Mobile Drives Continuous Value Beyond the Point of Payment

Financial institutions are introducing new mobile and online technologies to create continuous value for customers throughout their purchasing journey. But what are the risks involved?
Customer Experience

Innovation, like money, doesn't grow on trees. Instead, when new trends emerge, brands eagerly work to cultivate and nurture fresh strategies so they may rejuvenate the overall customer experience. But, as with most aspects of life, the initial novelty must fade-what once was new becomes commonplace.

For the financial services sector, digital technology revolutionized the way most institutions conduct day-to-day transactions. From online bill payment to Web-based account management, these emerging tools brought efficiency and productivity to new levels by putting the consumer in control. Nevertheless, with growing demand driving increased implementation, these technologies have quickly become an integral component of the average customer strategy, thereby transitioning from differentiator to expectation.

Now, as these digital opportunities become accepted elements of the customer experience, institutions are beginning to branch out in an effort to increase engagement and boost loyalty. Financial firms wish to move beyond the point of payment so they may extend reach and strengthen customer relationships in ways that simple transactions cannot achieve.

"Right now, consumers consider their banking relationship to be transactional versus relationship-driven," says Chuck Cordray, CEO of Inlet LLC. "But research also shows that half of all consumers want their bank to become their centralized resource of bill payment and content presentment. By giving consumers what they want in that secure and digital environment, institutions will increase their engagement and loyalty. For the consumer, having more ease in managing their entire portfolio of payments, having access to account data required for making payments, and having bills in PDF format to retrieve later will be key differentiators in driving improvements in online banking, as well as newer solutions."

While many have embraced mobile technologies, bringing on-the-go convenience to the financial services sector, other institutions are looking to online strategies as tools for delivering content that goes beyond banks' traditional call of duty. Citi, for instance, operates its own YouTube channel, which provides both consumers and prospects with information that one might not typically expect from such an institution. Many of the available videos highlight Citi's work in the field, while others demonstrate how to use Citi's latest banking features, such as mobile check deposit. However, numerous videos reach outside the financial bubble to include advice for Citi customers, such as "Travel Smart with Citi" family vacation packing tips, in an effort to expand relationships and boost reliability and reputation

By integrating elements that are often indirectly related to the consumers' financial situation, institutions such as Citi are able to bring both clarity and assistance to an otherwise stagnant relationship. Yet, while offerings such as those mentioned above continue to gain momentum within the industry each day, many firms cannot seem to move beyond the point of payment and the growth (or supposed lack thereof) of transactional interactions.

Stalling the Slow Growth Misconception

Because digital technologies have become an accepted part of the financial customer experience, most firms have already introduced such conveniences, thereby changing the way consumers behave on a daily basis. Thus, adoption has seemingly slowed because all institutions now offer services that go beyond the traditional check, credit, and debit relationships they once had. But, as firms begin to look toward online and mobile strategies for increased engagement, this period of "slow growth" represents an egregious misnomer within the space.

Though the growth of alternative payment methods seems to have slowed, new engagement techniques and service offerings continue to expand as brands explore new innovations, such as mobile applications and video tutorials. Therefore, what many perceive as slow actually represents fragmentation with the financial services space. In this overly saturated market, where payment options no longer serve as differentiators, financial institutions must look beyond transactions to determine what customers look for from these relationships today so they may tailor content and services to fit these desires. Past behavioral and transactional data may even hold the key to unlocking these new strategic priorities.

"Understanding what drives customers' behaviors is key for designing and delivering products that bolster positive customer experiences, improve loyalty, and drive incremental revenues," says Dean Nolan, vice president at Saylent. "By using analytics to mine the treasure trove of customer transaction data they possess, institutions can gain actionable insights that will empower them to devise new offerings based on what motivates their customers, and evolve products accordingly."

Thus, adoption hasn't slowed, but merely has dispersed, for consumers now have numerous options ripe for their choosing. However, because financial institutions can no longer depend on these conveniences to attract new prospects, firms must realign their focus to emphasize retention or else risk losing their current client base to those companies that already do go beyond the point of payment.

"Sustained success in today's market requires the financial sector to focus its attention on retention, for the overall availability of the aforementioned technologies no longer differentiates one organization from another," says Bill McNeice, vice president, financial services at TeleTech. "Ultimately, however, financial institutions face the same obstacles every industry must tackle in today's market. With every new offering or innovative approach that comes along, customer expectations and demand grow, too. Consumers have becomes so accustomed to constant change, that elements which were new one moment are no longer alluring the next, making the average prospect harder and harder to please."

By using consumer data to inform their new strategies and offerings, financial institutions have the ability to align with the pulse of consumer behavior, allowing these firms to adopt the latest technologies carefully and deliberately.

Capital Bank Introduces Rewards Incentive to Increase Profitability

For Capital Bank, which operates 163 branches throughout Florida, North and South Carolina, Tennessee, and Virginia, leveraging analytics has allowed the brand to better understand its customers and, as a result, offer products and service based upon based on behavioral data that benefits both the consumer and the bank. Ultimately, the brand wished to increase customer profitability, improve satisfaction, and distinguish itself from the competition. Thus, Capital Bank embraced existing customer data, thereby using the resulting insights to more effectively target specific customer segments with new products specifically redesigned to improve customer experience and the bottom line.

By partnering with Account360, Capital Bank discovered that its CashBack Checking accounts saw lower-than-average debit card transaction sizes. In response, the brand introduced an additional reward tier that encourages higher debit transaction sizes, significantly increasing overall account profitability in the process. To date, debit card usage has risen by 92 percent, with a $230 increase in annual account profitability. Overall, monthly account profitability has increased by $19, while customer lifetime value has climbed to $2,507. Thus, by building upon the infrastructure and relationships in place, Capital Bank was able to introduce incentives that demonstrated customers' true value to the organization by bringing added value to the relationship.

Chase Brings 'My New Home' Mobile App to the Real Estate Market

As financial institutions look to expand their reach into relevant markets and infuse customer relationships with an added level of trust, many are working to create engagement opportunities that go beyond expectations. Chase, therefore, launched the My New Home mobile application, which provides homebuyers with a free tool that accompanies them along their purchase journey-from the time they start looking at houses until they close their mortgage. The application simplifies the home-buying experience by aggregating property information and offering financing resources in one convenient place. Users can search national listings based upon personal preferences, utilize Chase's payment calculator to determine affordability, and contact a Chase mortgage banker for information and assistance.

Users can also extend the mobile app experience by visiting the My New Home website to learn even more about the steps to buying a home and the types of mortgages available. The site also offers access to Chase's My New Home YouTube channel, which provides videos that teach customers what they need to do along their journeys, including real advice from homebuyers and industry experts. Chase's webinar goes even further by offering expert guidance and real-life examples that explain the home-buying and financing process from start to finish. By becoming a trusted source in the real estate space, Chase opens itself to new opportunities for increased business, positive word-of-mouth, and improved retention.