Banks must reimagine their digital services to protect the “emotional connections” they have with their customers, or else they might lose relevance in the increasingly competitive financial services market, a study by Accenture has found.
Thanks to chatbots and digital payment tools, banks operated normally during the COVID-19 pandemic. But the social distancing norms kept customers at bay, making it extremely difficult for the financial institutions to retain the emotional bond they developed with their clients.
Whether one likes or dislikes it, digitalization has removed the vital human element from banking, one of the major reasons for banks to lose consumer trust.
In-person branch interactions help bankers keep up the trust of their customers, but the digital payment services are threatening to destroy this trust, says the IT consultant, claiming that its suggestion is based on the opinion of 47,000 consumers it surveyed recently.
“Without a strong emotional connection with their bank, customers are more likely to view banking services as a commodity, with the price being the ultimate competitive differentiator,” the report has warned, adding trust in major financial institutions had already decreased to 29% from 43% two years ago.
“To forge strong customer connections, banks must reimagine the digital services they provide and make those connections more personal and relevant,” says Alan McIntyre, who leads Accenture’s Banking industry group globally.
“The pandemic-inspired increase in digital engagement is a double-edged sword for banks. While it has allowed them to serve customers efficiently throughout the pandemic…, it has pushed them to launch solutions that are functionally adequate but devoid of emotion.”
If banking services become a commodity, traditional banks will be the major losers. They are already struggling to keep pace with more agile fintech startups. Moreover, today even Google has started offering digital payment services.