While the digital environment brings new opportunities and efficiencies for financial institutions, it also changes their level of knowledge about customer intentions and the way that institutions engage with their customers. Overall, it tends to reduce the bank’s visibility into consumer needs and intentions -- important early customer journey stages of awareness and consideration.
In addition, consumer diversity has increased as well. The U.S. has five distinct market segments varying widely by age, income, asset value, and channel use preferences, and consumers increasingly value personalization and demand that engagement content be relevant.
With critical purchasing power shifting to Millennials and GenZ consumers, segmentation cannot be ignored. A lack of customer understanding often leads to reduced content relevance, resulting in a loss of connection. Therefore, a deep understanding of segmentation and diversity differentiators is key to meeting and overcoming these relevance challenges.
Modernization of the financial institution’s branch assets is now essential to provide customer value beyond transactional services. This is necessary to satisfy consumer desire for both the convenience of digital and the value of human advice and servicing support.
Customers today have many choices at their fingertips through the digital environment. Studies consistently show that consumers become easily frustrated with cumbersome and disconnected channels, unreliable and error‑prone systems, post‑purchase hurdles, and a lack of access to branch and call center human assistance. In today’s market, if an application takes more than 10 minutes, customers will likely give up and take their business elsewhere.
As the appetite for digital interaction increases, so too does the risk as associated with fraud, customer authentication, credit origination, and self‑service fulfillment. Enhanced and vigilant fraud protection considerations must be part of a new digital delivery strategy. Thankfully, technology and predictive analytics can not only solve these issues, but open new opportunities to extend customer engagement to include consideration and awareness stages. With digital technology, we can better engage consumers earlier, thereby increasing influence in initial customer journey stages.
For more information on building a digital strategy, please download our ARGO Connects Overview brief.