One term that comes up again and again in the banking sector at the moment is ‘frictionless’. Whether it’s streamlining onboarding processes or making an in-store mobile payment as fast and easy as possible, frictionless banking has become a key buzzword as financial institutions look to improve their customer experience and encourage users to interact more frequently with their services.
Decreasing friction a top priority
Indeed, this was found to be a top priority for banks in the year ahead in a recent study by The Financial Brand. The company’s 2018 Retail Banking Trends and Predictions report revealed that 61 percent of respondents from within the global banking sector named “removing friction from the customer journey” as a key trend for the year ahead.
This made it the number one priority, ahead of the use of big data and AI (57 percent) and improving “integrated multichannel delivery” (42 percent).
The report noted: “Financial institutions need to re-imagine their core journeys from front to back by addressing key customer pain points and identifying new opportunities to delight customers in differentiated ways.”
But what does removing friction mean in practice? For many, it may simply be synonymous with customer experience, but in practice, it’s much more than that. Often, it’s not just about making sure that users can interact with their bank via the channel of their choice, but that they’ll be able to do so in an intuitive, easy and consistent way.
Identifying where friction can occur
One common friction point can occur when a consumer is looking to switch channels in the middle of an interaction with their branch. If, say, an individual has initiated a query on a live chat function, but decides it would be better resolved by phone, they should be able to switch seamlessly from one to the other and pick up precisely where they left off.
Yet in reality, this does not happen because different channels are not effectively connected, which means users must start from scratch, repeating key information and explaining the situation again. This is a common problem that increases the time taken to resolve an issue and results in much frustration for the end user.
Having to go through multiple steps to complete a transaction also adds often unnecessary friction. For instance, when it comes to mobile payments, being able to simply tap a phone to a contactless reader is much simpler for consumers than having to manually open an app and read a QR code. Of course, this may not always be down to the bank, but it illustrates how extra steps can easily get in the way of a smooth experience.
How banks can streamline the experience
The Financial Brand’s report highlighted several areas that banks should be focusing on to deliver a better, more frictionless customer experience. For instance, it recommended that banks should look to overhaul their account opening and onboarding processes to ensure that customers can sign up for services without having to visit a branch.
This is one area where banks may be falling behind. Many customers may wonder, for example, why they have to visit a physical location to present their ID when today’s tech makes it easy to snap a picture of a passport or drivers license and send it digitally.
Elsewhere, banks also need to look closely at their mobile and online offerings this year to identify any redundancies and repeated steps that add friction, and work to remove these. Of course, banks will always find it a challenge to balance convenience with factors such as security – but if as much of this as possible can be done in the background, without interrupting the user’s experience, it will greatly help make banking as frictionless as possible.