4 Reasons Why Banks Need To Digitally Transform And Do It Quickly
The term ‘digital’ has been used fairly loosely over the past few years. It’s the cool or business term to describe efforts to modernize a business. The realities are that ‘digital’ has been around for a long time and likely started around the inception of the Internet. A website or a social media account like Facebook are means of digitally transforming a personal or corporate brand. Anyone can go ‘digital’. It’s what you put into the digital that counts.
If you’re digitally transforming for the sake of transforming or building an app because everyone is consuming content through their phones and you haven’t really identified what the key problem areas in your business are, then, there’s no point in getting started. Your efforts will be dismissed by your target market and the investment of time and money will be all for naught.
Poorly planned apps and websites actually plague the retail banks. Of course the banks are businesses and everyone fully understands that banks are providing a for-profit service, which entails the selling of products; however the entire experience lacks any personalization at the retail level. Due to lack of personalization, the only value that retail banks can offer comes in the form of price reduction and generic campaigns that cast the widest net and waits for fish, any fish to swim into the net.
Below are 4 obstacles for retail banks to consider prior to digital wealth transformation endeavors and how to tackle them:
This rings true throughout wealth management and is never more apparent than at the retail level. This would be considered as entry-level banking. The equivalent of this would be having too many children in a class for a single teacher; the child will not receive the optimal amount of attention, needed. The advisors or personal bankers have such a high volume of clients that it is extremely difficult for them to connect with the client. The end result is a product push or latest promotion. Retail banks could tackle the problem by creating an advisor/client journey that is bite sized and broken up into segments for return visits or follow-up meetings. The bite-sized journey can be digitized for the advisor/client to follow that sets expectations for future meetings (read: revenue generating opportunities) and best of all, that bite sized component of the journey focuses in on one aspect of the client’s financials and life and personalizes the entire experience. Changing the process to be short and bite-sized allows a retail advisor to accomplish the wealth management objective and move on while leaving the client feeling that the experience was very personalized.
This obstacle points more to the people that will be using the digital. Turnover at the retail advisor level is high in most countries. For the most part, people are in these roles as a means to move somewhere else within the bank or have defaulted to this role as a means to get away from what they were previously doing. This is sad but true. In order for a digital experience to be effective, it must be adopted and executed with purpose. Not everyone is built to be in the service industry. Hiring the wrong person to execute service related tasks will significantly reduce the effectiveness of a well laid out, empathetic advisor/client journey that is designed to ultimately sell more products and enhance a brand.
Often times, an application will be created to identify what products are missing in a client’s portfolio. The products can range from insurance, investments, lines-of-credit, etc. Then the retail advisor is immediately prompted to tell the client something along these lines, “Mr./Ms. Client, it looks like you are prequalified for a loan…” or “Mr./Ms. Client, it appears that you do not have medical insurance with our bank and we have very competitive rates with our partner XYZ Insurance Corp. Would you like to learn more about the products?” Although this strategy may work on some customers, this direct approach of product sale fails to connect with a large percentage of the customer base. A well thought out digital advisor journey will assist in setting the expectation of the customer meeting and better prepares the customer for introduction to the product and then onto the sale.
Have you ever watched the television series Undercover Boss? This series pretty much sums up the disconnect between senior management and the front line working level staff. In 100% of the episodes, the C-suite executive works undercover on the front lines to discover the obstacles employees face on a day-to-day basis that were unknown to the company in the past. Only then can the company and senior management truly connect with the working level employees and work towards creating a digital solution that will assist the employee/advisor be more effective and ultimately benefit the customer.
If you’re in the process of redesigning the advisor/client journey or are considering making the digital transformation jump, consider these 4 reasons and ask yourself if you are really addressing your business obstacles or is this just a window dressing exercise?
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