Derek Corcoran
Derek Corcoran

Banks have work to do to meet customers’ digital needs

The results of a new study released by fintech firm Avoka show big banks have a long way to go before they can digitally satisfy their customers.

Looking at 10 leading US banks, the study evaluated 913 products from personal banking, business banking and wealth management.

Chances are your satisfaction with your bank’s digital presence depends on what type of customer you are.

If you only care about personal banking things may be fine. Close to 60 percent of personal banking products can be applied for online.

Or they may not be, if you want to apply for those products on your mobile phone. Only 13 percent of products can be applied for online.

If you are a small business owner you most definitely are not happy. In addition to all of the things you have to do, visiting a bank branch to apply for 77 percent of available business products is one more item on the list. Only one percent of businesses are able to open bank accounts or business credit cards on their smart phones.

Avoka Chief Experience Officer Derek Corcoran said staff from the company conducting the study looked at the online application experience for each of those 913 products, considering such factors as the presence and utility of any “apply now” button, mobile experience and the ability to save a partially completed application.

The study also compared the United States with Australia and the United Kingdom.

“Australia emerged as a clear leader,” Mr. Corcoran said. “Twenty-six percent of all products were available with a mobile responsive application experience.”

Those rates drop to 16 percent in the United Kingdom and 11 percent in the United States, Mr. Corcoran added.

“It’s been nine years since Steve Jobs launched the iPhone and the fact only 11 percent of US banking products can be applied via a mobile phone says a lot.”

With a combined total of 913 products, that means the average American bank included in the study has 91 products available. When one considers it takes a team of developers between 12 and 18 months to build one mobile-friendly application, they may never catch up.

Mr. Corcoran explained that when banks look under the hood to tackle the digitizing of one product, they find a larger challenge than perhaps they expected. Each of the many different devices may present unique issues with java script, for example, or even the lines around a box.

Take the option of being able to save an incomplete application and returning to it later, a key factor in customer conversion rates. People may start applying on their mobile during the morning commute, continue at the office when the boss is not looking, and finish up on the home computer after the kids have gone to bed.

Not only are the banks having to take multiple environments, but data security becomes another factor.

Because of the combination of these factors and limited resources, the banks have to pick their development spots, Mr. Corcoran explained.

“Because of the effort required, the obvious compromise for the banks is to focus on the highest volume products.”

That leaves business banking and wealth management as massive opportunities for banks should they ever get around to digital self-service.

Early in 2016, one percent of business banking products came with a mobile-friendly application experience, Mr. Corcoran said. In the United Kingdom the rate doubles. To two percent. The Aussies lead the pack at nine percent.

“The message we’re going to banks with is small business owners are the busiest people in the world,” Mr. Corcoran said. “Asking them to drop in is crazy.”

Mr. Corcoran said the average Chase location in the United States is open 51 hours a week, one of the reasons bing so they can better serve small businesses. Another study showed the average small business owner works 52 hours per week.

“There is great opportunity in giving that segment convenient access,” Mr. Corcoran added.

Offer that experience and sell more products, Mr. Corcoran explained. One study of small business digital banking experiences showed the average number of products owners applied for almost tripled, from 1.4 to 4.0, in only six weeks.

“Small businesses rewarded the bank with more business,” Mr. Corcoran said.

There is also opportunity in digitizing wealth management products, Mr. Corcoran said.

“There’s a dichotomy of many people feeling comfortable talking to a financial advisor,” Mr. Corcoran admitted. “The other side of that is millennials probably has as much faith in a algorithm providing them with a good investment strategy as an individual.”

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