How to open the black box of what bank customers want How to open the black box of what bank customers want

How to open the black box of what bank customers want

Banks will need products that customers need and want to use


Keeping up with the pace of digital innovation is already a problem for banks, and it will only get more challenging as younger, digital-first customers become the core of their business.

While banks know they must develop and launch new tools that are useful, convenient and intuitive, figuring out which tools meet that objective and employing them often seems out of reach. Banks are still using traditional strategy and product development processes, which make it impossible to keep up with rising expectations around what is useful, convenient and intuitive.

Nothing makes this failure more evident than the rise of nonbank fintech competitors. If banks were successfully keeping pace with technological change, there would be much less opportunity for upstarts to fill product innovation gaps. This is particularly a problem for community banks that lack the resources of bigger banks to make technology improvements.

A design process would define “personas” based on user characteristics, motivations and paint points. These are essentially fictional characters to embody customers. The process can also define different types of bank employees to leverage their insights.Adobe Stock

To have a place in the future, banks need to explore new approaches to innovation. One approach that can help banks keep pace with customers’ needs and expectations is embracing design thinking, a methodology commonly used by technology companies to imagine new solutions and experiences.

While there are many design thinking principles, some introductory steps will get banks on their way to more quickly rolling out products that customers need and want to use.

First, technology companies will investigate what issues are troubling end users. Employing this step can help banks start to understand what problems they want to solve through product innovation.

Next, banks can synthesize the insights uncovered through the investigative process into distinct “personas” that define different types of customers by user characteristics, motivations and pain points. “Persona” is a design term; companies in effect create fictional characters to represent their customers, for whom they are designing a product. It can also be used to define different types of bank employees to leverage the insights they provide in the process.

Third, banks can use a collaborative session to brainstorm possible fixes to problems plaguing users, and identify solutions that can be approved for testing. Lastly, institutions can test prototypes with small, select groups of users.

By embracing these design thinking concepts, banks can discover where they are failing to provide convenient experiences for customers — and where they can create cross-channel experiences that tangibly impact their customers’ lives. Investigate processes can also start with bank employees, to understand what teams on the ground are already doing, what is working and what needs improvement.

For example, ABN AMRO uses responses from employee focus group workshops to identify how employees leverage the Dutch bank’s innovation resources and the challenges they face in trying to do so. Then, ABN AMRO uses the feedback to create personas that illustrate how different types of employees are using those resources and the bank shares this information with team members to help inform the next step — brainstorming possible solutions through workshops and other strategies.

Banks can use this and similar processes to address a diverse range of problems affecting any user group, including retail, small business and commercial customers, as well as internal staff. Additionally, the first two steps in the process — collecting customer information and categorizing it into distinct personas — form the foundation for building strategies around capturing specific customer segments, such as commercial clients or retail customers.

Without deep immersion into customer’s habits and experiences — which is central to this process — banks will continue to develop omni-channel and customer segmentation strategies in the dark, trying to guess where and how they can actually improve customers’ experiences and satisfaction.

To become truly customer-centric organizations, banks must do more than just guess what their customers need.


Shared from: American Banker / Paul Schaus, president, CEO and founder of CCG Catalyst

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