In recent years, the banking landscape has witnessed an unprecedented wave of innovation driven by digitization. Nascent technologies such as automation and artificial intelligence have already become an important part of retail banking, delivering direct benefits to not only banks but to customers as well. Compounded with the government’s recent impetus towards a cash-light economy, major banks are continuously striving towards developing end to end banking solutions ranging from mobile and app-based banking to online-only banks accounts and digital wallets, all available at the customer’s fingertips. And with the outbreak of COVID-19 pandemic, financial solution providers are not left with much choice but to embrace the next wave of digital transformation in the banking domain.
However, despite the widespread impact of the digital wave, a bank’s core processes are still anchored to serve the needs of the bank more than those of the customer. Leading financial institutions are yet to consider digital customer experience as a key value proposition. Even those banks with the highest market penetration feature uneven interface design at different touchpoints, complicated transaction steps, limited visibility on account, complex reports and dashboards which prove to be a major motivation for customers to switch brands. With the advent of the internet and the constant availability of new information, brand loyalty has been on the decline and the tendency of customers to move to better service is at an all-time high.
In order to address the changing demographics, banks need innovative solutions to attract new customers and retain existing ones. Banking organisations must use digital touchpoints to fulfil specific needs, pain points and expectations. The modern customer expects the bank to provide a seamless, consistent and secured service across all sectors. Banks must use behavioural modelling tactics to estimate how individuals are likely to use their services and perceive value out of it.
At Lollypop, we have conducted extensive research across many consumer segments and identified some common usage patterns in similar age group consumers. Based on our study, we have broadly classified the target users into three categories based on their age and propensity to adopt new technologies.
The Generation Y or millennials, as they are popularly referred to, are a demographic cohort representing people born in the time range of the early 1980s to late 90’s-2000. Millennials are early adopters of new technologies, poised to become the largest banking consumer group in the next decade. Tech-savvy and independent, they are not brand loyal. They expect the banking services to be extremely quick and easy, with minimum levels of manual interventions. In our next blog, we will see how banks must come up with a strategy to win and retain this large and profitable consumer group.
Generation X is currently the largest demographic in the workforce; this term represents people born in the early 1960s to early 1980s. Gen X consists of good product researchers and brand loyal customers. With the highest level of financial transactions, Gen X is the biggest wealth creator for the banks. We will see in upcoming blogs how banks could boost the customer engagement for this segment.
Baby Boomers is the demographic cohort that can be defined as people born in the mid 1940s to the late 1960s. Boomers have been laggards in the adoption of technology and hence, are slow to change traditional banking habits. Their primary concerns with digital banking interfaces are security and ease of use. They rarely switch to other brands and yield a great deal of influence with the younger segments. To deliver an end to end financial solution with a higher level of usability should be a priority for banks.
Can design reinvent the banking experience?
Digital reform in financial institutions is at the tipping point. Omnichannel banking is the order of the day and hybridized banking techniques are penetrating the marketplace at a consistent pace. Digital wallets, wealth management solutions, easy lending portals, et cetera, have disrupted the financial sector by delivering user-friendly services. Every banking service that was earlier delivered only at a brick and mortar bank in India is now accessible on a smartphone. Driven by a customer-centric approach, these services are high on usability and adaptability, which is a result of well-thought User Experience (UX) Design and User Interface (UI) Design. The implementation of Human Centred Design (HCD) thinking while developing solutions can help to boost the emotional attachment to the brand, resulting in customer loyalty.
In this section, we will see how design can be embedded in the entire ecosystem of retail banking. The idea is to study how to provide tailored services to major customer segments and ultimately lifting the customer experience in banking. Based on our research, we have devised a systematic five-point approach to address the unique requirements of customers belonging to different age cohorts.
1. Personal Research through Empathy Design
Most of the best banks in India are thoroughly aware of their target audience but are negligent towards customer’s actual pain points & motivations. To address the unique pain points and expectations of every customer segment, banks must empathise with the customer and develop user personas. This process involves in-depth research of the user’s behaviour, challenges and motivation with the existing service. Digital transformation in banking can create more immersive user experiences.
Millennials who are not too proactive in managing and tracking their expenditure find the process of online banking complicated. This, in return, further fuels their disinterest. Empathy designing is a process that enables the service provider to step into the shoes of customers and perceive value out of the current offering from their point of view. This process helps to develop a holistic solution covering the entire banking journey of a customer right from opening an account to managing their portfolio online. This process also helps to add or eliminate features depending on their usability and demand.
2. Personalization of Services
According to Accenture, 91% of consumers are more likely to shop with brands who recognise, remember, and provide relevant offers and recommendations. This trend is relevant for banks in India as well, where the consumer expects solutions for every challenge he faces.
Banks need to analyse consumer behaviours and habits to deliver real-time connected banking services, offers and updates that are appropriate and relevant to each customer. The greater sense of uniqueness also generates a greater sense of control, ultimately bringing customer delight. While international banks in India are more perceptive to these changes due to their leanings in different markets worldwide, nationalised banks in India still have a lot of ground to cover.
3. Consistent Solution throughout Customer Banking Journey
The customer journey starts long before the user visits a branch and it continues for as long as the user holds an account in the bank. Along each step of the journey, banks need to ensure that the consumer does not choose a competitor due to gaps in the process. In fact, being the first banking preference of a customer is not enough; World Bank reports state that 48% of Indian bank accounts have seen no transactions in the last year. Improving customer experience in banking can improve these numbers in the time to come.
Mapping the consumer’s journey can help banks create intuitive processes and grab more market share of the new untapped business. At each stage, the experience provided is a primary differentiator — price and product are no longer the sole considerations. Each part of the process from onboarding to transacting must be smooth and user friendly. Customer journey mapping provides an in-depth insight into how consumers interact and engage with your brand, and how to be the right channel at the right time.
4. Robust Digital Security
As financial services go digital, banks have grabbed the opportunity to use customer data to grow business. But this opportunity creates several vulnerabilities in the banking system. The limited knowledge of customers about online security risks attracts fraudsters and cybercriminals, which eventually erodes the bank's credibility.
The higher risk necessitates a stronger banking infrastructure and security solution without complicating the user’s banking journey. Leading banks across the globe are adding cyber-security muscle to their solution through AI and blockchain technology. However, the challenge remains to deliver upgraded solutions to customers without compromising the integrity of personal data. Hence, the bank has to rely heavily on design and technology. Biometric authentication is an excellent example of delivering a more secure service while boosting the confidence of the customer.
5. Uniform Omnichannel Experience
Today customers start onboarding process with one channel and finish it with another without the need to provide the same data over and over again. Omnichannel experience is about making the same set of services available to customers across all the channels, both digital and offline, with instant data synchronisation. This integration is happening across most major banks in India.
A consistent look and feel across all the touchpoints elevates the overall experience of customers and reinforces the brand recall. As a banking brand, it is imperative to provide a uniform look and feel to reinforce trust and reliability to end-users. This requires extensive user research about customer’s engagement pattern with every touchpoint, followed by user experience design specific to every channel. A robust feedback loop must also be established to ensure that the shortcomings of each channel are duly corrected post research.
Design is a crucial component when it comes to making visual experiences tangible and accessible to each target user group. Each banking service is thoughtfully designed to solve the specific challenges of the customers as per their different age groups. Despite a diverse target audience, banks are accountable to address the needs of every customer, with the eventual goal of delighting customers and increasing retention. In our upcoming blogs, we will see how banks in India can use design to impact customer’s engagement and satisfaction through tailored banking services for each demographic cohort.
If you loved this, check out our blog How Can Banks Turn Millennials Into Lifelong Customers
This blog has also been co-authored by our ex-employee Kanistha Saha Choudhury.