The American Banker Digital Banking Conference was held in-person this year, giving many banking and fintech executives a long-overdue chance to meet face-to-face, collaborate on industry needs and trends, and learn more about the digital advancements benefiting the financial services space.
ARGO was a sponsor of the conference and made the most of the week, engaging with banking executives to get a better sense of their challenges and opportunities to communicate and further align ARGO’s robust capabilities with the evolving demands of the industry.
Several topics came up repeatedly during these conversations, highlighting how decisions related to digital banking channels, targeting younger generations, and the use of branches will be critical in shaping the financial services industry for years to come.
Discussions heavily focused on four key issues:
- Financial institutions need to ensure that digital channels are integrated and collaborative.
As the digital channel has become widely adopted by consumers, banks now have the challenge of ensuring this channel does not become an island. Collaboration amongst digital, branch, and contact centers channels provides transparency and consumer engagement for both bankers and consumers.
- Consumers that visit the branch feel that they have a more personal relationship with their financial institution.
Branches continue to be valuable to customers, even those that primarily use digital channels. A study by J.D. Power found that 73 percent of customers who visit bank branches say they have a personal relationship with the bank, compared with 53 percent who primarily use their bank’s digital channels. As a branch’s transactional role diminishes, their customer service and advisory roles increase. For example, branch and contact center personnel play a significant role in customer acquisition, clarifying options, and offering guidance and assistance. They also focus personal engagement on serving broader and more complex needs that require a consultative approach, resulting in a more personalized experience.
- The most successful financial institutions have a human connection with customers.
While the digital environment brings new opportunities, it also changes the customer engagement model dramatically. Modernization of the financial institution’s branch asset utilization provides customer value beyond transactional services to guidance, education, and meeting needs related to major life events. This satisfies consumer desire for both the convenience of digital and the personalization of human advice and servicing support, which results in a stronger human connection with customers.
- Engaging Gen Z the right way is vital for success.
Engaging younger generations, specifically Gen Z, is important for banks of all sizes. According to McKinsey & Co, Gen Z now accounts for more than 40% of global consumers. In the U.S. alone, they have a rapidly growing $150bn of spending power. However, many banks are denying this demographic accounts due to their lack of credit and financial history. Two thirds of online account opening attempts by Gen Z consumers are denied because this is their first account. For banks to continue to be successful, they need to engage this segment and focus on their customer experience, especially through the digital channels. The reality is that Gen Z balances are higher, and attrition is lower.
The conference and these conversations reinforced the importance of banks taking advantage of available technology and fintech solutions to better meet consumer demands and evolving market conditions to remain profitable for years to come.