The Millennial Problem For the Banking Industry

The Millennial Disruption Index,” a three-year study conducted among 10,000 millennials, revealed some shocking facts – and not one of them looks good for the banking industry!

71% of millennials said that they would rather go to the dentist than listen to what their banks had to say to them. 73% of them preferred to address their financial needs through services offered by Google, Amazon, Apple, PayPal, and so on. Going one step further, 33% of them said that banks were becoming obsolete – that they believed they won’t even be needing the services of a bank in the future! What’s more, all four leading U.S. banks were rated among the least-loved brands by millennials!

From these results, it’s evident that banks are doing something wrong when it comes to addressing the needs of a whole generation – the one that is now taking over the workforce.

But what exactly is missing?

The answer, from an in-depth review of the study, seems to be poor customer experience.

Most millennials who participated in the study felt that there was nothing that differentiated one bank from another. This is because the differentiation they look for is beyond that of price, product, and location. They expect banks to differentiate themselves in terms of the customer experience they offer.

According to experts, customer experience is “the sum of all engagements a customer has with the company throughout the life cycle”. Its impact can be measured by the “emotional/sensory reaction” of the customer.

According to another study, better customer experience leads to higher recommendation rates, higher deposit shares, and a greater likelihood of existing customers purchasing new products and services from the same bank. On the other hand, banks that do not focus on customer experience risk losing up to 12.5% of their share of deposits.

Customers today expect banking to be a seamless digital experience that:

  • Is free from the hassles of physical documentation
  • Requires little waiting
  • Utilizes artificial intelligence (AI) solutions
  • Can integrate with Internet of Things (IoT)
  • Offers personalized services

In short, they want the banking industry to keep with the trends of digital transformation that are being embraced by other industries.

The banking industry has to realize that it is not just millennials but also older generations that are now comparing their services to those offered by other industries. It is, therefore, time to break out of traditional molds and legacy systems if the industry itself should prevail over non-traditional financial service providers.

So where do you begin?

Onboarding, being the first step in the banking process, is crucial to setting the stage for great customer experience. A fairly complex and time-consuming process, it is onboarding that causes much frustration among potential customers. It is during onboarding that customers decide whether they want to proceed with banking with a particular financial institution. The customer experience delivered at this stage can make or break a long-term relationship between a customer and the bank.

CloudNow’s solution for a global bank

An established global bank was finding it a challenge to keep up with evolving stakeholder demands. The merchant onboarding process took approximately ten days and was manually executed by account teams. The physical documents filled in by prospective customers and merchants were sent to the back office, where the time-consuming process of validating them ensued. What’s more, the bank’s legacy client application had become obsolete and was no longer communicating with their payment processor, compromising the quality of customer experience.

It wasn’t long before the bank began losing out on customers and merchants to banks with a more modern approach. They knew they had to act quickly, and they did – with CloudNow’s support!

Here’s what we did:

  • Built a web application with pre-programmed features to be used by branches/account teams
  • Digitally captured important details, validated them, and accepted digital signatures from merchants
  • Enabled the generation of sales orders based on case IDs and sent them to the payment processor
  • Simplified tracking and tracing of application statuses

Not only did we address the technical problems in the bank’s onboarding process, but we also increased the speed of the entire process by 30%. Want to know more? Read the full case study here.

Interested in revolutionizing your onboarding process? Get in touch with us!