Consumers have adopted digital devices and digital channels en masse. Yet many banks struggle to engage customers and prospects across these channels. They also fail to take advantage of opportunities to streamline their operations with technology. Why? Because they’ve bought in to a range of myths about the digital future.
Myth: Value is the main axis of customer segmentation.
Reality: How customers want to interact with banks—in branches, online, or over the phone—varies widely within customer segments and can’t be predicted by value alone. In addition, more frequent digital interactions do not necessarily mean fewer face-to-face interactions.
Myth: The branch is the main channel for interaction with customers and prospects.
Reality: Customers want to connect online and in-person, based on their preferences and needs at any given time. Banks must be able to follow their customers across these different channels as preferences change.
Myth: Sell first, then engage.
Reality: Banks earn the right to sell to customers and prospects by providing personalized advice first, and then offering appropriate financial products and services.
Myth: High-end technology is required across all processes.
Reality: Clients value seamless banking in every area, regardless of channel. Rather than trying to provide complicated services online, banks should focus on delivering fundamental banking services well at every customer touchpoint.
Myth: IT is complex and slow moving.
Reality: New technologies allow banks to offer more to their customers sooner. To increase speed, banks can reinvent processes with a new digital platform connected to legacy data only.
Myth: The branch owns the client relationship.
Reality: The whole organization has to focus on the client experience. Customers expect high quality and personalized service in the branch, on the phone, and online. The entire bank must own the client relationship.
Myth: Silos are efficient.
Reality: Silos complicate alignment. Different organizations within the bank need to work toward common goals to deliver value to customers. Banking executives and human resources departments should find ways to organize the company so everyone is focused on the same priorities.
Myth: Management doesn’t need to understand digital.
Reality: Multidisciplinary teams across the bank should embrace practices that emphasize testing, evaluating, and learning from new technology projects. That way, they can identify where and how value is being created and effectively communicate that to management.
Myth: HR prevents organizational change.
Reality: Through organization design, leadership development, and talent recruitment, human resources can help banks adapt and thrive in a changing environment.