Digital banking channels are still proving to be a perplexing matter for financial institutions. They offer consumers greater convenience at a lower cost to banks and credit unions. However, the more complex and emotionally charged the transaction, the less likely a customer is to use their financial institution’s online services, which lack the assurance of face-to-face contact.
According to a 2013 Gallup study, in-person meetings are the preferred channel for opening and closing accounts, applying for loans, and getting financial advice. The same study indicates that customers prefer going online to pay bills, transfer funds between accounts, and requesting specific account information.
Though in some cases there is a notable conflict between customer wants and customer behavior, migrating customers from costly human channels to cost-effective digital channels comes with several risks, including lost revenue, increased attrition, decreased deposits, and diminished customer engagement.
Greater reliance on digital channels can have two unintended consequences that make planning an online strategy particularly challenging to financial institutions: the technology paradox and the remote user paradox. Gallup describes these as follows:
When customers begin using digital technology to perform simple tasks and transactions, such as checking balances, changing account information, or transferring funds, they tend to rely on human channels like branches and call centers to conduct more complex or difficult transactions. [This results in a technology paradox in which] front-line employees must… spend more of their time addressing complex or difficult activities.
The remote user paradox, is related to the technology paradox…. [It occurs] when customers begin to prefer using digital channels over in-person channels to conduct their banking business. Once this preference is established, each in-person interaction with a bank employee can have a disproportionate impact on that customer's relationship and engagement with the bank.
The technology paradox can reduce a financial institution’s revenues and increase its costs; the remote user paradox can damage customer retention, loyalty, and advocacy.
Fortunately, advances in web-based communication technology can enable banks and credit unions to reap more benefits from their online channels. Simply by integrating a complete customer engagement solution into their current Internet banking infrastructures, financial institutions can host business-quality video meetings between their experts and customers. During these meetings, all participants can share, edit, and sign all necessary documents. This allows remote users who would prefer to do all their banking through digital channels, even for the most complex transactions, to remain remote – thus eliminating the remote user paradox.
This solution also accommodates customers and members who still prefer to go to their local bank and credit union branches to discuss more intense transactions. Using tablets or laptops, branch staff, acting as technology concierges, can connect consumers with experts immediately. This nullifies the technology paradox by freeing front-line employees of complex activities.
Developing a digital channel strategy is no easy task, especially for banks and credit unions. Nevertheless, browser-based real-time communication tools make the challenge far less daunting – and potentially much more profitable.
eFace2Face enables you to boost your online presence with instant location-based call routing, face-to-face video meetings, dynamic content sharing, and a highly secure electronic signature process. Meet company CEO Dave Patten to learn more.