How Customer Expectations are Driving Digital Change
Digital transformation has been a significant part of this industry for some time now with financial brands constantly searching for innovative ways to augment their customer experience with the latest developments in technology.
However, one thing we’ve noticed is how this is almost always discussed as a top-down process, i.e., companies drive the change by deciding a certain piece of technology will make the experience better for their customers, when in fact pre-existing customer expectations is often the driving factor behind digital transformation.
We think it’s about time therefore that we put digital transformation under the microscope for a moment and examine just how much of an impact customer expectations have on the decisions companies make regarding digital change.
COVID-19
Perhaps the clearest example of how customer expectations have driven digital change can be found in the developments which emerged as a direct result of the COVID-19 crisis which dominated the globe during 2020 and 2021.
With billions of people all forced to stay inside under lockdown restrictions, the expectations those customers had of the companies they do business with transformed overnight. Suddenly, interacting with brands using digital channels was the only option available and those brands which weren’t already suitably mature in their digital capabilities were forced – by customer expectations – to evolve or perish.
We always think of ecommerce and social media when we are discussing how the pandemic impacted online behavior, but the financial industry is particularly relevant when discussing these circumstances. People became incredibly concerned about their financial situation during this time, with many losing their jobs [even though for many this was a temporary situation] and having to rely on social security, stimulus checks, and other forms of support to pay their bills and purchase essential products.
This drove customers to expect their banks to offer multiple methods of checking their balance, moving money around, paying bills, temporarily suspending certain payments to allow them some breathing room and more. This drove financial institutions to implement greater levels of digital service than were available before and it was all driven by the expectations of their customers.
"Two years into the pandemic, it’s clear that COVID-19 has driven yet another acceleration in digital transformation,” writes BMO Financial Group Chief Digital Officer, Mathew Mehrotra. "Successive lockdowns have forced us all to adapt, shifting our lives indoors and online in new ways, and igniting a great leap forward driven by context and our collective expectations. That leap forward will endure long past the end of the pandemic.”
That last sentence is important. The pandemic may have provided a microcosm of how customer expectations can fuel digital change, but it’s a process which has been going on for decades. the launches of the first "Instabank” machines [precursors to the modern ATM] of the 1970s, self-directed investing in the late 1980s, and online banking in the mid-1990s were all brought about by financial brands trying to meet the evolving expectations of customers.
Post-COVID
The question therefore is how customer expectations will evolve now we are moving out of the worst days of the pandemic and what impact that will have on the digital transformation of financial brands.
It seems likely the demand for digital services will remain, but to what extent will that need to be balanced with the expectation of brick-and-mortar branches and omnichannel experiences. Research shows that banking customers still want to be able to talk face-to-face when discussing important financial matters such as taking out a loan or mortgage, even if they’re happy to perform everyday transactions such as checking their balance or transferring money using online portals or smartphone apps.
"Within those sectors that can go digital, success belongs to those who have embraced the transformation,” concludes Mehrotra. "Perhaps the biggest lesson from this last phase is that our work is never done, and there is no such thing as a digital goal so much as there is a digital mindset: a willingness to listen and learn, adopt new approaches, and continually improve. This comes with the modesty that nobody can predict the future and that, ultimately, the customer is always right.”
Final Thoughts
Meeting customer expectations will continue to be a key determiner of success when it comes to digital transformation. Brands which stick to the top-down method of introducing vacuous innovations which do not solve the problems their customers are actually experiencing – and in some cases create entirely new ones – are going to meet with increasing levels of resistance and risk hemorrhaging customers and losing them to their more bottom-up competitors.
Meeting customer expectations through digital change is sure to be a hot topic at Future Digital Finance 2023, being held in March at the Hyatt Regency Austin, TX.
Download the agenda today for more information and insights.