New MoneyLIVE Report Cautions FIs on Overloading Consumers with Communication Channel Choices
By W.B. King
Sometimes too many options can disrupt otherwise well-intended communication practices. This is among takeaways from MoneyLIVE’s recent report, From channels to context: a new era of banking personalization.
“Over the past decade, retail banks have invested heavily in developing more advanced and feature-rich digital channels as they seek to keep pace with a host of digital-native challengers,” the report offered. “Many have built powerful interaction points: mobile applications; online portals; automated messaging; chatbots and more. But much more needs to be done to modernize the way banks actually communicate with their customers.”
The report, researched and written by MoneyLIVE in partnership with Quadient, made the case, in part, with four examples:
Better and more feature-rich banking apps are not where the battle for consumers will be won. “The belief that competitive advantage is won by deploying more digital channels is yielding diminishing returns for banks. Consumer loyalty is no longer being determined by shiny apps loaded with features, but by the intelligence of the interaction and communication that banks have with those consumers.”
Bank communication is undergoing a shift from reactive to proactive. “Traditional banking communication is typically retrospective and compliance-led: a log of past transactions or defensive risk alerts and notifications. To drive greater customer engagement, banks need to shift towards more proactive communication, using real-time data to actively protect, guide, and improve a customer’s financial interaction either as it’s happening, or before it’s even requested.”
AI can be a major enabler, but it requires a solid technological foundation and joined-up data to really shine. “Generative AI is promising a major technological shift that could enable a more conversational approach to banking communication. Client-facing AI deployment is expected to increase nearly sixfold over the next two to three years. But properly implementing AI will involve overcoming barriers that span people, processes, technology and data. One key issue is that banks typically communicate through fragmented product silos (e.g., mortgages, loans, current accounts, and so on), each of which are often based on separate technology stacks, and with disparate data sources and taxonomies.”
Banks have a battle ahead to provide a more conversational approach to communication that they own and control, rather than third-party large language models. “As consumers rapidly embrace the use of AI, many are defaulting to ChatGPT or Claude as a key source for financial insights. To counter this, banks will need to create richer conversational communication options that tap into the wide-ranging and proprietary insights that they hold about their customers, providing guidance and advice and in turn creating closer relationships. Getting this right will naturally increase customer engagement and ultimately drive greater customer value.”
Avoiding Feature Overloads
Speaking to the first bullet point above about feature overload, one of the report authors, Peter Ramsey, founder of user experience (UX) consultancy Built for Mars, said: “When you add more features in, cognitively it’s more difficult to understand how to use [the apps]…From a user experience perspective, it just always becomes a mess when you add loads and loads.”
Fellow report author, Jayne Opperman, CEO of Customer Lending at Lloyds Banking Group, doesn’t think most consumers necessarily seek multi-channel banking journeys. “Increasingly, most of our customers come through the mobile banking channel...Sometimes customers call us because the thing that they wanted to do on the mobile hasn’t worked. It’s not because they want to span across channels.”
The above comments notwithstanding, report author Søren Rode Jain Andreasen, Head of Daily Banking and Channels at Nordea, said that when regulation, pricing, cost-efficiency, and UI design all converge, basic banking services become table stakes. “The true competitive moat becomes relevance: how deeply you know the customer, how accurately you anticipate their needs, and how seamlessly you deliver the right solution at the exact right moment.”
