And then they respond to their premise with this: "What these banks don't realize is that, in most interactions, customers simply want the service encounter to be as short and painless as possible. Customer experience improvements that attempt to delight consumers often increase their burden without necessarily solving their problems."
The thing is, though, while customers want simple, short, and painless interactions, they also, seemingly paradoxically, want to be able to do that in multiple channels. As these channels multiply, the IT challenges for banks seeking to serve them do nothing but get more complicated.
Take tablet banking-the next step in mobile banking that started with early SMS texting and then progressed to smartphones. Synergistics Research recently studied the situation and found that more than 40% of households with internet connections have some form of tablet or e-reader with online capabilities, and one third of these report that they do some type of financial activity, such as balance inquiries, transfers, or loan payments on these devices.
"Tablets and e-readers are already entering their next level of usage beyond web-browsing and reading. Financial institutions that think of tablets or e-readers as a trendy development that they may at some point need to address in their channel strategies are already behind the curve. A significant proportion of consumers now own tablets and e-readers, and it is clear that users of these devices are widely embracing them for performing online financial activities," says William McCracken, CEO of Synergistics.
Other analysts have noted the same kind of trend across industries and indicative of consumer behavior in general.
Deloitte, for example, found a 160% growth year over year in the number of what they call digital omnivores, or those consumers who own the trio of tablets, smartphones, and laptops, and who now represent more than a quarter of U.S. consumers.
"Digital technology has emphatically triumphed in its penetration of the modern consumer lifestyle," says Gerald Belson, vice chairman at Deloitte. "While that trend line has been well documented, the surprise is how thoroughly digital tools have become essential across all age groups and consumer applications in the past year. This new reality creates opportunities-and an imperative-for organizations to differentiate themselves by utilizing multiple platforms to reach prospects and serve their customers."
Gartner did its own survey and concluded that mobility is reshaping consumer gadget spending and behavior.
"Early adopters tend to leave the home laptop in the bag and are abandoning the home office in favor of the lounge room couch or bedroom to do online activities in a more comfortable environment using a tablet or smartphone," says Nick Ingelbrecht, research director at Gartner. "This early adopter trend is becoming mainstream consumer behavior. Consequently, technology and service providers are faced with no alternative but to innovate for mobility. If they do nothing, they face a potential train wreck as consumers abandon gadgets, services, and applications that do not fully support changing mobile lifestyles."
By now, of course, the mobility onslaught is nothing new. What's new is the lightning speed with which it is entrenching itself, putting providers in the position of having to put something out there quicker than they can formulate rational, strategic plans for doing so.
That's what the business intelligence company Kontagent found in its recent study. It found that more than two-thirds of companies do not have a defined way to determine if mobile experiences are truly effective and only a third actually track and report specific performances of their must-have apps.
"Mobile adoption is outpacing any historical adoption trend. Businesses that will succeed on this next wave need to understand how to not only build outstanding experiences on mobile platforms, but also leverage user data rigorously in order to best measure and improve their mobile offerings," says Jeff Tseng, CEO, Kontagent.
Sure, that sounds like good advice, but however you look at it, it's not simple. And simple is supposedly what banks and companies in general need to deliver to their customers.
Maybe it's worthwhile to step back and consider exactly why consumers are gobbling up mobile in general, and tablets in particular. There are some answers.
For example, back to Synergistics. When it probed its survey participants a bit, it found that, "While not displacing computer-based online activities as a primary method just yet, the portability of tablets combined with their computer-like functionality-larger virtual keyboards and web browsing-suggests there will be continued wide-scale adoption by consumers."
And back to Gartner, which looked at the rates at which consumers replace their various gadgets. It concluded that "replacements and upgrades of fixed devices such as desktop PCs and game consoles will be deferred or abandoned as consumers find they can do most of what they want on more recently purchased portable devices anywhere they want, when they want. The things they can't do will either get postponed to a later time or be forgotten about altogether as consumers reorganize tasks and activities to the devices and services they prefer to use."
Taking these two observations together, one could conclude that consumers themselves are seeking simplicity. They are finding that the new devices, including tablets, allow them to do most of what they used to do on computers, but with the ease of use that just is not as available on the much-smaller smart phone keyboard and/or interface.
The Boston Consulting Group, in yet another study, concludes that too much complexity in a company's IT environment drives up costs and slows down performance. No kidding. However, it also allows that some IT complexity is inevitable, by allowing the company to create a more differentiated product or service.
The key, then, is to simplify the organization's IT organization, while matching the consumer's desire for simplicity in operation. At this point, then, it's easy just to say to banks, go all-in on mobility-enabled channels. Of course, though, it's not that simple.
But Boston Consulting Group does offer some suggestions to reduce IT complexity in the work place, albeit at a very high level. It cites these factors:
• Intelligent demand management, or providing sufficient transparency to the business to allow it to make informed decisions about its demand for IT services in light of costs and added business value.
• Scenario-based application rationalization, or deciding on the best mix of applications through consolidation, replacement, or decommissioning.
• Infrastructure technology pattern reduction, or shrinking the number of hardware, software, and middleware configurations to minimize the variety of technologies, processes, and skills necessary for delivery.
• A simplified IT organization and an enabled IT work force, or trimming the management layers and optimizing spans of control.
• Effective governance and simplified processes, or optimizing the relationship between the business and IT while using leaner and more agile methodologies.
• A shared-services model and optimized sourcing.
It just goes to show that simplicity can be anything but simple.
Sources used in this article include:
- Goldman Sachs, J.P. Morgan and Citigroup Fintech Investments Growing Like Never Before
- U.S. Banks Leaders in Technology Innovation According to New Survey
- Beyond the Efficiency Ratio: Leveraging Automation to Improve Profitability and Experience
- The Real Reasons Bank Customers Move to Direct Banks
- What the shutdown of JPMorgan’s Finn can teach banks: Even though you build it, they might not come.