How digital-first banks are winning customers over thanks to innovative technology, intuitive user experiences, and trust.
When today’s customers evaluate financial institutions, they do not compare different banks anymore, they compare experiences. Everything in their lives as consumers is better than ever—they have smart digital services at their fingertips via their smartphone whenever they want them. Booking a flight, planning a holiday, shopping online, etc.… customer experiences have become seamless, easy, and instant. Onboarding new customers takes a matter of clicks and—more importantly—unhappy customers can voice their concerns and switch providers in a heartbeat.
The traditional approach (siloed channels like web, online, branches, post, etc.) is neither customer-friendly, staff-friendly, nor efficient. Each channel needs its own raft of workflows, content, screen design, and other various supports. This essentially means the same functionality has to be created for each channel with high workloads and an end result that does not integrate.
So how can neobanks compete for market share in this customer-focused digital space? Traditionally, banks focus on metrics like customer retention, customer penetration, asset quality, and assets under management (AUM) to gauge customer success. Yet digital-first neobanks looking to become their customers’ main bank can greatly benefit from moving away from these tired KPIs to specifically focus on goals that relate to measuring the success of their customer-facing digital products. This includes focusing on their customer journeys and customer experiences by utilizing intuitive digital platforms to fuel superior experiences. Most importantly, they can focus on becoming an active part of their customers’ digital lives—something that is more important now than ever to stay competitive.
Read our seven tips for moving from second or third place to become the primary one-stop shop for all your customers’ banking needs.
Make it as easy as possible for new customers to create an account with you. Completing background checks and adding funds can come later. So long as customers can create an account and familiarize themselves with your dashboard, that will likely be enough for them to return and complete their account setup later.
Research shows that a superior account opening experience is vital for banks to remain competitive and to ensure loyalty. Remember, customers who begin to open an account have the intention to complete it, otherwise they would not have started it to begin with! Customers who fill out and submit their applications through a single digital channel are more likely to get to the finish line than those who are bounced to other channels too.
One of the most important user stories to get right is the new customer onboarding process. This is why it’s so important to carefully design a complete onboarding experience for your customers (even including the parts that do not directly apply to you: keep reading). Neobanks recognize how crucial it is to create and fine-tune the most elegant account opening and application experiences because customers have already taken such a big step in downloading the app in the first place. Many neobanks also add nice touches with sharable animations and premium unboxing experiences once they know the customer is through the door.
Open banking APIs will soon make switching from incumbent banks seamless too. Making the most of the UK government’s Current Account Switch Service for the full and final onboarding experience, Monzo allows its customers to perform a full or partial switch of payments and balances from their other bank accounts. In just a few taps, the user can get their switch set up, and then sit back and let it happen. A full switch even closes the customer’s old account for them. This makes it easy and attractive for customers to move their primary banking needs over from their bricks-and-mortar providers and can tip the scales in your favor.
This is important for digital-first banks as well as auto lenders and credit unions. Whether your customers are buying homes, cars, or anything else, they will not have the patience for lengthy loan application processes and the inevitable waiting period that comes with them.
Consumers enjoy same-day delivery on Amazon Prime, movies on demand on Netflix, and taxis arriving at their destination via a few clicks in the Uber app. Quite unsurprisingly, they have transferred these expectations for speedy services to every aspect of their lives, and getting their loans approved is no exception.
For instance, UK-based Atom Bank solved a very real pain point by partnering with tech company IRESS to build its consumer and broker-facing mobile mortgage solution using open API architecture. On launch, it resulted in a full application to mortgage offer timespan of 22 minutes, and they’ve since beaten their record with a time of just 21 seconds!
Adopting digital marketing channels and measuring key KPIs can boost your conversion rates. Sales funnels can get complicated—especially with so many channels available—and many banks do not keep a close eye on key digital metrics such as website traffic, conversion rates, customer acquisition cost, social media engagement, and marketing qualified leads.
Start by focusing on digital channels to improve your customer journey and begin increasing your conversion rates. Allow potential customers to easily onboard from a single digital channel with as few steps outside that channel as possible (like email confirmations and requests for documents, for example). This helps you focus on your conversion goal for that step, and it eliminates potential bottlenecks where users may drop off.
When looking for conversion indicators, remember your mission and how to reach target customers. Whether it is banking the unbanked, ethical banking, or challenging the incumbents—the most successful neobanks communicate a clear message to their customers about their mission and purpose. Most neobanks are quick to label themselves as an alternative to legacy banks and put customer-centricity in the limelight. Many proclaim other focused missions intended to improve the lives of their customers. The Netherlands neobank Bunq heavily emphasizes complete freedom for their customers to use their money to achieve goals in their lives, decide where and how their money is invested, and easily track their spending. And it takes less than five minutes to open a new account with them too.
Many banks take pride in their new omnichannel offerings. It is a nice idea for customers to have the option to interact with their banks through webpages, mobile apps, desktop portals, etc. But it is no good if they are unsure where to go to do what they need to. Many customers who encounter too many touchpoints during their customer journey simply give up (and you will not even be aware unless you’re tracking the right KPIs).
It takes a more intuitive touch to launch a truly innovative (and disruptive) banking service. Before you invest in multiple digital channels, consider how they fit in with your customer journey and whether they enhance the customer experience. Tom Moran, Associate Director of Experience at enterprise software developer EPAM Systems explains how they’re developing next-generation banking experiences by focusing on customer intuitive experiences: “Over the next two to three years, banks will focus on multiple digital touchpoints and small interactions. A customer’s banking relationship should not be accessible solely through logging into an app several times a week to check their money—it should be brought to them. For example, micro-reports with daily updates on customers’ current financial health can be delivered directly to their preferred digital touchpoint at a time that suits them, such as receiving in-app visual reports on the commute home or Alexa reading the report while you’re making dinner.”
Turnaround times are especially important in an era when customers’ tolerance for lengthy response times keeps plummeting. A customer reaching out with a query on Facebook Messenger should not be informed to call customer service a day later. Consumers should be able to reach out to their primary banks from the channel of their choice—especially digital ones—and receive a timely, helpful answer through the same channel.
In the UK, digital-first bank Starling Bank consistently comes out rated first for customer service thanks to the many ways customers can reach out for help—including detailed FAQs, telephone, email, and in-app live chat.
New customers come for the convenience of switching, ease of use of your app, and attractive rates. But they stay for the complete banking experience you provide that includes spending habits, trends analysis, and investment services. And in today’s digital world, there is no surer way to increase customer satisfaction and foster loyalty than by enabling listening to your customers as their needs evolve.
Find out what modular banking services are available to add to your existing products and enrich your customer experience—such as loan applications services, insurance, payment services, or investments. Digital-first banks can seize the opportunity to grow with their customers as their needs mature by adding modular products, such as investment services.
When your customers have satisfied their daily banking needs, give them every reason to make you their main bank by adding investments to your product family. We have designed a white-label robo-advisor add-on service to do just this. You can add it to your existing services, personalize it with your branding and user experience, and let your customers invest their money exactly how they want.
We have designed our modular investment service to be quick, straightforward, and cost-effective to implement and maintain. Plus, we take care of the hosting, back-office, compliance, and other requirements for you so you can focus on your customers.
Learn more on our website or contact us for a live demo.