The COVID-19 pandemic was a devasting event for almost all of us, but of the very few good things that came out of it, one which has stood out the most among researchers and industry observers is the growth of the digital banking customer.
As compared to metrics of 2018, in today's post-pandemic world, 50% more consumers are actively using digital channels to both join a new bank as well as maintain steady communication with their existing banks.
This and several other metrics go on to prove that the digital consumer is here to stay.
However, the question that remains is, how can you ensure that your digital consumers are engaged throughout your interactions?
This is exactly what we will be answering in today’s blog post.
Without further ado, let’s get started.
Table of Contents
- Who Is the Digital Consumer?
- How to Keep the Digital Consumer Engaged?
- Comprehend Shift in Consumer Behaviour and Preference
- Expectations Across Segments
- Reshaped Working Models
- Agility and Faster Market Launch
- Digital Humanity
- The Way Ahead
- The Reference Shelf
Who Is the Digital Consumer?
As bankers, one of the first and most important aspects we need to realize is understanding the true identity and essence of a digital consumer.
In simple terms, a digital consumer can be categorized as one who primarily relies on digital channels (social media, email, chatbots etc.) for either communicating with their existing banks or, from time to time join a new banking organization.
Since 2015 banking institutions across the globe have witnessed a steady rise in the number of digital consumers; however, a paramount shift occurred post the pandemic.
For instance, according to data acquired by Accenture, as compared to 2018, 50% more consumers in 2021 primarily depend on digital channels to communicate with their banks.
This and several other metrics go on to signify the importance of accurately identifying the digital consumers of today and tomorrow.
How to Keep the Digital Consumer Engaged?
As per industry observers and peer-reviewed journals, there are several methodologies both legacy and neo-banking institutions can adapt to ensure constant engagement among digital consumers. The most significant of them are as shared below.
Comprehend Shift in Consumer Behaviour and Preference
Before you embark on executing a strategy to keep the digital consumer engaged, your first priority should be understanding the rapid shift occurring in consumer behaviour and preferences.
Before the pandemic, most consumers chose digital banking as their preferred method of communication due to the advantages it equipped them with. However, in a post-pandemic world, the same has been turned onto its head.
Today, most digital banking consumers choose this as their primary option because it has transitioned from being a luxury to a necessity.
This essentially translates to the fact that while consumers were agreeable with having to engage in offline communications for some banking services, these days, they want each and every banking service delivered digitally to them. Right from applying for a debit card to applying for a personal loan, each of your key offerings needs to be digitized on a priority if you want to engage the digital consumer.
Expectations Across Segments
Once you have digitized your key offerings, the next step in the process is to understand the needs and expectations of your digital consumers across segments.
For instance, the Accenture study I cited earlier highlighted a particularly interesting point, which displays that there are essentially two segments of consumers; one is the digital-savvy one who still prefers in-branch expectations, and the other is the digital entrant who prefers the comfort of their couch for interactions.
Realizing the difference between consumer segments, their needs and then building a bridge to accommodate both their requests will not only help you keep the digital consumer engaged but also convert interactions to connections.
Reshaped Working Models
For ages, banking institutions have urged consumers to digitally interact with them for process-based tasks, such as opening a savings account or actualizing the interest payments on the same, while encouraging them to focus on more complex transactions such as applying for a loan or accurately calculating the loan amortization schedule, offline.
Due to this, in most developed nations, branches have reduced capacity by 2% to 4%; however, in many developing countries, it has contributed to an increased closure of branches.
Although financial institutions incorporated several changes in their business model to offer a hybrid consumer interaction portal, the pandemic has accelerated the digitization pace for several institutions.
For instance, now that institutions are required to offer every banking service online, they need to incorporate cutting edge technology such that customers can be seamlessly served for every transaction.
Agility and Faster Market Launch
While digital consumers arrive with several advantages for banking institutions, they also arrive with several challenges of their own.
For instance, digital consumers want financial products and services customized to their exact needs and digitally delivered to them faster compared to traditional products.
This increased demand for customers naturally translates to the fact that banking institutions need to incorporate agility and integrate technologies into their existing architecture, which facilitate the faster market launch.
Incorporating agility into your organization will not only translate to increased working efficiency but also positively impact your bottom line. Along with this, a greater focus on customization and faster market launch means you can win over and retain your customers for the long haul and not just a single transaction.
Last but not least, as digital banking continues to rise in popularity, it is crucial that banking institutions inject humanity into their offerings. While it is true that a fully digital channel arrives with greater profits, however, it is crucial that institutions leverage human capital in their digital efforts as well.
As I pointed out in an earlier article, with the constant rise in popularity of digital banking, several customer segments are suffering from jeopardized trust and inability to form connections.
It is important to realize that sole reliance on digital channels does increase customer interaction, but it does not necessarily translate into customer connections and thus negatively affects long term retention.
The Way Ahead
The digital customer is here to stay, and as Juniper Research pointed out in recent research, more than half of the global population is expected to use digital banking by 2026. However, one aspect which will determine your success amongst this increasing popularity is your continued commitment to keep the digital consumer engaged.
Thank you for reading, and I will see you in the next one.