According to a recent Oracle Report, 81 percent of consumers use digital channels to engage with their bank. That statistic is telling for financial institutions of any size and highlights the importance of maintaining a digital banking strategy. However, it also raises an important question: what specific digital solutions and services will reap the greatest rewards for your institution?
CSI’s Guide to Omnichannel Banking Strategies has explored this very question in detail. The eBook breaks down the benefits of digital banking as a whole, and delves into the critical components modern banking customers are looking for.
Why the Digital Focus?
Incorporating an integrated digital banking platform—one that connects directly with your core banking system—as a strategic focus transcends simply giving the customer what they want; it is as practical as it is attractive.
Today’s consumer base demands more from their products and services—particularly those they obtain from their financial institutions. And banks have plenty of reason to take notice of these demands: a recent study by PwC shows that 46 percent of consumers now interact with their banks through digital channels only—altogether skipping physical channels. In the company’s 2012 survey, that number was 27 percent—making for a huge jump.
So customers are using digital channels more often, but what specific benefit does that bring to your bank? Let’s take a look at the three major rewards your institution gains through digital banking.
1. A “Stickier” Customer
Customer acquisition is always a strategic foundation for financial institutions, but customer retention is just as important.
Gaining “sticky” customers indicates that a customer is likely to stay with your institution by using a wide variety of your products or services. So, how can digital banking enhancements increase your customers’ loyalty? The answer lies in digital banking’s unique ability to promote self-service.
According to PwC’s report, customers who use self-service channels (mobile, online, tablet) report a greater need for a range of financial products. Simply put, this means that digital customers are more likely to use multiple products that your bank offers, creating a stickier relationship.
2. Profitable Customers, Lower Cost
Digital banking also improves customer profitability, while simultaneously decreasing the maintenance cost to your bank.
Take a look at these stats: the PwC report found that in-person branch visits cost banks $4 per transaction, while on average, online (PC) and mobile banking cost $0.09 and $0.19 per transaction, respectively. Allowing customers to “self-serve” simple functions such as account transfers and deposits frees up your front-line employees to focus on more complex customer requests.
In addition, delivering banking services via an integrated digital banking platform also can make customers more profitable. For example, new account opening solutions integrate into digital banking apps or browsers, which banks can promote through custom messaging within the system. This ability to recommend products and services to digital customers from anywhere increases their overall profitability.
3. Extended Reach
Digital banking also allows your bank to extend its reach well beyond the confines of traditional channels.
According to Oracle’s study, 69 percent of respondents want to experience their entire financial lifecycle on digital channels. And with the rise of remote and digital banking technologies, customers carry a bank around in their purse or pocket. A quick tap on the bank’s app and a host of transactions—that once required a trip into the branch—can be completed in seconds.
This means that banking customers can now utilize a host of functions from anywhere; so your bank can service a larger geographic market segment while meeting the needs of local customers through integrated digital banking. For instance, mobile deposit allows remote customers to deposit funds no matter where they are.
This shift decreases the likelihood that customers who move away will choose another institution out of necessity. With digital features, your bank’s reach is essentially limitless.
Omnichannel eBook and Podcast Available
Learn more about the rewards of digital banking by reading CSI’s Omnichannel eBook, which outlines effective digital banking strategies and how your bank can stay competitive. Or, if podcasts are your thing, check out the latest episode of Fintech Focus on digital banking.
Shane Ferrell serves as CSI’s vice president of digital strategy. In his role, he leads the strategic direction of CSI’s digital banking suite of products, which includes omnichannel, internet and mobile banking. During his year career with CSI, Shane has held various positions, from conversions to product management.