Retail banks have traditionally relied on in-person interactions to grow client relationships but are now facing serious competition from fintech companies who are moving digital financial services online, a trend accelerated during the recent pandemic.

The global health crisis triggered a digitization across the spectrum of banking by financial service providers eager to leverage the benefits of digital solutions for customers and bottom lines alike.

A year later, the results are clear: those who prioritized and invested in digital solutions are getting an edge: 59% of consumers said the pandemic increased their expectations of a financial institution’s digital capabilities.

Digital transformation was one of 2021’s most talked-about business imperative across the financial industry; however, studies show only 14% of financial services companies are actually in the process of implementing digital strategies.

So, while it is imperative for retail banks to leverage technology and meet changing customer needs, few seem to be doing so. This presents a unique opportunity wherein the window to embrace digitization is not yet closed, and forward-thinking retail banks can still get a leg up if they move quickly.  

As we’ll see, those adapting to this next normal - using an array of digital solutions to improve customer satisfaction by personalizing the customer experience in an engaging and secure way - are guaranteeing themselves a place in its future.

Driving customer engagement through personalization

Having already had amazing digital experiences in vastly different spheres of their life, from Netflix to Uber, consumers now routinely expect better digital tools to deliver more personalized offerings tailored to their experiences and needs.

And banking is no different: Salesforce found that 2/3 of today’s customers expect their financial institution to understand their unique needs and expectations, with over half (52%) expecting offers to always be personalized.

With something as personal and important as financial security, customers are ready to be engaged, and will let you know how they feel with their wallets: 43% of consumers in a 2020 survey said they've stopped doing business with companies that did a poor job personalizing the customer experience, up from 25% who said the same in 2019.

Personalization is everywhere. And retail banks that can provide the digital experience that customers want – tailored, engaging, reliable, authentic and informative – will be rewarded, not just with loyal customers but with new revenue streams.

Compliance and regulatory concerns

Ironically, however, the pursuit of this market share will come with a catch: many customers are hesitant to share their data, expecting banks to know their needs and personalize their interactions, but to be able to do so in a safe and secure way that respects their privacy.

This concern for security is reflected at the industry level, where digital transformation in a regulated sector like banking necessarily comes with a host compliance and data security challenges. And when you factor in the scale and consequence of corporate data leaks, online fraud, and security breaches, it’s unsurprising that most companies are worried about data breaches or legal violations when adding a new platform/tool to their tech stack.

Security issues go very public, very quickly, jeopardizing your entire company, and so compliance and data security are non-negotiable requirements when it comes to any platform or software to be used in the banking industry.

Trust is the foundation of retail banking and protecting it is paramount. And so, as institutions begin to digitize, they must be assured their technology partners have stringent guidelines and certifications around data security and storage of client information.

Improving the client experience with technology

With the proliferation of secure APIs, retail banking now has the freedom to choose from a spectrum of digital integrations which can be combined in any way financial institutions see fit. It creates the perfect opportunity for banks to create a proactive and responsive digital customer experience that clients now expect.

When retail banks implement the right tools and tech integrations, they bring value-added context to customer conversations and can personalize the digital banking experience to suit the specific needs of their own customers. In this way, integrations give institutions the freedom to build a digital experience that itself gives customers the freedom they want.

Digital tools and integrations spur financial institutions to be agile and innovative in how they nurture their client base. By providing choice, flexibility and personalization in the customer experience through plug and play integrations, retail banks can liberate themselves from a brick-and-mortar mindset and legacy systems. This positions them to meet the future head on, where success will depend on delivering new solutions and better experiences more quickly and efficiently than ever before. And this ultimately levels the playing field for them to compete more directly with other financial institutions, big and small.  

Meet the future, now

With the array of solutions available to them, digital-savvy consumers are no longer confining themselves to a single channel for their financial needs. When they switch platforms, clients want banks to keep up with the conversation and respond contextually, expecting the same high-quality, personalized digital experience across all channels.

This is why building connected, personalized digital experiences is so important, so that the customer feels taken care of every step of the way.

Those technologies - like Statflo’s one-to-one business text messaging - that can integrate seamlessly with existing systems, that can provide a consistency across as many channels as customers use, that can pull all the relevant data retail banks need and then reliably secure that data; it’s those technologies that will always help you deliver a better, more personalized customer experience.

Personalized, engaging and secure. Reliability and consistency across platforms. This is what today’s more discerning customers expect from their retail banks; missing these, financial institutions stuck in yesterday’s systems won't have the consumer experience to compete with those already leading the digital revolution of tomorrow.

Personalize your customer experience with Statflo’s one-to-one business text messaging. Book a demo today.