Look no further than Amazon or Apple to learn what customers want from their financial services providers. When retailers can deliver goods to customers within hours and routinely serve up personalized recommendations, financial firms are having to rethink how they build relationships with their customers.
While fintech startups have a head start, legacy financial institutions are developing new ways to meet demands for speed, efficiency and personalization from customers, according to finance executives at the Customer Experience in Financial Services conference in Boston on Monday.
“Retail is actually setting the bar for our customers around what they expect from us,” said Melissa Kivett, chief customer experience and marketing officer at Prudential. She pointed to recent Medallia research that suggested 93% of customers felt offline retailers met or exceeded their expectations (the figure for digital-only retailers was 95%). “Their expectations are increasing because what they’re getting from other industries keeps showing up.”
In particular, the speed with which e-commerce providers operate and their use of data-driven recommendations are key differentiators. For Bank of America, however, it’s not as simple as just copying the Amazon experience.
“It’’s less about taking what [Amazon is] doing and trying to implement that in our environment and more about how it’s changing our customers’ expectations and perceptions,” said Ashley Ross, client care executive at Bank of America. “They might not be telling us ‘I like my Prime subscription,’ but ‘I want you to send me my debit card faster’.” To meet this expectation for example, BofA implemented a digital debit card, she noted.
Banks, however, have begun to apply some aspects of an Amazon approach to online banking. This involves taking stock of how a customer interacts with the brand online and making it easier to convert an interested customer through ongoing interaction. “[With online retail] they pretty much follow you to the grave,” said Michel Van Woudenberg, vice president of customer experience banking product development at Oracle. “When you try to buy something on Amazon, you throw it in your basket. Then life happens and you don’t have that attention anymore, but that basket with those red socks will follow you around the planet.”
Within the past year, Bank of America rolled out capabilities to save financial product applications to let customers begin a process and finish it on their own time. “We launched a ‘save’ feature when you’re working on a [loan, mortgage or other financial product] application, so you can go in the next day to complete it,” said Ross. To minimize cart abandonment, the bank can get in touch with the customer through email or re-target them when they return to the site or, in a limited number of cases, on third-party sites, she added.
Embedding financial services within other e-commerce channels is another way companies are reaching customers. At Prudential, for example, the company last year partnered with baby registry Babylist as a means of serving up relevant recommendations to prospective customers. Expecting parents who create a Babylist registry can view a Prudential policy alongside other preparing-for-baby necessities, like car seats and cribs, and ask friends and family to contribute towards premiums. “When you’re setting up a registry, that’s a real need for when you would think about life insurance,” said Kivett.
While following an e-commerce-type model for financial services shows promise, the process likely will be incremental. “The challenge we have in importing retail concepts is how do we do that in a highly regulated environment,” said Joe Dugan, senior vice president and go to market officer at Five Star Bank. “A lot of our lack of clarity has to do with the amount of disclosure we’re required to do.”