Subscribe

Digital customers need more than just digital

Consumers, on average, unlock their mobile phone 110 times a day. You're likely to check your phone before you finish reading this article – if you're not already reading it on your mobile.

There are countless examples of how the smartphone has changed day-to-day life and banking is no exception. Payment and banking services are at a customers' fingertips all of the time.

"However, the future of banking is not all about mobile. Focusing only on digital channels will not drive greater customer satisfaction. Just the opposite."
Stephen Karpin, Group Country Manager, Visa

Financial services and technology companies already know they need to get their digital strategy right in order to stay relevant and competitive. But what we're seeing for the first time is the impact mobile has on the customer banking relationship. A bank's digital customer is the most valuable customer.

The Visa-RFi Group Australian Payments Report, released today, shows customers who use mobile banking are more loyal, satisfied and stronger advocates of their bank than customers who do not use digital banking channels.

Click image to zoom Tap image to zoom

The research found digital customers on average hold more products (2.8 products) with their main bank than people who don't bank online or on their mobile at all (2.2 products). They are more likely to approach their primary bank for additional products such as mortgages and loans, presenting big opportunities for cross-sell.

Digital customers also report higher customer satisfaction metrics with three quarters of digital customers being highly satisfied with their main bank. This satisfaction drops to 68 per cent among less digital customers - those who only use online banking via a desktop or laptop, not a mobile device.

Click image to zoom Tap image to zoom

We see similar results when it comes to advocacy, where 68 per cent of digital customers say they're highly likely to recommend their main bank, compared with 57 per cent of less digitally engaged customers. This suggests driving customers to use digital channels is an effective means of improving customer satisfaction and banks should focus on migrating their main financial institution customers towards digital interactions.

However, the future of banking is not all about mobile. Focusing only on digital channels will not drive greater customer satisfaction. Just the opposite.

Digital customers who are intending to switch their main bank in the next 12 months say it's because they're dissatisfied with the customer service. They may choose to interact with their bank mostly through digital channels but they still demand customer support across all channels. 70 -per cent of digital customers still view the branch as the most important banking channel. Smartphones may be at the centre of commerce - but not at the expense of face-to-face interaction.

So the key for banks is to offer customers a seamless omni-channel experience. Digital customers on average use more than twice as many channels (three channels) to interact with their main bank as non-digital customers (one channel).

Click image to zoom Tap image to zoom

So think mobile first but don't think of mobile standalone.

The customer's journey to digital starts with the payment account. Once banks hold the primary credit and debit card relationships, their customers are more likely to take out other products, including digital products.

At Visa we see it this way: a Visa card is no longer just a card; it's a Visa account that is also used in the digital world. What this means for banks is that the goal is no longer top of wallet but top of device, platform and merchant.

The Australian banking industry is in a race for the digital account. In order to keep pace, investments in all aspects of the customer experience, from branch to mobile, have to come together to meet the expectations of the new digital customer.

Stephen Karpin, Group Country Manager, Visa Australia, New Zealand & South Pacific.

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

editor's picks

10 Jun 2015

Cryptic questions for cryptocurrencies

Andrew Cornell | Managing Editor bluenotes

Cryptocurrencies and their enabling technologies have been back in the news with more traditional financial institutions globally, including banks, announcing trials or at least interest.

04 May 2015

The RBA must put a price on innovation

Andrew Cornell | Managing Editor bluenotes

As giants like Apple and Google and China Union Pay, along with literally thousands of would-be disruptors, try to upend the global payments system, it may seem slightly anachronistic the Reserve Bank of Australia still has its focus on interchange fees – an agenda kicked off well over a decade ago when Apple still just made computers and Google was barely a verb.