The last two years have changed how banks are approaching their digital journeys. That’s why I wanted to write about this topic, and why I asked my colleague Danelle Faust to join me as co-author. She leads our financial services business within Accenture Song across the Midwest, helping organizations improve customer experiences.
The pandemic pushed the fast-forward button on digital transformation. Our most recent global banking consumer research shows that digital engagement grew during the pandemic. Today, half of consumers interact with their bank through a mobile app or website at least once a week, compared to just 32% two years ago. Emarketer just reinforced this trend by reporting the availability of mobile banking as a rising motivational factor for consumers selecting a new bank.
Getting into the business of experience
This shift to digital has created urgency among middle market bank leaders to fast-track their digital transformation journeys. But doing this requires different muscles. These banks can’t rely solely on generational banking relationships to drive organic growth. And they really can’t rely on the ways they’ve always done business. With consumers becoming increasingly digital—and with all the banking choices people have—middle market banks will need to grow and nurture their customer base differently.
Accenture describes a concept in “The Banking Experience Reimagined” called the “business of experience.” It’s about setting strategies through a customer-obsessed lens. The goal is for banks to set themselves apart in every customer interaction across engagement, sales, servicing and rewards. It’s seeing the customer as a whole vs the sum of the parts. And it’s really the only way to meet customer expectations and stand out in a highly commoditized market—what we call the “sea of sameness.”
The question for bank leaders isn’t if they should get into the business of experience. It’s how.
Banking Customer Experience Reimagined: Accenture identifies four opportunity areas for reinventing the banking customer experience and reinforcing trust in banking relationships.LEARN MORE
The risk of a knee-jerk reaction
While the exact how is different for every bank, it involves making changes across areas including technology, customer data, services and integrated communications. There’s a knee-jerk reaction that we often see among middle market banks here. They try to go “all in” to transform the customer experience and further the digital journey with an ambitious transformation. This typically starts with a significant investment in new or enhanced technology.
Consider the cautionary tale of a middle market bank that heavily invested in a technology platform they expected would change everything. Flip the switch, and magic happens, right? Unfortunately, wrong. There was no north star vision or overarching digital strategy. In addition, different parts of the organization were siloed, and staff didn’t have the necessary skills to use or optimize the technology. The bank had a great (and wildly expensive) solution, and no way to derive the promised value from it.
This approach clearly didn’t go well. The reality is that middle market banks typically don’t have the human or capital resources to sustain such an ambitious transformation. Also, it’s difficult to know where to begin or what priorities to set. Sooner rather than later, we often see analysis paralysis set in, and meaningful change becomes stalled. So how do banks get started?
Placing the right bets on the right outcomes
We believe middle market banks can avoid this fate. We talked earlier that the importance of being in the business of experience means being customer obsessed. While middle market banks can’t outspend large national and global banks, they can be smarter about how they navigate their digital transformation by simply being hyper-focused on customer outcomes.
This focus is about banks having clarity on who they want to be to their customers and how they’re going to show up and meet their customers where they are. Outcomes will vary from bank to bank based on the bank’s overarching north star vision. Being customer obsessed and hyper focused can break down organizational silos and make it easier to place smart bets based on the bank’s strengths, customer needs and potential impact. As the old saying goes, a jack of all trades is a master of none.
This “less is more” approach proved successful for a mid-size commercial bank charged with rethinking its digital experience as its growth strategy evolved. Leaders prioritized integrated communications, built out a new content program and developed customer journey maps and personas to personalize their experiences. While they did invest in optimizing the website, the technology investment was reasonable and contained. It was far from “whiz-bang” tech that no one knew how to use.
There’s also the mid-sized financial services organization that was experiencing significant growth and needed to differentiate itself by focusing on customers and the customer experience. They had invested in customer experience activation tools, but not overly aggressively. They zeroed in on building an enterprise data capability knowing data is at the core of customer experience transformation. Their approach was to conduct proofs of concept to pinpoint the highest-value opportunities with plans to scale over time.
We like both of these success stories because they show how knowing your customers and harnessing the power of customer data can be the fuel for growth for middle market banks.
It’s time to get down to business
Middle market bank leaders know that they must prioritize their digital transformation journey. Those that place bets on changes that can deliver meaningful and relevant outcomes for both customers and the business will reap the rewards. They can increase customer lifetime value, grow revenue, lower attrition and more.
The first step in boosting the digital transformation journey? Getting great at the business of experience.
To learn more about starting the digital transformation journey at your bank, please contact me here or connect with me on LinkedIn. Connect with Danelle on LinkedIn.
Learn more on “How middle markets can play to win”.