Forrester’s Clarke: Digital banking is not self-service

Banks are rushing to grow digital capabilities, but they are neglecting the digital enablers that support the overall customer experience. Indeed, many customers did not have a contextually relevant experience with their bank, which diminished overall loyalty.

Alyson Clarke, principal analyst at Forrester Research and the author of a bank customer experience study released this month, said banks are not doing enough to make interactions with customers both personal and efficient. “Emotion has a bigger impact on brand loyalty than effectiveness, so emotion is what needs to be thought through,” she added. 

The survey found that the top multi-channel bank for customer service was Navy Federal Credit Union due to a focus on members, service and pricing. Clarke noted that the institution went out of its way to endear itself to members by loaning money to furloughed members during the government shutdown earlier this year. Those members were not charged interest on their loans and were able allowed to pay back the loans once they finally received their paychecks.

Meanwhile, in the digital-only banking category (called “direct banks” in the survey), the top digital-first bank for customer service was USAA, followed by Ally Bank. New entrants to digital-only still have kinks to iron out because some are relatively new to the market, the study noted. However, Marcus by Goldman Sachs significantly improved its position relative to last year. 

“Marcus hasn’t completely transformed its experience — or even launched a mobile app — but it did have a statistically significant improvement,” Clarke explained. “They’re the new kid on the block and finding their way.”

See also: No one-trick pony: How Ally got to $100b in deposits

Clarke emphasized that banks increasingly are pushing digital services as self-service tools. However, digital should be an enabler for a better overall experience, not a deterrent from customers having a more human experience with their banks, the study pointed out.

Oftentimes focusing solely on digital capabilities makes banks interchangeable from one another. “[Banks] have to stop forcing customers into digital self service,” Clarke said. “They need to help fully solve customer problems quickly, and they need to focus more on that.” 

Clarke singled out Ally because of its human-supported digital experience. Since its launch in 2004, the bank has acquired more than 1.9 million customers, $100 billion in deposits and claims more than 90 percent customer retention. “We’re not competing just on rate; we’re bringing the best of digital and human into the equation,” Dinesh Chopra, chief strategy officer at Ally, told Bank Innovation. 

Clarke emphasized that, if banks hope to retain their customers’ loyalty, they need to change their approaches. “It’s time to understand emotion, what drives emotion and start looking at digital tools and technologies to support [those] experiences,” she said.

 Suman Bhattacharyya contributed to this report.

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