Creating a better digital banking experience

How BeSci can help the Virtual Banking Customer Experience

In the past year, retail banking has seen major changes with branch closures and a necessary push for online banking. The pandemic has sped the trends that have been seen in the last decade. Since 2015, more than one-third of all bank branches have closed in the UK. Adding the global spread of Covid-19, with the additional challenges that in-person interactions have posed, the future of the branch bank is predicted to look very different than it has in the past. 

The future of many retail banking transactions may be carried online instead of in a brick and mortar branch. However, customers may seek an in-person experience. This may result in an overwhelming number of customers calling a customer service line for simple transactions instead of them taking advantage of serving themselves. A challenge for financial institutions is to get more customers as self-sufficient users on their online banking platforms.

How to change customer behaviour to convert more self-sufficient online banking users?

When we are unsure of what to think or feel about something we often rely on our system 1 brains to help us make a choice. This means that understanding the way people think and use biases and heuristics to decipher information can help banks better present information to encourage a desired behavior. 

This knowledge can solve this pressing issue for banks, and ultimately improve the experience for customers and employees. Here are three ways that banks can utilise behavioural science to nudge customers to better take advantage and enjoy online banking.

1) Focus on the benefits....

We care more when benefits display their value and worth clearly. Additionally, in order to get us to register and believe them, we need to see the direct benefits that are very clear and easy to process. For example, a phone with more storage will convince more people to buy it when it's advertised by the number of photos it can store instead of the actual number of gigabytes available. This is called concretisation of benefits, and can be directly applied to the messaging around digital banking.

When online banking is promoting its benefits, it's important these are positioned as concrete advantages instead of a list of features or actions. For example, banks would convince customers to try their banking app if they position the features as something that is salient and tangible to its customers. Something like making customer’s lives easier by not having to wait in a line to deposit a check is more impactful to new customers than the digital deposit feature itself.

2) … and be aware of first impressions...

We tend to seek information that confirms our initial impressions. This has been found in mock investigations with student detectives. In two groups, an experimental group was told that a certain person was already a suspect and then given a list of clues, while another group was not given any suspects and only given the list of clues. The experimental group were more likely to find evidence that pointed to the pre-existing suspect than the other control group. This supports the idea of a confirmation bias, that we are looking to support pre-existing beliefs and that we don’t always weigh all information equally, particularly if it contradicts our beliefs. 

When users are first introduced to their banking app or website, first impressions are paramount. If users start by struggling to login, this can prime them into believing that the app is difficult to use. They will look for additional evidence that supports their belief regardless of their actual experience.

3)… So make the journey simple and easy!

Our system 1 brains like when paths are straightforward and easy to follow. It means that we use minimal cognitive effort to understand the stimulus, which means it has high processing fluency. In fact, research has shown that simpler sentences are judged to be written by more intelligent authors.  

Overall, banks can act upon this by cutting out jargon-riddled sentences and confusing communications. In their digital banking experience, adding easy to navigate FAQ pages could go a long way in helping users avoid dialing a call center and instead understanding how to service themselves.

Conclusion

There are many opportunities to improve the customer experience online banking. The combination of persuasive communication and behavioural architecture can change the end to end user experience which will result in happy and dedicated customers.

To convert more users, it's paramount to concretise the benefits of using online banking services. This messaging can be used to get customers online, but it is important for a strong user experience as they are registering. Users will seek to confirm their pre-held beliefs about online banking and if their first impressions are negative they will be unlikely to become habitual users. Ultimately the entire online banking experience should be crafted with processing fluency top of mind. This will get more users not only taking advantage of the benefits of online banking, but as loyal customers to their banking brand. 

At Cowry, we can help crafting parts or the entire online banking user experience. From getting customers to try out a new app, or using new features, behavioral science can help designs lead to an improved customer experience.

Sources

Alter, A. L., & Oppenheimer, D. M. (2009). Uniting the tribes of fluency to form a metacognitive nation. Personality and social psychology review, 13(3), 219-235.

Asif, Chandana, et al. “Reshaping Retail Banking for the next Normal.” McKinsey & Company, McKinsey & Company, 15 June 2020, www.mckinsey.com/industries/financial-services/our-insights/reshaping-retail-banking-for-the-next-normal. 

Brignall, Miles. “More than a Third of UK Bank Branches Have Closed since 2015.” The Guardian, Guardian News and Media, 23 Sept. 2019, www.theguardian.com/money/2019/sep/24/more-than-a-third-of-uk-bank-branches-have-closed-since-2015. 

Iyengar, S.S., & Kamenica, E. (2010). Choice proliferation, simplicity seeking, and asset allocation. Journal of Public Economics, 94 (7-8), 530-539. 

Kahneman, Daniel. "Thinking, fast and slow." (2017).

Nickerson, Raymond S. (June 1998). "Confirmation Bias: A Ubiquitous Phenomenon in Many Guises". Review of General Psychology. 2 (2): 175–22