People's understanding of their personal financial situation is a complex matter. There are fixed and discretionary expenses, as well as daily and one-off costs. Also, people use a number of payment methods to manage their personal finance and are increasingly going online or mobile. These create new customer expectations, making their banking experience feel fragmented.
A new banking paradigm
Just two decades ago, person-to-person payments were made entirely by cash or cheque. At the end of the 20th century, online and then mobile payments took to the stage. Consumers now have plenty of payment choices, often involving third-party providers. As such, all banking related processes are becoming less visible to consumers’ eyes, making the process unclear and open to suspicion. People aren’t sure which intermediaries are responsible in the events of incidents or errors. People expect banks to proactively analyse their past, to facilitate their present, and offer advice for the future. The traditional concept of banking is simply outdated.
Consumer's financial life
When people think about their financial situation, they focus on their expenses, investments and savings. They look into their current and future financial needs, but rarely their banks. The banks come into the picture only when they are needed to facilitate transactions. For example, when a consumer considers buying a house, the initial concerns are whether he or she can afford it and the consequences of taking on a mortgage. The bank is often among the last factors in the decision making process.
Past, present and future of consumer's banking
While customers expect their banks to meet their current banking and financial needs, they are most satisfied when the banks can advise on their future financial choices based on their past and current needs and information. Research shows that half of the customers would engage more deeply with their banks, if they are supported to reach personal financial goals. Customers are seeking a proactive bank which is capable of advising them.
Consumers don't feel attached to their banks
As more payment methods become available (e.g. Paypal, Google Wallet, Apple Pay), banks become less tangible, making consumers feel less attached. In an interview, almost half of the consumers think all financial services providers are the same. Most of them do remain with their banks, not because they are loyal to them, but because they can’t be bothered to switch. But they are very likely to switch, once innovative newcomers or “industry disrupters” come to the market.
Consumers seek banks for support
Even though the bank disappears behind a multitude of alternative online and mobile payment methods, in the event of an incident, consumers suddenly actively start looking to their bank for help and support. People expect their bank to work with them to solve the problem, sometimes to actively make them aware of it, and in general to behave as their advocate. One-third of consumers reported having a problem in the last 12 months for which they contacted their bank to seek support.
Be the customer's advocate
Customer expectations of banks are becoming increasingly precise and sophisticated. One of the clearest emerging roles consumers wish their bank to take on is the one of advocate. They appreciate their banks to play this role most in times of incidents and to help them deal with third-party providers. Most importantly, consumers see it as the job of their bank to reduce the complexity of their financial lives. And lastly, they want their banks to correctly understand their financial needs and advise them on future financial decisions.