Increasing customer experience: the case for self-service banking
What do we mean by self-service banking?
Customers want to be more in control of when and how they bank. They want to transact on their own terms and get it done quickly.
After being swept up in a digital wave fed by the pandemic, customers now have an expectation of being able to do everything with a series of clicks. Whether it’s shopping, working or banking, they want the freedom to decide when and how; whether to attend a specific location in person, or stay home on their device of choice.
The upshot of this change in consumer behavior is that digital and mobile banking are surging ahead.
93% banking online
An estimated 93% of UK respondents used some form of online banking in 2022.
Meanwhile, 39% can imagine handling all of their finances online in future
66% Americans lost without mobile
2 out of 3 US customers can’t do without their mobile banking apps.
90% of US consumers prefer to manage their finances all in one place, from monitoring account balances to applying for a mortgage.
Two thirds of Australians prefer mobile
In 2022, smartphones/tablets overtook internet banking as the most-used channel for accessing bank accounts in Australia, with nearly two-thirds of Australians now using mobile banking apps. Mobile banking also received the highest customer satisfaction rating of all available options.
Not surprising, as branches disappear
The transition to digital banking has been further hastened by mass closures of branches globally.
This movement has been driven by the fallout from Covid-19 and consolidations of financial institutions across the banking sector with through merger and acquisitions. However there is a secondary aspect to branch closures as banks look for ways to be more efficient and reduce their cost to serve. The cost-of-living crisis hasn’t just affected individuals, it has affected business – including banks.
Financial institutions are facing increased competition, especially with the rise in the number of challenger or digital banks. Many banks cite the rate at which customers are flocking to digital finance as another deathblow to branches.
A telling example is the UK’s TSB Bank. It had 475 branches in late 2020. In November 2021 (by which time it had only 290 branches) the bank announced it would close another 70 branches country wide by June 2022. The reason given? Acceleration of customer adoption of digital banking during the pandemic. 90% of transactions are now being made digitally, according to the TSB website; and 9 more branches will close in 2023.
UK customers respond to lack of branches
16% people in the UK have chosen to open or intend to open a digital-only bank account due to a lack of branches in their area.
24% digital-only banking
In 2023, 24% of Brits have a digital-only bank account. Another 5.3 million Brits (10%) intend to get a digital-only bank account in 2023. Convenience is the big driver.
23% decline
Between June 2017 and June 2021, there was a 23% decline in the number of bank branches in regional, suburban and metropolitan areas of Australia. The Finance Sector Union (FSU) says Australian banks shut more than 700 outlets in the past three years.
84 branches closed
Between 2010 and 2020, 366 bank branches reportedly closed in New Zealand. More have since been decommissioned. In one year the big five banks closed 84 branches.
Self-serve on mobile - and prosper
Today, being able to access, monitor and move money easily using your phone is a must-have, not a nice-to-have. The uptake in payments through e-wallets and digital or mobile wallets provides a tell-tale sign of the increased demand and ease of use.
Instore e-payments
In two years, e-wallet and digital or mobile wallets more than doubled their market share as a payment method in store in the UK. In 2019 they were at 4%, rising to 9% by 2021.
With that growth, it’s easy to understand why customers now expect to be able to complete other financial tasks on their mobile, whether updating their personal details, finding product information that answers their questions, applying for loans or changing passwords.
It is true that many transactions handled by financial institutions are more complex, risky and highly regulated than other kinds of everyday transactions. But that can’t be seen as a barrier.
Failing to provide self-serve options impacts a variety of important banking benchmarks, from mobile banking adoption to net promoter scores, wallet share and efficiency ratios.
If a bank doesn’t give customers the choice to self-serve, then a competitor ultimately will. And if you have the right technology provider as a partner, they can give you a solution that enables all aspects of self-service.
Self-service is transactional AND experiential
Once a bank has committed to empowering customers with self-service options, they need to implement the banking technology that will streamline that interaction. Just because the user has control, doesn’t mean you can get away with a below-par experience.
In fact, the right technology giving an enhanced experience can be the differentiating factor as to why a consumer would choose one bank over another.
Banks must also ensure their offering is truly omnichannel, with a customer’s history visible to all bank employees down the line. It must sync the self-service options with in-branch and customer help desks for a smooth, unified experience, without the customer getting lost or repeating themselves. Only then does it become a value add for customers.
It must be easy to understand how to self-serve, and be possible to resolve a request in close to real time.
That’s not to say there is no place for the human touch for some elements of the experience. But customers accustomed to smart, fast service from the likes of Amazon, Netflix and Uber increasingly demand 24/7 access and convenience through digital channels - and personalisation.
Make it personal
72% of US customers rate personalisation as “highly important” in today’s financial services landscape.
If done well, personalisation at scale can lead to annual revenue uplifts of 10%.
Personalisation starts with a customer opting into digital channels to receive push notifications from the bank, enabling a simpler, happier financial experience.
They might include text alerts about recurring payments due, notifications of opportunities to transact more efficiently, offers and advice based on their spending and habits.
This is where mobile is crucial. It is far easier to reach your customer base through their mobile; the device is generally within reach for the majority of their day and stays active during that time. Compare that to a web-based channel, where a customer must be logged on to receive any communications.
Mobile banking apps can also provide data to the bank, such as location and time of interaction with the app. Equipped with extra data, banks are in a better position to develop new products, optimise existing processes, better empower their customers, and improve the overall experience.
When you get it wrong…
A disjointed self-service experience, where for instance, customers have to provide the same information more than once, only serves to frustrate. Those types of experiences erode loyalty, and increase labour costs because the customer is then forced to call the customer care centre to solve their problem.
We see so many customers still being pushed offline for “self-serve” banking transactions: inevitably they abandon the exercise. Customers will not self-serve if the experience is difficult or annoying. User experience, content, and offerings should first and foremost help customers easily solve their problems and meet their needs.
And if an issue arises that requires extra help from a staff member, unless it’s a particularly weighty, high-stakes or unusual question, few people will willingly spend time in a branch queue or navigate through an interminable IVR dialogue. They increasingly want their questions – big and small, answered quickly.
Customer help via self-service
69% of US customers want to resolve as many issues as possible on their own using self-service options.
Sky-high cost savings
According to Gartner, an issue resolved through self-service alone can cost 80 to 100 times less than a live interaction, even when there’s just one step in the resolution journey.
Self-serve in banking is more than just conducting transactions and checking balances online or through mobile apps. It's also about being able to accomplish tasks that previously required contacting a call centre or visiting a physical branch, such as resolving problems or completing an electronic forms instead of paper forms.
With digital self-service capability, customers have the ability to manage their accounts and conduct various banking activities at their own convenience, without the need to rely on traditional customer service channels. This not only saves time and effort but also allows customers to have greater control over their financial needs and a better banking experience.
In customer support, self-service can increase live agent efficiency, and reduce resolution times for support staff.
When you get it right
Having digital self-service banking as part of your offering reduces the cost to serve and allows bank staff to be redeployed to higher value adding and more complex tasks. And spend much less time updating customer contact details or handling requests to switch from paper statements to emails.
Lower volumes through call centres and in branches bring down the cost to serve. Overheads like operator costs, technology and energy costs are reduced.
Implementing self-service banking technology can improve conversion rates and inspire more positive recommendations.
30% uptick in conversionsAttract 25 – 30% more customers A new website for KBC Bank Ireland converted 30% more customers after the bank revamped their website, allowing customers to submit applications more easily and self-serve without interruption.Credit Information Network had a 25% increase in corporate customers and 30% increase in individual customers after implementing digital services that freed customers from having to visit a branch.
Using the vital data and customer insights gained by viewing and tracking customer behaviour, e.g., what time they interact, the ways they interact, banks can target people at the right time with appropriate products and customer service messaging. They can start and maintain conversations with customers at times, and in channels, of the customer’s choosing, creating opportunities for engagement.
All without compromising on security – convenience must also be safe.
Benefit from a consultative approach
Ever since ATMs were first introduced, customers have embraced the idea of banking in their own time, using a simple process with minimal queues.
In their efforts to create an omnichannel environment full of seamless self-serve experiences, banks face many challenges – from lack of resources and investment, including analytical resources, to their ability to integrate data effectively. There is often poor communication between teams and siloed organisational structures.
Introducing self-service into a bank is never a one-size-fits-all process. Sandstone Technology works in a consultative way to enable the bank or financial institution to find the right path, so they can compete in the market and meet increasing customer expectations around self-service.
To really understand each bank’s problems, we ask questions and listen. We apply our deep knowledge in market to come up with solutions that might not be obvious to the bank. We educate clients on how technology will help their workflows, processes and decisioning.
That’s our process, and it’s how Sandstone Technology ensures we are the right fit for all our clients, for whatever term they might need us, whatever their objectives.
