Time to Sweat the Small Stuff
Transactions do not differentiate you. FIs can pave the way to innovation, to digital banking transformation, by fixing the broken small stuff and changing the their approach to customers.
Photo by John Arano on Unsplash
Small Broken Stuff Does Not Engage Customers
Some experiences I’ve had lately point to a lot of small broken digital and not digital stuff - and it’s not just in financial services.
At the “urging” of the retailer during an attempt to buy a new mattress, I created an account before I completed the purchase. The prose (or is that content?) on the site said having an account would make it easier for me to buy the mattresses. Um, no. I created the account but I was never able to log in to the account. I called customer support and spoke to a nice woman who said they were having a problem and the account should work in a few hours. It never did. I didn’t complete the transaction.
I went to a bookstore site where I have an account. “Welcome back Stessa!” the site greeted me. Great, I thought, I’m still logged in. Then I ordered the book my Early American book club was reading next. I went back to the site a few days later, logged in and couldn’t find my book order. After a nervous search of FAQs and help and an online chat later, I found out that I didn’t order the book through my account but as a guest. Turns out that even though the site greeted me by name, I was not logged in. The system saw me as a guest and not a member. And even though I had an order number, as a guest I could not track my orders. Even though the system had my name on my order and my account information it couldn’t pair them. I was so annoyed by this inconvenience that I bought another copy of the book somewhere else and when it arrived, I returned the book. PS: If you’ve ever wondered how American identity evolved and how the history of the American Revolution changed over time, read this book. And if you go to Yale University Press site, you’ll notice how small stuff can become really big stuff. Yale University Press’s shopping capability is broken and you have to go somewhere else. Where else, they don’t say.
I even found a glitch on Etsy. If you want to pay for a purchase with PayPal and send that item as a gift to someone else, well, you can’t. To send an item to someone else, you have to use a credit card.
I’m sure you have similar experiences.
I started to collect these tiny payments/digital ephemera because I noticed that they were happening more often. That the cumulation of these interactions has led me to stop an interaction – and especially a transaction – and never return to that retailer. I am always amazed that in my attempt to trade my money (in the case of the mattress, thousands of dollars) in exchange for a good or service, I have to sweat all the small stuff that companies couldn’t bother to test for or fix. I’m surprised that so many companies — including financial institutions - are sacrificing purchases, new customers and account openings so that they don’t have to sweat the small stuff.
Who Defines the Customer Experience?
Technology alone cannot fix the types of problems illustrated by my examples above. All of them have really nice website design. Despite how easy it was to find items I wanted with a few clicks, put them in a cart and remove them, when it counted, the company failed.
Or, perhaps more accurately, you - your bank or your digital banking solution expects customers to use it the way you defined the experience(s).
Who defines customer experience?
Tl;dr: customers. In the case of financial services, customers are both consumers and companies.
Does your financial institution or digital banking platform define customer experience as the digital banking or payments processes you define?
If so, your platform or FI is stuck in the last century of financial services. The century in which FIs – and frankly vendors – could dictate the what, when, where of the customer-bank interaction. Yes, nothing new in that. But this fact has not penetrated the actual capabilities of digital banking platforms and financial institutions expectations of them (and other innovations).
Customers create their own experiences
Today, in 2022, people, customers & businesses, have moved on from your processes. They create their own experiences with their financial institutions, grocery stores, bookstores, etc. They use technology but also the phone and sometimes a physical store.
In the present, the customer experience is not just digital.
The mattress company and the bookstore and even Etsy cannot force me or anyone else through a single process to get to the same end result: buying a thing. For example, I might leave a cart sitting because my daughter’s school called and I have to jump in the car to pick her up. Or I might leave it to research mattresses at another retailer or click on a mattress ad that starts popping in my browser. Etsy is actually quite good at remembering my cart even if I close the browser & don’t return for days. This also applies to financial institutions.
Financial institutions also have to be ready to help me however I seek help to accomplish my goal. When I run into a glitch (whether the bank knows about it or not), the FI must to be able to catch me before I close that browser or app and just walk away, annoyed and ready to tell someone how crappy that interaction was.
What this means is that neither your digital banking strategy nor your digital banking platform can engineer customer experiences and interactions. You also cannot drive customers, or prospective customers in a specific path to get the outcome only your FI desires.
Consumers, customers, people do what they want and control their own behaviors.
Takeaways
For financial institutions:
Before you innovate, fix broken stuff now. Sweating the small stuff will lead you to small innovations.
Stop over-analyzing. Your customers tell you what small stuff you need to sweat – by the number of customers who open accounts and then never use them, customers, or worse prospective customers, who start to open accounts and then abandon the process. The transactions that customers never use on their phone or browser because they can’t find them. Sweating through the small stuff will lead to real, small innovations.
Focus on understanding what a hidden tribe is and how to identify them. This change in your approach to customers is more important than ever. You can’t do it with technology and data alone but they will be critical to your success. By focusing on specific needs of small groups of people or companies, you will uncover small innovations.
For digital banking software providers:
Realize that the end of life is coming for your solutions that define capabilities - and differentiation - solely in terms of transactions and processes and targeting the same old demographics.
Take a long hard look at your solutions to see if they help your customers, financial institutions fix the small stuff.
Fix your small stuff.
Note: Huge Thank You to Esteban Kolsky who has thought long & brilliantly on this topic & kindly shared his analysis with me. Also, he can mention Foucalt, Gartner, Drucker & Tom Siebel in the same post about CX so you know he’s got the goods.
Bankers, IT and business alike, must understand how critical the ability to fix small stuff and to identify hidden tribes is to moving from out-of-date ways of developing products/services. Sweating the small stuff now paves the way to innovation, to digital banking transformation and to changing the your approach to customers.
Me, Elsewhere
On May 3rd, I’m moderating a great panel of folks for a conversation on innovation. We will cut through the hype and share practical advice for making your digital transformation efforts pay off. I suspect small innovations may be shared.
What can the Kardashians teach your financial institution about partnerships and innovation? How can working with empathic fintechs help you identify niche groups (aka hidden tribes) and innovate. All this and more in this this ebook that you can download at Praxent or Nymbus.
Adopt an Agile Digital Banking Platform: How bankers must have an agile digital banking platform to support both global and local trends and requirements to help them identify new niche markets that will drive innovation, create new value and increase profitability. In this report I identified a set of capabilities that a digital banking platform must have that will help take banks into a competitive future and urges banks to select a digital banking partner who shares their innovation, vision and support for new value creation.
How Your Financial Institution Can Leverage Niche Markets for Next-Level Growth: The old rules that influenced how mid-sized financial institutions acquired technology and the tradeoffs they had to make no longer apply. Why? Because new thinking on old models brings new ways for banks and credit unions to deliver new products and services to new niche customer markets. I moderated a vibrant discussion about this & more with Jeffery Kendall, Chairman and CEO, Nymbus and Tim Hamilton, CEO of Praxent.
Think like a Challenger: How banks and credit unions can compete and win - I recently moderated this conversation on challenger banks with Bryan Clagett of Moven and Ted Brown of Digital Onboarding.
Digital banking transformation’s surprising secret for success in Entersekt’s ebook New Directions in Authentication
Does It Fit Me? Tailored Banking - The Next Step in Digital Transformation.
Yes, I worked with clients on these ebooks and webinars. They may ask you for information before you can download or watch them. If you’re interested in collaborating with me on a similar project or something else completely different, please contact me at stessa@pivotassets.co or via LinkedIn.
Who writes PivotAssets?
I’m an independent analyst & consultant & a former Gartner analyst. I’ve worked in and covered the banking industry for over 2 decades. I write about digital banking in this newsletter - not to confirm what you know (and you are plenty smart!) but to give you a fresh perspective & analysis on the transformation that is —and isn’t happening - in the industry.
This newsletter is for people and companies who are trying to differentiate their banking software in an increasingly competitive market. It’s also for bankers and investors who want to know more about digital banking transformation strategies & the technologies that power them.