Portions of this article were originally posted on Forbes.com:
The FIS released its consumer banking PACE index. Following the inaugural report, the second edition aims to greater understand how financial institutions are Performing Against Customer Expectations (PACE) in 2016.
The New Battleground Of Experience
According a study by Gartner, 89% of companies will compete mainly on the customer experience they provide . The battle lines have been formed. There is no such thing as merely expectations. It is a myth. You either exceed the expectations of your customers or you fall short.
Keeping PACE (Performing Against Customer Expectations)
The PACE Index measures 18 attributes associated with expectations in banking. The Global Study asked over 10,000 customers to rank each attribute based on both importance and performance. The report uncovers the things customer value most and where the biggest performance gaps occur.
1. Back To Basics: Basic foundational aspects of banking are still the most important to customers. The top three from the index were 1. safety, 2. security and 3. fairness. Safety is defined as trusting the bank to keep money safe and security is about the ability to protect personal identity. For both, there was slight variance between importance and performance. Banks are performing well in these “table stakes” attributes. Fairness is where the biggest challenge lies. Over 20 percentage points create a huge gap in performance. Customers equate fairness to when there are no hidden charges and fees.
Takeaway: Banks need to go the extra mile to be more transparent, fair and up front about fees.
2. Life Events: Nearly six out of 10 surveyed anticipate a life event happening in the next 36 months. That number jumps to nine out of 10 for millennials. These life events such as student loans, buying a home, or getting a car loan. These are significant opportunities for the primary banking institution of the customer. Will these banks be ready with the right products and will they have the ability to reach them at the time of need?
Takeaway: Banks will need to think about leveraging cognitive analytics. Specifically how they gather insights from current customers behavior in order to predict the right product and the right time in their lives. According to Anthony Jabbour, COO of Banking & Payments at FIS, the financial technology provider is doing this through a service they provide to banks called Pinpoint Marketing.
3. Build It And The Rest Will Come: Millennials make nearly twice the percentage of mobile transactions than GenX or Baby Boomers.
Takeaway: Even though millennials will not account for 50% of the banking market until 2026, they are still important now as they are the pioneers on mobile technology. Invest in technology for millennials and you’ll be building a capability that will ultimately benefit the rest of your customers.
4. Easy Does It: Consumers want products that are easy to understand and use. Simplicity advanced from 7th to 6th rank out of 18 attributes.
Takeaway: Banks should be leveraging design thinking to focus on usability and user experience. Keep it simple and focus on making it seamless and fast. To quote Antoine de Saint-Exupery, “Perfection is achieved, not when there is nothing more to add, but when there is nothing left to take away.”
Today’s Lagniappe (a little something extra thrown in for good measure): Here is an example of keeping things simple for customers. What if there was a way to access money from an ATM without your card? Enter Cardless Cash, an FIS service that’s available in 29 cities across the U.S. Here is a video that showcases the service from Wintrust Financial: