The digital age implies the industry now has to «delight» customers to succeed, a Bain & Co report says. finews.asia looks at how it can compete with the likes of YouTube and Twitter.
We are still in January, but the 2023 banking catchword may already be upon us. The way forward is nothing less than the provision of full-fledged customer «delight». At least that seems to be one of the findings of a study by management consultancy Bain & Co that was released on Monday.
The report, which provided a wide-ranging view of digital banking in Hong Kong, said that the city’s adoption rate of tech-based banking tools has «soared» since the start of the pandemic, with the percentage of virtual account openings and credit card applications nearly doubling between 2019 and the first half of 2021.
For many clients, that means that digital is not a secondary conduit, but the main, primary one. Online and mobile banking are now the most-used channels, with the latter reaching 80 percent of customers across different age groups and asset levels. Also, clients interact with banks slightly more than once a week on a mobile basis while less than half of them have even entered a branch in the past year.
An interesting finding from the study, particularly for the wealth management and private banking industry, was that the more investable assets a client had the more they used digital channels, particularly in comparison with the mass retail segment.
Also, Bain cited Hang Seng’s head of wealth and personal banking Rannie Lee, who maintained that despite all this, customers still valued human contact when dealing with complex or emotionally fraught financial needs involving mortgage applications, wealth planning, and large international fund transfers.
«These so-called moments of truth can delight or disappoint customers and often define their overall relationship with or attitude toward a bank,» Bain indicated.
But Bain goes further than all that, saying that Hong Kong customers are attracted by rewards, with benefits and discounts being key drivers of the so-called relationship experience.
«Reward features have the highest likelihood to delight customers when offered, or to annoy customers if absent,» the report says.
A virtual pure play, ZA Bank, even combines rewards and gamification on its mobile app to drive user engagement, with its alternate chief executive Calvin Ng saying: «We can understand users’ behavior while they get to know more about our products. We value every moment to delight our users and deepen the relationship.»
That makes several mentions of delight in one sole management consultant report. Let’s stop, digress, take a moment to breathe, and look at the staid conventional definition of «delight».
According to the Cambridge dictionary, the noun and the verb mean something or someone that gives «great pleasure, satisfaction, or happiness».
Merriam-Webster says much the same, although as a US reference book it seems slightly less circumspect, saying, as a transitive verb, it serves to give «keen enjoyment». In short, not characteristics banking has been much known for in the past.
But eliciting feelings of delight potentially confronts finance with similar challenges to that faced by social and traditional media. The lure of clickbait.
That is particularly so given Bain says customers are increasingly prepared to click «buy» on digital wealth and insurance products.
Indeed, mobile phone apps were used to buy almost half (45 percent) of mutual funds and 40 percent of life insurance policies (by value).
Buy With Face ID
That is a slippery slope to be on. It seems unlikely that clients have fully read and digested a prospectus and investment track record of any specific mutual fund before they glare at their mobile screen in agreement.
The same goes for life insurance. How closely have they looked at future savings projections and the disability and unemployment clauses before swiping or letting their Face ID do the work to buy it?
The problem here is that banking is not social – or traditional – media for that matter.
Scroll and Forget
Once you read a mistake-ridden news story or an inferior comment, you just scroll and forget – at least most of the time.
That even goes for the now infamous, overused term we know as «fake news».
But with banks, it doesn’t work like that. You can get yourself unintentionally stuck with that mutual fund and life insurance policy for a very long time.
Read More: The Future of Banking May Lie in Clickbait