Financial services 2018: The battle for experience
There is a quiet battle being waged across America. It’s a battle for experience and it has hundreds of combatants.
At stake are literally TRILLIONS of dollars of annual transactions.
And almost no one knows it’s happening…
The financial services industry has operated in an environment of hyper-change for over 30 years, beginning with deregulation changes passed by Congress in the early 1980s. In that time, the number of banking entities dropped from over 15,000 to less than 8,000 through mergers and acquisitions, opening up opportunities for new products and creating pressure to monetize knowledge of the customer. Small community banks merged into regional, national and then global conglomerates. System complexity multiplied and offerings diversified as financial institutions’ one-stop banking brought deposit, checking, loans, investments, retirement and a host of commercial banking products.
In the late 1990s, online investing firms like Scottrade, E*TRADE and others entered the picture offering a new model for online customer interactions. These companies proved that consumers were willing to entrust their money to financial services firms with no branches. While there had been earlier offerings such as within Microsoft Money or via proprietary systems, the online investment shops approached their launches with a Silicon Valley feel, the exact opposite customer experience from their Wall Street counterparts.
Since 2000, we’ve seen online banking go from novelty to critical for any banking consumer. The days of brick and mortar-focused banking strategies are fading fast. Customers are increasingly basing their banking business primarily upon an institution’s online capabilities and the customer experience. Many of the fastest-growing financial services firms don’t even have physical bank branches. A number of the traditional Wall Street investment banks have even responded in kind with digital banking offerings.
One final data point: by 2014, the American Bankers Association reported that even the majority of Americans aged 55 and over preferred banking online as opposed to in-branch or via ATM. The customer has spoken—the future of banking will be via online experiences.
The Battle for Experience
TEKsystems works with over 650 financial services organizations each year, providing everything from technology and deployment assistance, to UX and AI. We see the hundreds of mobile developers and digital strategists employed at our largest banking customers. We’re in the conference rooms of regional banks, surrounded by a floor-to-ceiling tapestry of competitive screenshots and wire flows. The language of banking is no longer one of “service calls” and “SQL statements”; those have long since been replaced by “user-centric design”, “IoT”, “AI” and “digital experience.”
Every institution is racing to arm itself with the digital natives who can move its platform forward and keep pace with the required features to avoid customer churn. Digital platform spend is at record levels and user experience services have doubled year over year for many organizations. So, if the biggest institutions have the most talent and the deepest pockets, don’t they automatically win the customer? What can a regional or community bank do to survive and even thrive in this battle for customer experience?
How to Win the Battle for Experience
See how TEKsystems Digital can help transform, extend or accelerate your digital experiences.