Every once in a while, we may have found ourselves caught up in the hassles of various banking processes. Is it not extremely disenchanting to have to make trips to the bank to get a misspelled detail corrected? Be it credit card troubles or technical glitches, customers can be easily disgruntled. Reports from 2019 revealed that non-adherence to fair practices code, ATM/Debit cards, and Mobile/Electronic banking are amongst the top categories under which complaints were received.
It appears that customers have begun to greatly value a hassle-free experience and are willing to actively seek better options or solutions. In such a scenario, both conventional banks and neobanks can benefit a great deal from improving their customer experience.
From the bank’s perspective, it is imperative to build a relationship with the customers that fosters trust in the banking system. Such a mechanism would entail a smooth working system, a focus on improved communication, and a prompt system to handle complaints. Good customer experience in banking helps the bank to build brand value. Needless to say, satisfied customers are likely to have better reviews for the bank. And more recommendations mean better outcomes for the bank.
For the customer, a smooth experience means having faith in the banking system. A customer is likely to use more financial services from the bank if there exists mutual trust, forming the cornerstone of a lasting relationship.
Where do Neobanks stand?
The fintech sector continues to grow on a variety of metrics – market penetration, investor sentiment, innovation potential, and more. Today, it is impossible to separate a digital customer experience in banking from a traditional one. Are you a business looking for smoother financial operations? Or perhaps just an individual who’d be thrilled to have a seamless digital experience? Neobanks could just be the solution for many. And while neobanks in many emerging markets are not 100% digital, many still provide a range of services from banking, loans and cryptocurrencies to foreign exchange services.
The neobanking sphere has the potential of offering a banking customer experience that could be a notch higher than what conventional banking has provided. A reason for this is that they occupy the fintech space and it can be feasible for them to devote most of their resources to improve their services. Another point to note here is that as the prefix ‘neo’ indicates, these banks are well, new. So, of course, they have had to put a more attractive package on the table to be able to win customers.
In a 2018 report on Banking Customer Experience by Qualtrics, 60 percent of the respondents said that they would prefer an online-only bank or credit union. It seems then, that the public mood is just right for neobanks to look for a breakthrough. Neobanks are the ones that often lead the way in fintech trends, and could potentially be setting the standards for the digital experiences that conventional banks offer.
The Bigger Picture
If we look at the larger scheme of things, quality banking services and consequently, good experiences by the customers, can have an immensely positive impact. Perhaps the most important outcome of this can be greater financial inclusion as more and more people would want to come into the fold of the formal banking system. As a result, this would also help in the better transmission of monetary policy rates to the customers.
Not only does this generate loyalty and affinity to the bank brand, but it also adds to the larger goals of banks as financial institutions. It becomes obvious that valuing customers can have a far-reaching impact on many levels. Putting people at the center is often always for the best, and is in the spirit of financial inclusion.