The digital revolution has transformed the banking landscape, with customers increasingly preferring virtual and mobile banking experiences over traditional brick-and-mortar interactions. According to Forrester Research, mobile banking is the biggest industry innovation in a century, and a Pew Research study found that 57% of adults in the US bank online to some degree. As the tech-savvy millennial generation becomes the primary consumer base, banks must adapt to meet their evolving expectations. This blog explores the emergence of "Customer 3.0" – the digitally-empowered consumer seeking seamless, personalized, and socially-engaging banking experiences. Discover how banks can cultivate organic growth by aligning with Customer 3.0's preferences, fostering customer loyalty, and delivering superior customer experiences across multiple channels.
The Digital Disruption in Banking
The world is moving online, and banks are no exception. According to a Gartner study, the evolution of the internet has raised questions about the continued viability of traditional brick-and-mortar establishments in financial services. The concept of a community bank with a local presence is giving way to a new era of banking driven by automation and customer preferences.
Uncovering the Digital Opportunity
The rise of online and mobile banking has brought about a seismic shift in customer behavior. As Dan Boone, head of Banking and Financial Services for Coforge in North America, points out, "79% of smartphone users will use their phones to help with shopping." This has given rise to a price-savvy customer base that values convenience, mobility, and lower fees.
For banks, this presents a 21st-century challenge: maintaining organic growth and customer loyalty when customers prioritize online reputation, customer service modules, and seamless digital experiences over traditional loyalty factors.
Great customer experiences are key
Companies that consistently deliver and improve upon positive experiences have three things in common: customer insight, customer culture, and a "designed" customer experience. By delivering a rich, personalized cross-channel experience with seamless integration across all touchpoints, banks can differentiate themselves and foster customer loyalty.
Internet Leads the Way for Organic Growth
Traditional forms of organic growth, such as parents opening a savings account for their child at the local community bank, may become less prevalent as the millennial generation takes centre stage. This generation relies heavily on word-of-mouth recommendations and social media presence, changing the concept of community from local to global.
Growth Driver: The Bigger, Better Deal
Millennials, born between 1982 and 1994, represent the next generation of growing families in need of banking services such as mortgages, loans, and investments. However, they prioritize convenience, mobile accessibility, and online customer service over traditional loyalty factors.
To serve this growing generation of 'new' customers, banks must adapt to shifting customer expectations and cultivate customer loyalty through innovative digital solutions.
The Solution: Innovation through Technology
Cultivating banking tools that appeal to the online sensibilities of younger customers, such as online banking wizards, self-service portals, and mobile applications, is crucial. These solutions offer affordability through automation, allowing banks to lower rates and fees – a key factor for the price-sensitive millennial.
What Can You Bank On?
According to Boone, there are three likely models of banks that will thrive in the 21st century:
- Intelligent, Multi-channel Banking: Highly automated, with online compatibility and a contact center, tailoring services to customer preferences and history.
- Socially Engaging Banking: Banks that leverage social media to build their online reputation and engage with customers.
- 'Digital Ecosystem' Banking: Banks that operate primarily online, offering partnerships and discounts with other businesses.
Catering to Customer 3.0
The next wave of digital banking consumers, or "Customer 3.0," craves community approval through a powerful social media presence. They shop by price, seeking automation to keep fees and rates low, and expect interactive features and prompt responses.
Customer 3.0 initiates banking from various devices, relying on opinions of friends, family, and online reviews. They seek banks that can address multiple concerns and provide exclusive deals through partnerships.
Significantly, Customer 3.0 needs to feel that their business is worthwhile to their bank. Providing personalized experiences, remembering customer histories, and catering to individual financial needs will be crucial for fostering loyalty in this new era.
As the demographics of the nation shift, so will its wealth – all thanks to Customer 3.0. Banks that embrace digital transformation, align with Customer 3.0's preferences, and deliver superior, personalized customer experiences across multiple channels will be well-positioned to cultivate organic growth and thrive in the future of banking.
Are you ready to cater to the demands of Customer 3.0 and future-proof your banking operations? Connect with our experts to learn how Coforge can help you navigate the digital transformation journey and deliver exceptional customer experiences.
