Why financial institutions have to start emulating Amazon and Apple
In the digital era, hours of up-close-and-personal quality time might feel odd. After all, many of us now live at least some of our lives remotely. Think about it: whether you’re working from a coffee shop — or your couch or even shopping for electronics, face-to-face interaction is just not the necessity it used to be.
What’s more, some customers are starting to see face-to-face interaction as a nuisance. They want less face time and more digitized, simplified and seamless services.
That’s not to say customers and clients want to cut off ties completely; they need personalized services from banks, insurance companies, accounting firms and credit unions. But we’re in an era when consumers can do all their shopping on Amazon, without ever setting foot in a crowded shopping mall. They are now demanding the same level of service from their financial institutions.
A new Bain study has found that an increasing number of consumers around the world are doing business with fintechs and technology companies who have invested heavily in digital channels and processes. This “leakage” away from legacy, largely brick-and-mortar banks, has been obscured to some extent because customers typically still keep a traditional checking account.
By 2020, U.S. banks will have 20% fewer branches. The culprit? Online banking, the decline in the use of cash and shifting consumer preferences. In North America and elsewhere, many banks have also introduced new-format branches with smaller physical footprints and fewer staff.
The building wave of demand for digital, easy and personalized financial services is getting more difficult to ignore. And it’s not just the digital natives of the millennial and Gen-Z generations who are at risk of walking away. Baby Boomers too want to leverage technology to get their affairs in order and to get the help they need in an efficient, paperless manner. Accenture found that only 16% of Boomers are accessing banking services through a branch at least weekly — even less than Gen-Z, at 23%.
If financial institutions can’t provide quick, easy services the way Amazon and Apple do, they’ll lose customers in favor of companies that can. Some financial advisers may fear that meeting modern-day demands might seem impossible amid the regulatory and compliance headaches that can often accompany tasks like estate planning or mortgage applications. Through Liveoak’s leading cloud-based platform, we’re helping forward-thinking, global financial institutions collaborate with customers, partners and stakeholders to get work done without meeting face-to-face. This includes successfully completing and signing all manner of account paperwork, executing multi-step agreements, verifying customer’s identity and gathering all the necessary documentation needed to close business. All of it is wrapped in a Complete Audit™ system that tracks every keystroke, digital asset and customer interaction.
Platforms like the one we’re building will help financial institutions give their clients and customers the digital services they’re increasingly demanding. Leading financial institutions know they must innovate with digital experiences that make their customer’s journey location-agnostic, streamlined and efficient, all while adhering to regulations and compliance requirements.