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In this News Insight, American Banker looks at the disparity between what consumers want and what bankers think they want. For deeper insights, download the Celent report, “Delivering Excellence in Customer Service.” —Samsung Insights editorial team
Many bankers think they can read their customers like an open book, but in fact they may need to put in some extra research time.
According to a new study by the Boston consulting firm Celent, banks overestimate how much their customers want to use smartphones to handle banking tasks.
The disconnect is not a fatal flaw, said Bob Meara, an analyst at Celent. But it suggests that many banks need to rethink their entire approach to learning about their customer base.
The disparity between what consumers want and what bankers think they want can be boiled down to the types of data that banks have historically collected. The average wait time for a consumer in a teller line at a given time of day? That is something most bankers can tell you, Meara said. How much consumers prefer digital to in-person interactions? That is another story.
“It’s not that we don’t think digital is where everything is going,” Meara said. “But even among the largest banks, half of their customers don’t use or don’t ever intend to use mobile banking.”
About 45% of the bankers that Celent surveyed said that their customers prefer in-person interactions with their bank. But 55% of consumers said they prefer in-person interactions. Conversely, about 15% of the bankers said consumers want to do business with them exclusively through online channels. But only 6% of consumers said they feel that way.
Celent’s report was based on a survey, conducted in February, of about 30 bankers and 2,350 bank and credit union customers. The bankers and customers were chosen to represent financial institutions from a range of asset sizes.
To be certain, plenty of banks do collect data on consumer preferences. Bankers at the $390 million-asset Essex Savings Bank in Essex, Conn., are constantly speaking to customers to ascertain what they like and dislike, said CEO Greg Shook.
“We ask if they’re using e-statements, if they still call a phone number to make transactions,” Shook said. “We sit down with them and ask them how they want to make transactions. We are all over whatever the customer wants.”
But too many banks neglect that part of the customer-service equation, Meara said. That is because for years, many institutions emphasized sales growth above all else. How customers preferred to conduct their banking was not even on the radar at many banks.
“There really has been a sea change in that customer experience is really important and if those aren’t in good shape, our bottom line won’t be,” he said. “Many banks are thinking that maybe they need to dial back the sales culture.”
Some of the disconnect can be attributed to an employee’s specific job function. Employees in operations tend to have a more accurate view of how many customers prefer to do business inside a branch, while those in strategy or innovation roles have an “overinflated” view of customers’ preference for digital channels, the Celent report said.
“People in those roles are massive digital advocates,” Meara said. “Their role is to move to digital those organizations that have an awful lot of momentum in doing things the old way.”
Then again, maybe it should not be a surprise that many customers do not care much for mobile banking. After all, a recent J.D. Power study that showed digital-only banking consumers are the least satisfied.
Even if banks are still working out the kinks in their mobile banking apps, it is still telling that some bankers do not see the need to ask customers if they want to use the app, Shook said. It is important for bankers to get busy talking to customers, instead of just compiling statistics, he said.
“We all say that we like to service people, but if you sit down with them and ask them what they’re worried about, that’s a different conversation than just opening a checking account for them,” Shook said.
Customer service excellence requires consistently exceeding expectations, and banks can’t deliver that with digital alone. Download this report from Celent exploring why banks concerned with delivering excellent customer service must execute well on when and how their customers choose to interact with them.