Accelerating digital banking pandemic reveals difficult points


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The good news for financial institutions in the Covid-19 era has been an unprecedented gain in consumer satisfaction during a difficult year. The bad news is that remote access enabled by a remarkable increase in the use of online and mobile banking has produced a unique type of isolation that has left digital-only consumers with the impression that their financial institutions are not communicating. not with them as well as during their visit. branches.

There is an exchange in face-to-face conversations that is lacking for most mobile channels. A consistent conclusion from JD Power’s latest retail banking satisfaction survey is that even consumers who use branches lightly under normal circumstances find that there is a dimension missing from mobile channels, according to Paul McAdam, senior director, Banking Intelligence and Payments.

This finding, while important for the continued growth of digital banking, should not diminish the fact that the banking industry has seen overall consumer satisfaction rise during these extremely difficult times. Satisfaction levels were higher than usual, even among consumers who are feeling less well financially due to the mixed economy of Covid.

The Covid service has been recognized:

Almost two-thirds of consumers polled by JD Power say their banks have fully supported them during the crisis and nearly nine in ten say they would stay with their bank as a result of this performance.

The annual study is based on responses from over 94,000 consumers of retail banking services served by major banks (over $ 260 billion in national deposits); regional ($ 55 to $ 259 billion); and intermediate (less than $ 55 billion).

A digital contingent only ahead of 2019 levels

A seasoned banking data analyst, notes McAdam in an interview with The financial brand that general industry measures tend to increase by one or two percentage points from year to year. Even amid the disruption and technological advancements of the past decade, this is true.

An outlier of one year:

Covid’s boost to digital-only use was beyond remarkable. In 2019, digital-only consumers made up 30% of consumers, compared to 55% who used digital and branches. During 2020, digital-only users grew by 11 percentage points, reaching 41%.

“The digital transition went very well,” says McAdam, especially since so much else was going on in the banking industry at the time. Barring an unforeseen event, he continues, this rate of increase is unlikely to be repeated during 2021. However, analysts at JD Power expect much of the advancement in use digital banking is maintained and part of the momentum of the Covid year will continue.

Part of what can help this momentum continue is an increased effort to educate consumers on what they can do with digital channels, especially mobile banking. As the graph below shows, while highly engaged mobile users have used some mobile features extensively, there are others that could have been of great use and were barely touched by the comparison. . For example, only one in three highly engaged users have exploited the P2P payment capability despite a consumer trend towards contactless payments.

The reason can be seen in the last pair of bars on the graph: Two out of five mobile users among highly engaged people do not fully understand the service. And just over half of low engagement users aren’t fully mobile either.

( Read more: Consumers are less satisfied with digital-only banks (here’s why))

Comparison of mobile usage by high and low engagement during the pandemic

In general, the largest banks had an advantage over other institutions in most areas of mobile banking use. JD Power suggests that other financial institutions market and promote mobile deposits, mobile transfers, person-to-person payments, and mobile bill payments.

How mobile use differed by facility size during the pandemic

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Digital channels filled a critical gap in Covid … but something was missing

Being able to do so much digitally without going near a branch has been a remarkable achievement. But as mentioned at the start of the article, digital has left some consumers feeling disconnected.

McAdam explains that when a consumer goes to a branch to complete a transaction, they often feel like they are receiving advice and guidance on the fly, even voluntarily offered by staff. “Do you need help with anything else today?” or “Did you know you can avoid charges like these?” are prompts that a staff member will provide. Online and mobile can provide prompts, pop-ups, links, and even live chat, but it’s not quite the same thing.

The survey found that digital-only customers were less satisfied than digital consumers and branches. Among the results:

  • They judge their supplier to be “much less user-friendly and less customer-centric”.
  • They are less likely to believe their institution is communicating honestly and with helpful advice.
  • They tend to be unhappy with problem solving, product knowledge, fees, and advice.

McAdam says that while financial institutions have communicated through digital channels frequently during the pandemic, that communication has not always been effective, welcome, or personalized enough to make up for the lack of human contact.

A well-run contact center can fill the void somewhat, he suggests, and JD Power’s research indicates that customer service over the phone has improved year over year, despite the stress of increasing numbers. call volumes during the first part of the pandemic. The training will help this channel complement what consumers get from digital channels.

More important than ever:

The importance of such responsiveness overall will continue to be emphasized over the coming year. Even as reopenings continue and people feel some burdens are lifting, many are concerned about saving and building credit.

A worrying trend was seen in the study’s data regarding Gen Z satisfaction. This group had the smallest difference between satisfaction expressed by digital-only users and digital and branch users, but this was because both sub-groups gave establishments low satisfaction scores in several areas. categories. These included convenience, opening new accounts, mobile banking, ATMs and call centers.

McAdam says this trend has been seen in other work by JD Power. Generation Z uses digital channels more widely than other generations and sees a wider range of applications. They are not very impressed with the efforts of the banking industry.

Read more:

Communication lessons from the Covid era

The early days of the coronavirus crisis were a rush for all businesses, and communication has become essential for working not only with consumers and businesses, but also with staff. Financial marketers have found themselves trying to find the middle way on several fronts. They tried to find the right tone for the posts every step of the way, as well as the type of content people wanted. Finding the right channels for different messages, from the availability of Paycheck Protection Program loans to branch closures, has challenged them.

Consumer satisfaction was highest with messaging on mobile apps in 2020, followed by communication in branches, by phone, email, secure online banking, SMS, and postal mail.

An important lesson emerges from this classification. While text messaging has become a growing customer communication channel, it apparently isn’t a panacea.

“Satisfaction with SMS communication has dropped like a rock. Our data shows that satisfaction has fallen sharply with the “relevance” and “frequency” of proactive banking communications received via SMS, ”says McAdam.

In 2020, institutions sent more text messages, he continues, and “it is clear that some customers perceived the communications as too frequent and less relevant.” He adds that many consumers find the texts less clear than they should have been.

In other words:

By all means text if it’s critical, but think twice before using this channel and literally choose your words carefully. (And remember some consumers pay for SMS.)

Still, it’s important to understand that frequency itself isn’t the problem.

“Customers are not afraid of increased communication if it adds value, ”says McAdam. He says messaging through a mobile app and through secure online banking were more common in 2020, and satisfaction levels for both channels have increased from the company’s previous study.

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