Digital advancement means consumers today connect with what they want, where and when they want, and they increasingly expect instant gratification. Gemalto’s Howard Berg comments on this trend

As consumer expectations evolve, the relationship between customers and their banks alters. Following the global economic crisis of 2008, banks fell out of favour with customers. In 2015, truly connecting with customers and making financial transactions more convenient is still something FIs struggle with.

According to KPMG’s April 2015 bank benchmarking report, customer relationships and trust are major profit drivers, and in order for banks to increase profitability, customer engagement must be boosted.

To boost customer engagement, banks will need to adopt new technologies to support digital services delivery, and provide customers with more value and better security.

Digital services reduce costs and increase margin- driving profits, appeasing customers making for a healthier bottom line.

Modernising banking services
Consumers are now treated to a wide range of retail experiences (Amazon, Starbucks) and they compare their experience with banks to these.

The retail industry has shown that technology exists to help banks enhance the customer experience and reduce overheads. As the digital landscape started to evolve, so did consumers expectations, needs and habits. Retailers responded to customers evolving needs, so it was clear to banks that this is a lead they should follow, with an end goal of being able to actually lead the way in both customer experience and innovation.

The customer is king, regardless of whether they are new or longstanding and loyal. Adopting a customer-centric approach to the design, offering and implementation of new digital services is crucial.

With each new customer offering, a new touch-point is created with the opportunity to further develop, or even redefine the existing relationship. As a result, every element of contact with the customer, from account acquisition to offering new banking services must be highly scrutinised.

Once the customer has opened a new account, they will generally be payment-focused. They will want to make payments quickly and easily with the flexibility to use their preferred payment method, whether that is a credit or debit card, smartphone or other another payment device such as wristbands or stickers. The ability of a bank to issue payment credentials quickly across multiple devices, online and in proximity, is of the utmost importance.

New, all-encompassing payment methods offer an attractive value proposition for banks, but they should work with retailers to ensure these can be delivered conveniently and securely to consumers.

Retaining and growing the customer relationship
Once a customer has opened an account, the onus then turns to retention – ensuring the customer is not only happy with the service but also feels completely safe and secure in their banking activities. Whether to do with communications, data exchanges or payments, security will always be a key issue for consumers. One bad experience can turn a customer away for life.

As a result, ensuring the confidentiality and integrity of customer data stored, transferred or exchanged in the digital banking ecosystem is crucial. As traditional in-branch banking services lose ground to new online banking services, creating an increasing need to authenticate users online, the need for security will only rise as customer data becomes more exposed to the dangers of the online world.

Ultimately, banks still seem to be recovering from the global banking crisis, both financially and in terms of their relationship with customers. However, by fixing the latter, they can address the former, and new technologies are key to this.

Digital banking transformation requires adapted processes and a cultural shift. Banks can’t change customer culture overnight, but they can start pushing them in the right direction. Banks have a responsibility to both shareholders and customers, and by utilising innovative technology they can do more to service both. In the long run all parties will benefit – but only if the customer user experience and security remain front of mind.