As bankers shift their focus from in-branch to digital experiences, they shouldn’t sacrifice personal service and connections with customers. Instead, there is an opportunity to build and strengthen banking relationships by implementing new technology designed and thought through with the customer in mind.
Banks have long differentiated themselves through customer service. Much of this was related to the geographic advantage banks had within their communities. To transact, the customer had to come into the branch and have face-to-face conversations with the bank staff, who in turn relied on these conversations to determine the right services and offerings to meet the needs of their customers.
With the advancement of digital-first banking, banks have been disconnected from these face-to-face conversations and are losing the voice of the customer when considering their products and services. However, this doesn’t have to be the case. If technology is implemented with the customer in mind, it can be more convenient while also meeting their need at just the right time - further strengthening the customer relationships.
For instance, consider customer Jane Smith, who works a regular 9-5 marketing job and does freelance writing and photography around her community. She relies on her primary bank to provide retail banking services for her personal finances as well as her side business. For Jane and other customers like her, it is hard to define where her personal finances stop, and her business finances begin. The retail features offered by her bank are not enough to manage her business, but the business banking services are too complex and expensive. Because of this, Jane begins to shop for alternatives and discovers the best solutions are provided by non-bank providers such as PayPal, Square and QuickBooks. Jane easily enrolls into each of these services and quickly realizes she can easily send her customers invoices and get paid online via card or ACH.
One day, she notices a problem with one of her customer payments. Her side business is taking off and she has just received a large deposit for a new project. The deposit will enable her to go buy the new equipment she needs to complete it. However, the non-bank service provider is holding her money and she is getting nowhere with their customer service. Jane is stressed because her new project is at risk and she doesn’t know if or when she will ever get her money. Jane wished there was someone she could go visit in person to explain her situation and get this problem resolved.
Jane’s story is not unique. There are 30.7 million small businesses in the United States and more Americans are taking up a side hustle to supplement their income. In 2019, the number of workers classified as occasional independents rose 6.3 percent to 15 million. That number is up more than 40 percent since 2016. Customers like Jane are shopping for financial products that make it easy for them to get paid and manage their business finances. Designing retail and small business accounts with Jane in mind represents a massive opportunity to grow deposits and strengthen customer relationships.
Banks can differentiate themselves by offering digital-first experiences that are convenient for the customer, backed by superior customer service that is there when the customer needs it most. If bankers can focus on putting the customer first, they will be better poised for long-term growth and success within their communities.
Derik Sutton is the vice president of product & experience at Autobooks (autobooks.co), a small business payment and accounting platform integrated within a financial institution’s digital banking experience.