Banks trying to reassure depositors since the explosion of Covid-19 are pushing out lots of messages, but how effective are they – and what does this say about the industry’s readiness to handle a much more digital world?
Mark Donahue, Hong Kong-based general manager of iSky Research, monitors hundreds of banks and thousands of bank channels worldwide and provides them with insight into customer experience.
He’s witnessed a surge in communications from Asia Pacific to Europe to North America, in the wake of Covid-19’s progress. Although everywhere there are both exceptionally astute banks and some out of touch, he says the trajectory of conversations has been similar.
Bigger not better?
Overall he says the bigger, legacy-bound institutions that rely on branch networks have struggled to engage with depositors during the crisis. Challenger and digital-first banks are doing a much better job. But no institution is the same and there are capable and clumsy banks in all segments and geographies.
With that caveat in mind, he says the response has been consistent, if not necessarily helpful. The first impulse has been to assure customers the bank is open for business – while at the same time to close branches, and sometimes to beg customers not to overwhelm the bank’s call centers.
“Many banks sent conflicting messages,” Donahue said. “On the one hand they were telling people, ‘We’re here to help’, and on the other they were saying ‘please don’t call us.’”
The quality of bank communications also varies. Donahue says clarity is important, citing examples of banks that have been plastering customers with wordy documents lacking obvious key messages. “The attitude is, ‘We expect you to read this entire document,’ but people won’t do it,” he said. “They’re too busy.”
Passes and fails
A few that have done it right: digital bank Tide in the UK, which has been updating its SME customers with clear themes, helpful information about community networks, updates on government programs, and links to articles to help people cope with stress.
Matthew Dooley, a sometimes collaborator with Donahue who is founder of Connected Thinking, a Hong Kong consultancy on bank strategy, said, “Every bank is trying to communicate with me and putting banners on their websites about Covid-19. They’re all doing the same thing, talking about online banking, but they’re giving me a lot of content about the stuff I already know. Banks are talking about their charity donations but they’re not telling me what to do with my portfolio during all this volatility.”
By mid-March, banks had to pivot as governments passed stimulus bills that often intend to get capital into the hands of people and businesses via bank channels.
This has led many banks to scramble to be able to offer loan applications remotely, and has created a lot of stress for those banks with immature digital capabilities: reaching people, verifying identities, authorizing loans, and processing transactions quickly and at scale.
While this struggle continues, banks are grappling with the mundane aspects of serving customers. This requires a self-service capability, so customers can deposit checks or access account statements themselves, without needing to visit a branch. For banks that haven’t properly invested in remote customer engagement, this is a nightmare.
But for those with more robust systems, Covid-19 is an opportunity to support customers. For example, Donahue says Bank of East Asia in Hong Kong quickly opened up customer accounts so people could view seven years of their history online, just in time for filing taxes in Hong Kong.
Donahue calls this “smart self-service implementation. It removes the risk of people visiting the branches, and also helps them file their taxes.”
Sped up or stagnating
He is sympathetic to the legacy players reliant on branches. Not all customers want or can handle online banking. They can’t be reached through emails or social-media posts.
Dooley believes challenger banks are providing a much better experience for users. “Traditional banks’ landing pages are static. Virtual banks are more responsive, showing me what’s relevant to me.” He adds the “creepiness” factor behind banks using customer behavior data is become less scary and more beneficial.
But Covid-19 is not a boon for all fintech trends, Donahue warns. Banks still enjoy a trust factor that they can retain if they get the customer journey right. Moreover, he says the pandemic seems to have put the pre-Covid trend of open banking on pause.
“Aside perhaps from the U.K., open banking is just too nascent,” he said. “We’re not seeing customers looking to have third parties provide services on top of their existing bank account.”