The Future Customer of Banks and Credit Unions: Navigating Digital Transformation
- Written by Ariel Timothy, Head of Growth and Partnerships, APAC, Aryza
As we navigate an era marked by rapid technological advancements, the landscape of banking and finance is undergoing a profound transformation. The future customer of banks and credit unions is not just a participant in this change but a driving force behind it. Understanding this future customer and engaging with them effectively is crucial for survival and success, with digital transformation standing at the heart of this evolution, reshaping how these institutions operate and interact with their customers.
The Evolution of ‘The Future Customer’
The ‘future customer’ is defined by a mixture of digital understanding, increased financial literacy, and heightened expectations for a seamless, intuitive and personalised experience, demanding more from financial institutions than ever before.
Financial literacy is of paramount importance in today's complex and interconnected world. Many future customers are already financially literate, but not everyone is there yet. Thus, fostering financial freedom becomes a collective obligation for financial institutions, governments, and communities. It empowers individuals with the knowledge and skills they need to make informed and responsible decisions about their money, enabling them to achieve their financial goals and have a secure financial future. With access to a wealth of information online, future customers are more aware of financial products and services. They seek transparency and value, preferring straightforward, jargon-free communication and tools that help them make informed decisions.
Additionally, the future customers expect personalised experiences tailored to their unique needs and preferences, with generic services no longer sufficient. They look for institutions that use data intelligently to offer customised financial advice, planning, services, and product recommendations. Real-time updates and personalised insights build trust, leading to a more informed and empowered relationship with financial institutions. By empowering individuals to navigate the digital financial landscape safely and efficiently, it promotes the widespread adoption of innovative financial services.
There is also a growing awareness amongst customers of institutions' social and environmental impact, with many favouring ones that demonstrate a commitment to ethical practices, sustainability and social responsibility. This means that institutions, if not already, need to begin aligning ESG goals with the expectations of its customers.
Embracing Digital Transformation
To meet the expectations of future customers, banks and credit unions must embrace digital transformation. This involves more than just adopting new technologies; it requires a fundamental shift in mindset and operations.
Digital transformation through artificial intelligence (AI) enables a superior customer experience through highly customised and personalised services with real-time financial advice. Chatbots and virtual assistants engage with customers 24/7, addressing queries and facilitating transactions with efficiency and precision. This not only reduces response times but also fosters deeper customer engagement and experience.
Automation and digital tools are streamlining operational efficiency. As banks adapt to an ever-changing landscape, automation emerges as a powerful tool, revolutionising traditional practices and enhancing customer experiences. By handling routine tasks, automation can significantly reduce operational costs and free up human resources for more complex customer-focused activities and faster service delivery.
In many areas of the world, a significant portion of the population remains unbanked or underbanked, lacking access to basic financial services. Institutions should be, if not already, looking to implement digital platforms that can help reach this population, providing them with access to essential financial services, empowering individuals to engage confidently with their finances.
As cyber threats become more sophisticated, the future customer also demands robust security measures, and by meeting those expectations, financial institutions will be able to build a strong level of trust with their customers.
Engagement is Key
To effectively engage with the future customer, banks and credit unions must adopt a customer-centric approach, leveraging technology to foster deeper relationships and trust.
Digital channels are vital as they enable continuous engagement with customers, allowing regular interactions and providing valuable content, financial education, and support. Providing the right tools and resources that empower customers to take control of their financial well-being and enhance their financial literacy, which is essential for customer engagement.
Creating a collaborative ecosystem, such as forming partnerships with fintech companies and other digital service providers allows banks and credit unions to integrate innovative solutions quickly and efficiently, whilst expanding the range of services offered to customers.
Additionally, implementing mechanisms for regular feedback can help understand customer needs and pain points, with this information being crucial for continuous improvement and innovation.
The future customer is a digitally savvy, informed, and demanding individual who values personalised, transparent, and ethical financial services. Embracing digital transformation is not just an option but a necessity for institutions to stay relevant and competitive. By enhancing customer experience, leveraging data for personalisation, streamlining operations, and focusing on security, banks and credit unions can effectively engage the future customer, ensuring sustained growth and success.
