Independent Banker - April 2018 - 48

20%
T
wenty percent of bank
customers are " digitalonly "
users, preferring
to prospect and purchase
online, according
to the Accenture
Global Consumer Pulse
Research study. Different
consumers embrace
digital technology in
different ways, but the
trend is clear: Across the board, digital
is a force to be reckoned with. Even
people who rely mainly on traditional
channels will dip their toes in available
digital channels from time to time.
The Accenture study noted that
most banks will find it essential to
adapt to customers' new channel
preferences. Consumers between 18
and 34-those who have grown up
immersed in digital technologies-are
two to three times more likely than
consumers over 55 to want more
digital interactions than companies
currently support.
Tech heavyweight Amazon
understands the value of meeting
customer expectations. In a Bain &
Company survey of more than 133,000
banking customers in 22 countries,
consumers said they trust Amazon
and PayPal with their money nearly as
46 ICBA Independent Banker April 2018
much as their banking provider.
Some 55 percent of U.S. consumers
said they're open to buying financial
products from established tech firms,
according to the survey. And 73 percent
of millennials said they would be
more excited about a new financial
offering from the likes of Amazon,
Google, PayPal or Square than from
their bank.
The survey showed that if Amazon
decided to move into banking, it
would be buoyed by some major
advantages over traditional banks and
credit unions: better data, a superior
customer experience (often referred
to as CX), a digitally native platform
and tremendous customer loyalty.
Certainly, all of these reasons are
why almost half of banks and credit
unions consider tech companies like
Amazon, Google, Facebook and Apple
to be a " significant threat, " according
to a study by Infosys Finacle.
All things being equal, two out of
three American adults-including
59 percent of current megabank
customers-say they'd rather bank
at a community bank or credit union
than at a national bank, indicates
The Financial Brand. But wanting
to and actually doing so are two
different things.
An August 2017 report from the
World Economic Forum concluded
that major tech companies like Amazon
pose a much bigger and realistic
existential threat to traditional banking
providers than fintech startups.
Given that Amazon already provides
payment services, credit cards and
loans, Bain's Gerard du Toit says it's
plausible Amazon could offer a bona
fide suite of retail banking services in
the very near future.
" It's just a matter of time before
big tech players enter retail banking
in the U.S., " du Toit told Bloomberg.
" You're going to see a Darwinian
battle between banks and tech firms,
and some surprising combinations on
how they get to market. "
Amazon, for one, is working on
a seamless transaction experience,
explains Eric Cook, a digital strategist
with WSI in Battle Creek, Mich.
For example, Amazon's new physical
store lets customers walk in, pick
up the items they want and walk
out without paying for them in the
traditional sense. Through a series of
scanners and technology, your purchase
is automatically paid for via an
Amazon Prime account.
Similarly, when the Uber ridesharing
service was introduced, talk
centered on the frictionless " Uber
experience " : Consumers no longer
had to think about payment. " You get
out of the car and the transaction just
happens, " says Cook.
Cook, who led the Community
of bank customers are digital-only
Source: Accenture Global Consumer Pulse Research
Banking and the Amazon Effect
Learning Lab presentation at ICBA's
annual Community Banking LIVE in
March, believes community bankers
also have opportunities to discover
where friction exists and lessen or
eliminate it, whether it be in the loan
approval process or when obtaining
an extended line of credit.
Here are five ways community
banks can improve their customer
experience to gain and retain
happy customers.
Independent Banker - April 2018

Table of Contents for the Digital Edition of Independent Banker - April 2018
