Three steps for banks to combat the Coronavirus recession
Know how banks and financial institutions worldwide are paving the way to recovery with intelligent customer engagement tools.
PremiumThe Coronavirus recession is the next big challenge to banks, financial services, and insurance companies since the Great Recession(2007-2009). For fintech brands, this is the first-ever recession they’re facing. Although traditional banks have been in a similar situation before, the Coronavirus recession is quite different from the Great Recession. Estimates suggest that advertising spend will reduce by 30-60% throughout 2020 and beyond.
During these times, it is crucial to know how consumer behavior has shifted, what impact it has had on the acquisition of new users, and existing users’ activity. How banks and fintech apps are responding to this change, and what strategies should they be implementing right now.
Downloads and active users for Banks and other financial apps seem to be decreasing in Asia from February 2020 till April 2020. However, we see a strong bounce-back starting in May 2020. Here are some quick learnings:
● Millennials and Gen Z are more likely to increase their digital banking use, mostly through mobile apps and websites
● According to The Financial Brand, 35% of consumers adopted online banking (laptop or PC) since the COVID-19 crisis, and 30% of consumers increased their use of mobile banking
What should Banks and Financial Institutions do now?
There are three major steps that banks and financial institutions must take now:
1. Integrate your offline services with personalised contactless experiences
By now, we’ve understood that consumer confidence in visiting offline bank centers has taken backstage. With more users spending time online and interacting with your services in the digital world, it’s even more important to integrate your offline experience with digital ‘contact-less’ versions.
Singapore’s DBS has taken some important steps here, such as:
● Moving 11 financing processes online to reduce the need for offline/manual intervention
● Running webinars to train its staff on how to use digital tools
● Building online services for SMEs to apply for short-term loans to soften the blow of Coronavirus Recession
Problem: How do you personalise and engage your customers online to delight them with your customized offerings?
Solution: Leveraging your customer’s unique behavior and online patterns are necessary to predict and meet their individual needs. For example, to identify which customers are better positioned to ride out the crisis and those who are not and need more active management and outreach. Once you’ve identified such segments, you can engage them to lead to more business value.
While some brands with an online presence already have a head start, those that do not need not be disheartened. Various marketing automation tools can help them set up the right processes. A good starting point is MoEngage’s intelligent cloud platform that can seamlessly integrate with your existing toolkit. If you’re interested, you can request a demo here.
2. Create a seamless digital experience - Can you be the ‘Netflix of Banking’?
The rise of digital leaders such as Amazon and Netflix has primed consumers to expect seamless online interactions in all areas of their life – banking being a core part. Can you create a connected experience wherein a user enquires about your services on his laptop, registers on his mobile, and expects an ATM card to be delivered by post?
Even if your bank doesn’t have an app, you can get started by integrating your Emails and SMS services on one platform. That way, the user receives a standard experience irrespective of the platform(mobile, desktop, call-center, etc.). You can go a step further and personalise the unique experience of every user landing on your website. Sending timely push notifications for credit card payment alerts are not just useful for the end customer but also add the credibility tag to your brand’s image.
According to JD Power, a leading data and insights provider, when the customer’s most important information is displayed right on the overview page, overall satisfaction scores improve by 57 points (on a 1,000-point scale)
Problem: How do I stitch together different digital tools such as Email, SMS, and Push Notifications to one platform to achieve a seamless connected experience?
Solution: Creating a seamless connected experience for your customer starts with having a 360-degree view of your customers on one platform. When tools work in-silos, it becomes quite challenging to manage them.
Customer Engagement tools break the silos and help you integrate each of your different digital engagement tools into one platform. With AI-enabled tools like MoEngage your brand can stay at the top of its game all the time.
From deciding the best time of the day to deliver a timely push notification to predicting your customer needs, MoEngage helps you create unique journeys for each of your customers. A journey that gives them the Netflix of Banking experience and translates to a better business value proposition for your brand.
3. Earn the trust of your customers
It is imperative to build trust for a financial service provider. Trust is the overarching theme that determines a customer's relationship with their banks. The same theme that keeps bringing your customers back and translates to bottom-line revenue.
In the digital age of cybersecurity and data breaches, how do you make sure that your customers trust you the most and keep spreading the right word of mouth?
Take cues from American Express, which has the world’s most successful credit card referral program. With more than 10% of new customers coming in as referrals, here’s how they build trust:
1. Simplify financial terms and jargon. Your customers want to make informed decisions. With online attention spans per website ranging from few seconds to minutes, how can you simplify your offerings for the end-user
2. Exhibit transparency. Customers lose trust with banks that surprise them with hidden charges later. It’s essential to be clear in your communication
3. Make use of your customer’s social capital. People like talking about the products and services that they use consistently.
Conclusion and key takeaways
● Although the downloads and active users for fintech and online banking apps decreased in the first half of 2020, they have shown steady growth since April.
● During a crisis like The Coronavirus Recession, banking and financial institutions need to take three main steps:
○ Integrate your offline services with online contactless experiences. Leverage your customer’s unique behavior and online patterns to predict and meet their individual needs.
○ Create a seamless digital experience that cuts through all digital and offline channels. Intelligent customer engagement tools break the silos and help you integrate each of your different digital engagement tools into one platform.
○ Earn the trust of your customers by simplifying financial terms and jargon, exhibiting transparency, and making use of your customer’s social capital.
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