Consumer Digital Banking at a Crossroads

Today’s financial institutions are at a critical juncture of their digital lives, with the paths of online and mobile banking converging at a rapid pace. Digital banking has become vital to the success of today’s retail financial institutions as consumers are used to – and increasingly expect – a unified buying experience thanks to omnichannel retailing. Consequently, financial institutions are responding with innovative omnichannel banking initiatives, led by digital banking.

But this is only part of the equation. Today’s customers are demanding more – much more – from their digital banking solutions. Because of their common usage of digital solutions throughout their retail experiences, customer expectations for digital banking are quite high. These customers are eager to bank on their terms, and when, where, and how they wish.

The recently published ath Power Consumer Digital Banking Study™ looks deeply into these issues, and identifies digital banking features that customers most desire – including functionality that expands well beyond account balances and basic transactions. The study also identifies areas where financial institutions and their fintech partners are potentially deficient in meeting customer expectations.

A telling example of the potential disconnect between banking customer needs and digital features available from their institutions can be found in survey respondents’ interest in important digital banking functions and desired advanced digital features. In many cases, such desired capabilities are not present in current bank offerings, but are generally available from alternative providers.

Outside of convenience and security elements, consumers are placing greater emphasis on features that extend beyond basic digital banking. These include mobile payments at merchant point-of-sale (digital wallets), P2P payments, coupons, and reward capabilities.

Such features as loyalty programs and discount coupons are of interest to over half of survey respondents yet, these solutions are typically not directly available through FIs. Rather, they are offered by fintech and other software firms, and accessible in mobile and digital wallets. These are opportunity areas for FIs.

Similarly, about a third of consumers are interested in such features as personal financial management (PFM), mobile payments, and virtual pre-paid cards. These tools are not generally available on many digital banking platforms.

One of the main conclusions of ath Power’s study is that financial institutions should leverage a key strength – their unique and trusted relationship with their customers and members, as they seek input and develop digital capabilities to meet growing expectations. The issue of earned trust and competence is often taken for granted, and should be leveraged throughout the customer engagement process.

The time is right for financial institutions to be truly proactive and lead the way toward advanced digital banking features – true innovations that go beyond basic banking. Consumer interest in such areas as loyalty and discounting, budgeting and PFM, and digital wallets are currently top-of-mind, and should already be on product roadmap discussions. Looking ahead, FIs should be aware of growing consumer interest in emerging technologies and processes if they are truly interested in meeting – and exceeding – customer expectations.

Learn more about The ath Power Consumer Digital Banking Study™

 

Contact ath Power Consulting

For more information on this topic, please contact the author, Ed O’Brien.  Mr. O’Brien is EVP, Research & Strategy at ath Power Consulting.  He can be reached at eobrien@athpower.com.

 

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