How can banks meet the needs of the digital consumer?

  • There’s often talk about how retailers must adapt in this digital age. As consumers of all ages become increasingly tech-savvy, these organisations are in constant competition to be the most innovative.

    Yet, this battle stretches beyond the store, to the payments sector. Banks have always been a staple part of our high street, but this doesn’t mean they’re immune to changing consumer demands.

    According to new research by Personetics, banks have a lot of work to do if they wish to keep hold of their customers this year. 45% of these are planning to switch their current account to an alternative financial institution, such as a challenger bank or retailer, in search of a better offering.

    And unfortunately for banks, it’s the most tech-reliant group of all that’s feeling the most dissatisfied with their services. It’s been revealed that just a third of 18-24 year olds think their bank provides them with the necessary digital tools to help manage their finances.

    Of course, this doesn’t mean that the need for change has gone completely unnoticed in the sector. There are some banks that are experimenting with new technology to both enhance their service and boost customer engagement.

    For one, Bank of America is enlisting consumer-favourite Facebook for its latest launch. With over a billion monthly users, the social media platform is fast-transforming into a key interaction point between consumers and their favourite brands. And the bank is taking advantage of this in a bid to makes its offering more convenient.

    By utilising Facebook’s Messenger feature, the bank will be able to send account holders real-time alerts regarding their finances. Set to go live later this year, it hopes to appeal to today’s always-on consumer, who expects access to services wherever and whenever they like.

    Meanwhile, Nationwide is heading down an even techier route, selecting biometrics as its means to turn customer heads. The average Brit has to remember six different passwords – many users are clicking ‘forgotten password’ links twice a month. In a bid to simplify this process for its customers, the building society is trialling a biometric log-in process for mobile users, who often use their devices to manage daily tasks such as banking. And as 70% of its customers admitted to wanting more security, the launch could be the answer to more than one customer frustration.

    However, pleasing a digital audience doesn’t necessarily demand big technical innovations. Just take a look at Lloyds, for example. As more and more customers opt for online banking as opposed to visiting a branch, Lloyds wanted to find a way to bring the knowledge and advice of its staff to the home. Now, its customers can speak to mortgage advisors from the comfort of their sofa, following the launch of home video banking. Not only does this enable more flexible appointments, satisfaction levels have soared since it was introduced.

    There is no definitive set of rules when it comes to keeping consumers happy, particularly as their wish list seems to grow all the time. But what is for sure, is that the constant arrival of new technology will only accelerate these expectations, and banks must do their best to keep up. And as Lloyds has proven, this doesn’t necessarily mean banks must jump in the deep end to be deemed digitally-aware. It’s those that do nothing that will get left behind.