Mobile Banking: “Results-Based Approach” | PYMNTS.com
The great digital shift has brought us all to our mobile devices. But as we become more and more connected with financial services companies through phones, tablets and laptops, banking services have fallen behind. As the PYMNTS study showed, around 45% of account holders use online and mobile channels for banking transactions most or all of the time.
But a third of users surveyed expressed dissatisfaction with their mobile banking apps. These statistics indicate room for improvement.
Loan Club CEO Scott Sanborn told Karen Webster that financial services can be boosted by adopting an outcomes-based banking approach that leverages the device as a way to improve the financial health of consumers rather than focusing on separate banking services . “The most important thing they need to do is move to the organizational level of a ‘customer first’ mindset fueled by a single customer view,” he told Webster.
Achieving that requires tackling legacy technologies (read: technical debt), going beyond the branch experience, and leveraging data to create a personalized experience.
As Sanborn has said in previous corporate earnings calls, banking is no longer defined by a place where people go, but is about what they do. “Banks spend a lot of money on advertising, but at the end of the day experience is a huge driver of choice – and a big driver of choice has often been convenience,” he noted.
The pandemic has changed what it means to have a “hands-on” banking experience. In the past, convenience was about the branch and having a branch close to home. Now it’s all about the interplay of mobile banking which increasingly should “deliver the customer-centric outcome” that the individual expected from the bank in the first place, according to Sanborn.
He called this results-based ‘know-me’ approach that spans, end-to-end, a banking application, where financial service providers can anticipate the immediate needs of consumers, as well as what they might expect. ultimately need. After all, said Sanborn, the online banking experience is important to everyone, but what counts about that experience can be very different depending on the day or use case.
This results-based approach has not yet crystallized in financial services, which is why so many people have different relationships with a large number of suppliers, taking a little of what they need from each of them. . They can use one bank for checking and savings, another for a mortgage, and yet another for a car loan, for example.
Technical debt is a challenge in shaping the connected ecosystem, said Sanborn, where a financial institution (FI) could serve as a single point of contact. Banks have grown through acquisitions and have had to adopt several legacy technology systems. “Silos form around products as opposed to customers – and so it’s harder to stay focused on them,” he said, with a holistic view.
In contrast, explained Sanborn, digital-native companies like LendingClub have been able to organize their efforts with the customer in mind, and always at the center of design. This contributed in part to the collection of 140 billion cells of data over 14 years.
LendingClub’s customer base could be defined as “highly banked,” he said, but they are not getting the most they could get from their financial products and services. He pointed out that the company’s business model aims to help consumers better control their debt – and improve their credit scores in the process.
A hybrid approach – for now
The fact that LendingClub has a number of avenues for interacting with customers – by phone and chat, Sanborn said – speaks to a hybrid approach that remains essential. In some cases, customers are not yet ready to go 100% digital (indeed, some loans, such as car loans, still need to be made with physical paper, even if they do not need to be completed. ‘a “wet signature” made in a branch).
“Is it possible to be completely digital? Is this desirable for all clients? Not yet. But it definitely goes in that direction, “Sanborn said. While there are still use cases that require person-to-person contact, he said, online financial services markets like LendingClub have evolved into connected economy ecosystems.
“The market has allowed us to assemble a ‘finance ecosystem’, with everything from regional and community banks that will provide capital for lending to high credit quality consumers, asset managers and hedge funds that are willing to take more risk in return. for higher throughput, so that we can serve a wide range of customers “fueled by the data that underpins every interaction,” he said.
Beyond lending business, Sanborn said, the data enables LendingClub to help consumers spend and save. The customer who comes to LendingClub to pay off their credit card debt may also be incentivized to save money on a car loan, automatically placing those savings in a separate account that grows over time and improves their financial health. .
The holistic approach can also help LendingClub reach Gen Z consumers, for example, who until now have relied on Zelle and Venmo as their sole online banking channels. “As they progress through their financial lives, they will need more from their bank,” he told Webster. “They’re going to need help and support with a variety of other services… You need to both align around the customer and create incentives for the business that match the customer’s results, not just the results. company financials. “