risk of losing customer loyalty.
So banks are trying to personalize, trying to get closer to their clients. Some use their data collection to celebrate new babies with their clients or to comment on graduations. That went horribly wrong for one set of parents whose child was still-born, yet, despite announcing the death and funeral on FaceBook, they continued to receive congratulations and offers of baby essentials, from retail outlets and from their bank which had not crossed and updated their data.
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On a more general level, banks send offers and gifts for Mothers´and Fathers´ Days, Christmas cards, New Years wishes and have even recently been getting involved in the Super Bowl which probably exasperated some football-hating customers beyond belief.
With St. Valentine´s day just days away, who is starting to cringe at the thought of their bank getting sentimental, involved with hearts, flowers and chocolates? It´s possible, given the current trend but is it necessary? Is that what customers mean when they make it clear that they wish to enjoy their experiences with their banks? Is that what they expect or want?
Simple personal cash management apps are very, very popular with young people who have never been taught to keep accounts or to worry about how they are spending their money. They would not accept the same advice from their parents but they´ll take it from an app, learn to save, learn to plan, learn to donate to charity and learn to think twice about large and not 100% necessary expenditures.
Maybe it is here that the the banks need to start getting more personal. It may not be the sentimental love of a St. Valentine´s card but it is a form of parental-style tough love, to teach young people to take better care of themelves and their finances and to think of others. And such teaching needs to be essentially very personal and very individual, allowing the use of almost intuitive AI interpretations of a customers´ movements.
The George Washington University School of Business has discovered that 92% of young adults between 18 and 37 years old in the USA have downloaded financial apps to help track spending and pay their bills. Not all the apps provide good guidance. Some have been accused of encouraging over-spending.
At least 1/3 of the young adults have had an overdraft at some time. The Harvard Business School has listed the succesful apps which do not encourage over-spending and which provide sound advice. These have encouraged savings of up to 40% of total income in some cases. Worldwide, there have been 3.4 billion downloads of financial apps in 2018, a 75% increase from 2015 with the fastest emergiung economies, Brazil, India, Indonesia, showing the highest percentage of users. In those countries, the priority seems to be the ability to send and receive cash using the apps.
In the European Union, the Payment Services Directives PDS2, were passed to foster innovation in personal money management with a group of approved start-ups but the banks have been very slow to provide interfaces to exchange client information which has frustrated the start-ups. However, a few European banks, notably Santander, Skandiabanken and ING, have developed their own financial apps in order to provide the tough-love style advice and guidance to their younger clients about personal money management.
The truth is that there are sufficient areas for banks to develop closer relationships with their customers. Not that close... let´s keep the St. Valentine´s Day cards coming but between lovers, where they belong.
Instead, banks should focus on orchestrating efficent campaigns, personalizing the approach to their customers.
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