Top 9 online banking trends that will shape 2021
Although back in 2019, online banking was becoming increasingly popular, many users still used to visit banks out of habit and solve all financial issues directly in branches. However, online banking trends began to interest millions of people in 2020 during the pandemic, when people were forced to sit at home, and traditional banks were closed and did not provide their services.
Already at that point, many savvy users began to choose their online bank, and those who had previously been reluctant to download apps from banks to their smartphones were happy to do so. Mobile apps and digital payments exploded around the world.
Reports from banks indicated that 15 to 20 percent more users have started using their mobile apps than they did before the pandemic. Chase said that the number of active users of the company’s mobile app, which allows almost all banking transactions, has grown to 40 million users.
Banks themselves have responded very actively to the changing needs of their customers, throwing all their energy into promoting their digital services. Digital banking broke every conceivable record in 2020, but what is interesting is that in 2021, when people once again have the freedom of action and the ability to visit bank branches, they are still using mobile apps and digital solutions from financial institutions. It’s not even just the habit itself, but the fact that many customers appreciated the high speed of all banking transactions and their convenience through mobile apps.
People have started to respond with more determination to firms’ innovative solutions. In particular, a report by McKinsey says that at first covid-19, more than 75% of consumers purchased new brands, to which they were previously indifferent. At the same time, 60% of these users continue to plan to buy new products for them.
However, along with high demand, users have become more demanding. In all the products they use, they demand more emotional connection and empathy. It means that banks should now offer different digital solutions and significantly expand their perception and increase the level of emotional connection. So, very shortly, we may no longer see the digital banking that we are used to. But right now, let’s look at its main trends, which we will be able to see as early as 2021.
1.Greater digitalization at every stage of service
Even though many banks continued to offer a wide range of services to their customers even during the pandemic, digitalization still left a lot to be desired. And while many banks claim to be implementing digital processes at every stage of their operations, it became clear that many financial institutions were still not ready for tough times during the pandemic. If, for example, their customers in 2020 wanted to apply for a loan or need to be identified, they still had to visit bank branches, putting their health at risk. It is not to say that the banks were unable to provide remote customer service, although it was a critical need at the time. This shortcoming of banks was addressed by financial startups, which quite deservedly took some of the customers for themselves.
From that point on, banks started paying more attention to digitalization.
2.A tendency to adjust quickly to customer needs
Financial institutions that pay maximum attention to technological development can adjust much faster to customer needs, which change quickly, literally at lightning speed.
These banks can identify techniques that are no longer relevant quickly, focus on in-demand technologies, and make changes to their financial products as needed.
Of course, it is possible and necessary to pay attention to digital transformation. Still, the problem is that any bank can be left without customers if they forget to focus on their primary consumers in its development. In short, a customer-oriented approach is always and everywhere, even if we are not talking about the financial market but any other company.
According to a survey, 79% of U.S. customers are willing to continue using its products that care about them. Customers need to feel that care.
Regardless of what products companies create, the customer should always be at the center of that product, and it is their needs that need to be addressed. It will be very easy for those firms that have already recognized the importance of digital technology and are incorporating it into their operations. Financial companies unwilling to adjust to customer needs and changing conditions will be forced out of the market.
3.Filling gaps in customer expectations
Suppose banks do not identify actual customer expectations, and a significant gap remains between what their customers expect and what the bank can offer. In that case, it can end badly for the bank. Decades ago, when there weren’t many banks globally, customers often had to adjust to the banks’ capabilities. Today it is the other way around, and every customer can go from one bank to another in a matter of minutes, and the financial institution is shortchanged.
So how can banks prevent this from happening? The only option would be to identify these gaps as soon as possible and fix them.
One option to solve such a problem is to involve innovative fintech startups. These fintech startups will significantly help traditional banks by attracting new customers who are mainly digitally demanding.
4.Emotional connection with customers
In today’s challenging times, when many people have been forced to sit at home and feel alone for a long time, it is essential that all companies, without exception, show maximum attention and care to customers. Banks should provide a wide range of services to their customers and establish an emotional connection with them, do everything possible to make customers feel cared for, and want to solve any problem as quickly as possible.
When states impose new restrictions because of the pandemic, people are isolated from society; they have to solve all financial issues through mobile applications and websites. In this situation, the banks that can show maximum participation and establish an emotional connection with all customers win in the fight for customers.
Many fintech companies are already creating personalized apps for their customers that are based on an emotional connection. As for traditional banks, they still keep their customers at a certain distance, trying to maintain their level of prominence.
There’s no doubt that a user-friendly user interface is a huge advantage and helps customers solve financial issues faster. But if the customer doesn’t feel that the bank is trying to help him, that the bank understands his problems and is trying to find the best solution for him, all this will harm the customer experience.
Platforms such as YouTube or Facebook provide a seamless experience, and banks could learn from this experience by designing their apps around it. By doing so, these apps could better meet all customer needs, but it seems that today’s traditional banks have much more pressing problems.
An example of a popular app that takes personalization to a higher level is Mint. In this app, every user can get an invaluable banking experience, thanks to banking services that Abe AI integrates with Google Home.
Today’s companies use legacy metrics that show how many customers and from what sources the company has attracted. Shortly, such metrics will become a thing of the past and will be replaced by metrics that focus on customer experience. In this case, the most important thing will be not how many clients the company managed to attract, but how well the banks serve its clients and how satisfied the clients are with the level of service. Speaking of mobile applications, it will evaluate the degree of convenience of using them. Recommendations, reviews, and comments from clients will be necessarily considered when compiling the new metrics.
To compile such metrics, banks will take into account the reasons why customers most often contact customer support, what are the app store ratings, what is the lifetime value of each customer, how often users change mobile apps, how active they are when making financial transactions, and so on.
6.Moving to an emotional intelligence model and automation
The world’s leading banks never tire of talking about implementing artificial intelligence in their work and other new technologies. However, emotional intelligence is coming to the forefront. A vivid example of how banks can implement emotional intelligence and what results it can lead to is the BELLA platform. This banking platform demonstrates well how different brands can incorporate emotional intelligence into their operations. All of this happens thanks to a dedicated, customer-focused conversational banking platform.
7.Bringing all bank systems to a single interface
Since the digitalization process in traditional banks took place in several stages, there was a serious fragmentation of the user experience. The visual components of websites, ATMs and mobile applications of the same bank look completely different and do not resemble each other. It leads to confusion for users of such a bank’s products, and the overall user experience suffers.
A case in point is the State Bank of India. The Indian regulator has released several applications at once, which allow to make deposits, manage bank cards, invest in financial markets, and so on. At first glance, this policy seems to be right, but each application has its own interface. The State Bank of India has gone a step further and developed one app that combines all these functions. What do you think is the interface of the app? It’s completely different from the other applications!
The bank customers don’t understand that because when they use the applications of the same bank, they expect a unified user experience and understand everything quickly. Only if all apps from the same bank have the same interface can customers get the experience they want. Otherwise, they’ll choose another bank that cares about their time and their interests.
8.Deeper collaboration with fintech companies
To be as efficient as possible, banks need to integrate digital processes into their operations. However, it’s not easy for banks that have been in the market for decades and have established procedures to go digital right away. Here, they will need some innovative solutions to make it more convenient for customers to work with them. They turn to fintech companies for these innovative solutions. And this cooperation proves to be very productive.
Commerzbank cooperates with IDnow. The latter company helps organize the process of client verification via video communication. Bankia actively works with Euro bits, helping to organize the process of invoicing clients.
9.Sustainable and continuous development
Today, it is not enough for a bank to provide quality customer service and a wide range of services to be competitive. They need to go beyond the scope of their business and contribute to a global common cause. For example, many customers want to be associated with financial institutions that contribute to the environment. Customers themselves are willing to participate in these programs, and if they feel that banks support them, customer loyalty to these institutions will increase significantly. An example would be the interaction between fintech and climate tech.
However, participation in conservation is not the only way for a bank to ensure its sustainability and increase customer loyalty. Tanda has gone to great lengths to ensure that low-income families have unhindered access to financial transactions and banking services. Beyonic offers advanced digital solutions for customers in Africa. And this list of initiatives could go on and on.
The need for banks to be digital existed before the pandemic, but starting in 2020, the need for this transition has accelerated dramatically. It’s no longer enough for customers to access basic banking services. They want empathy and complicity in their lives, a special emotional response from banks so that they can continue to use these banks’ services comfortably and remain loyal to them. And banks will have to respond to the changing needs of customers anyway.