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Banks: We need to talk digital mindset

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As the level of digital adoption continues to grow, the discussion around how banks can adopt a ‘digital mindset’ continues to linger. But too much focus seems to be on technology, thinks Michael Hewitt, content marketing manager at Stickyeyes. Instead, it should be on the conversations banks are having with their customers.

Banking used to be a chore. It was a service that was based on interaction and dialogue, just as long as that dialogue could take place between the business hours of Monday to Friday, 9am until 5pm, in dreary branch buildings where staff would spend more time trying to direct you to in-branch machines than they would helping you with your query. If that experience wasn’t for you, you could try the call centre, where you would usually spend time listening to tedious stock music when all you need is a brass band playing ‘Mambo No 5’ to help you remember the array of security questions that would follow. Then digital happened.

We no longer need to go through that hassle and, instead, we can transact from the comfort of our own homes. We can get into the habits of tracking our spending much more diligently by logging into our accounts in a matter of seconds. We can pay for our share of last night’s meal with just a few taps, and we can also check our balance almost instantly. It is why mobile is now the fast-growing channel in the banking sector.

But that still doesn’t mean that the banking industry has really ‘got’ what digital consumers expect. Ever since the financial crisis of 2008, the relationship between the financial services sector and consumers has been a tortuous one, and that still hasn’t really healed. While consumer trust in banks is currently at its highest level since 2012, just 36% believe that the banks work in the best interests of their consumers, according to YouGov.

Digital mind-sets are not based in technology, but in culture

All too often, organisations see ‘being a digital brand’ as a technological solution; digital channels are something that can be solved with an app or reworked web interface, but that is only a fraction of the story. Consumers are not necessarily something that you can segment into ‘digital’ and ‘non-digital’. We are, after all, simply people trying to do what we want to do with our finances, and communicate with our bank, on the terms that work best for us.

Yes, technology plays a role, and the history of banking is littered with examples of brands that haven’t necessarily got that technology aspect right, but this is about understanding the relationship between banking and the consumer. It’s a relationship that has long shown signs of strain, and much of that strain can be down to whether consumers can trust that their bank is being fair and transparent.

In early April 2018, the internet challenger bank Monzo received reports from about 50 customers of fraudulent activity on their accounts. In investigating those claims, Monzo found a common correlation – all of the affected cards had been used at around the same time on Ticketmaster. Monzo notified Ticketmaster, MasterCard, other banks and authorities in the US. It also sent 6,000 replacement cards to customers who had previously used Ticketmaster – even for customers whose accounts hadn’t been compromised.

It took until late June – around six weeks later - for MasterCard to issue an alert about a potential issue to other banks, and for Ticketmaster to disclose details of the breach.

That is the digital mind-set personified. In the very same month that a competitor, TSB, was trying to ‘media manage’ its disastrous IT migration, a mobile start-up bank was proactively identifying, remedying and notifying others about an issue that affected its customers. This wasn’t a reflection of the bank’s technology, systems or processes; it was a reflection of their modus-operandi, their values and their ability to use data to identify issues relevant to their customers. It was transparent, it was honest and it was trustworthy. And with that mind-set, banks can foster much greater levels of communication and personalisation with their customers.

When you contrast how mobile upstarts such as Monzo behave compared to the traditional brands during a time of crisis, the statistic that nearly two thirds of us don’t believe banks are looking out for their customers makes sense.

Transparency, not technology, will breed trust

While digital is far from the panacea to repairing those trust issues, it can certainly help to ease some key consumer pain points.

Many of us now engage with our banks entirely on a digital level, and yet instead of using the data and the insight that comes from those interactions, many of them are still using the same dumb tactics to try to push offers and products that are irrelevant, impersonal and ill-timed.

There’s an argument that comparing the likes of Monzo or its stablemates such as Starling to the mainstream banking brands isn’t fair. After all, these are smaller, much more nimble operations with bespoke IT infrastructure that aren’t hampered by the burden of legacy issues and huge corporate governance. But achieving this digital mind-set isn’t about IT and process, but is instead about doing what these brands should have been doing anyway – thinking about the wants and needs of the customer, using data to inform that insight, and responding to those needs in a way that is customer-focused and transparent.

Digital hasn’t fundamentally changed what consumers want from their bank, it is just made it easier for them interact with their bank. But while the method to digitally facilitate the conversation is there, too many traditional banks aren’t engaging in the conversation. The banks that do, and respond to those audiences, will be the ones that thrive in that digital arena.

This article originally appeared in The Drum Network Finance Supplement. For more information on how to get involved, please contact tehmeena.latif@thedrum.com

Michael Hewitt, content marketing manager, Stickyeyes

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