Next-Gen Customer Experience in Digital Banking: 10 Must-Have Features

In less than a year, the lives of people around the world changed from “digital second” to “digital first.” Physical limitations led to a surge in online activity and the mass adoption of digital banking services. Secure, fast, and convenient online access to finances became a banking function for which consumers switched banks.

Mastercard’s study found that 62% of respondents in Europe expressed interest in switching from physical banking to digital platforms. More than half of the global population uses more banking apps than before the pandemic and expresses a more positive interest in digital banking overall.

When customers are looking for alternatives to traditional banking, the first impression they get from the customer experience plays a big role in their decision-making. It doesn’t matter how good a bank’s in-branch customer service is or how attractive the fees are if a prospect can’t open an account due to a complicated and lengthy application process. Currently, 9 out of 10 customers cancel their applications for checking accounts, credit cards, and loans.

Digital banking research. Source: Temenos

Digital banking customer onboarding: keep it short and be there for them

By motivating customers to complete their applications through a better user experience, banks can increase revenue streams and improve the bottom line. According to a report by Capgemini, customer acquisition in digital banking through meaningful user journeys was a fast-growing priority even before the pandemic, as customers want the same convenience in banking as they do in digital lifestyle applications.

Key challenges of the current client onboarding process. Source: Capgemini

When designing the onboarding process from the user’s perspective, it is important not to overload the customer with unnecessary information. Streamlined onboarding lays the foundation for a trusting customer-bank relationship.

Mobile-first experiences are designed around touchscreen inputs with a minimum of on-screen information to minimize distractions and increase the chances of a successful conversion. Saving time and hassle by pre-filling as much data as possible from internal systems and never asking for the same information twice goes a long way toward nurturing customer relationships.

Taking care of customers’ time when developing a next-generation online banking solution can help avoid the three most common sources of leakage in the digital sales cycle:

• too difficult to switch
• too cumbersome digital registration process
• lack of advice when the customer needs it.

Aligning the ongoing customer journey with next-generation features helps solidify customer loyalty. Banks must therefore use data and behavioral analytics to continuously improve and iterate the customer acquisition process. By identifying friction points where activities stall and errors occur, organizations can make incremental changes to improve the process over time.

Top digital banking features to ensure unparalleled customer experience 

1. Convenient account opening in minutes

Digital self-onboarding allows customers to open a bank account no matter where they are or what device they are using. Simplifying access to banking services and shortening the account opening process to just a few minutes makes life easier for customers and removes barriers to switching.

Next-generation onboarding consists of gathering and verifying basic information about a customer, reviewing documents provided, and performing due diligence to ensure legal and regulatory compliance. This process can be completed in about five steps in less than 5 minutes using remote review services from ID and Optical Character Recognition (OCR) to automate document review and validation.

According to OneSpan.com, facilitating digital account opening is already a top priority for banks and financial institutions. 68% of respondents are actively using this in their onboarding processes. Self-onboarding not only significantly improves the customer experience, but also streamlines data collection and processing, allowing banks to deploy their resources elsewhere.

2. Account-to-account (A2A) payments

P2P, or peer-to-peer payments, are a simple but effective solution that enables near-instantaneous money transfers between any device. With just a few taps, customers can pay and send money to friends and family from their phone or computer. Mobile-first customers have little patience for multi-day bank transfers that do not work on weekends when better and faster alternatives work 24/7/365.

Banks that offer the convenience and simplicity of instant payments can keep their customers in their ecosystem instead of losing them to payment services like Venmo. With the account-to-account (A2A) payment capabilities of digital banking, customers can effortlessly transfer money between their accounts, making financial transactions more convenient than ever.

3. Intuitive loan applications 

With an automated digital application process, customers can effortlessly open additional accounts, obtain credit cards and apply for loans. The ability to apply for any banking service with just a few clicks can improve conversion rates for existing and new financial products. Lending is a core banking service that can benefit greatly from a next-generation digital strategy.

By integrating the loan application process into a core banking system, customers do not have to re-enter their data that is already in the system. Customers can save their applications and reopen them later, while banks can monitor these leads and follow up with assistance and personalized offers.

4. Scheduled payments

Monthly and annual invoices are recurring payments that take time. Automating and deploying invoice management tools brings a new level of convenience to both individuals and customers. By linking billers directly to bank accounts or cards, banks can give customers the ability to centralize and control spending through manual or scheduled bill payments. Quick access to all subscriptions with a real-time overview prevents unexpected costs and gives customers peace of mind.

As with scheduled payments, account holders can also send money from a single account to multiple recipients with bulk transfers. Business transactions, salaries, and other frequent payments can be streamlined to provide customers with a quick, easy, and efficient way to make bulk payments. Scheduled payments are therefore one of the most important features of digital banking, allowing customers to automate recurring payments such as bills and subscriptions, ensuring timely payments without manual intervention.

5. Personal digital card management

Digital card management allows banks to give customers more control over their finances. Setting up online spending limits and blocking payment cards with just a few taps offers greater convenience and a better sense of security. With digital card management, customers can customize their settings to match their purchasing behavior by turning contactless NFC and online payments on or off.

Detailed transaction history by country, merchant type, and location helps prevent irregularities and detect fraudulent transactions early. Therefore, personal digital card management features are the standout features of digital banking, allowing customers to digitally control and manage their debit or credit cards.

6. Trustworthy security

Digital banking services collect and store sensitive customer data that must be protected and kept secure with innovative technologies. To deliver a next-generation customer experience, banks, and financial institutions must meet stringent regulatory data requirements and implement industry best practices.

Multi-factor biometric authentication, location-based security, suspicious activity notifications, card tokenization, and predictive fraud detection systems are a must for modern banking. The advanced security features of digital banking, such as biometric authentication and multi-factor authentication, therefore ensure secure banking and protect customers’ sensitive data.

7. Timely notifications

With in-app alerts and notifications, customers can monitor their financial activity and protect themselves from fraudulent withdrawals and transactions. Real-time notifications of incoming and outgoing payments, low balance alerts, overdraft protection, and payment providers allow customers to stay on top of their finances. Each app alert is also an opportunity for banks to offer better products and services to their customers. Digital banking features, such as real-time transaction alerts and notifications, keep customers informed about their account activity and provide an additional layer of security.

8. Personal Finance Management (PFM)

Banks can play an active role in helping consumers improve their financial behavior and make healthier money decisions. PFM tools and features enable customers to plan their finances with spending and savings goals. By monitoring weekly and monthly progress with clear visual charts, customers can choose to allocate more of their income to savings or retirement accounts. Banks that help their customers make better decisions can build more trust and foster loyalty among their customers.

9. Valuable loyalty benefits

Customers feel valued when they are rewarded for their choices, such as membership in an exclusive banking community. Reward vouchers, customized cards, special offers, cashback, and referral rewards are just some of the strategies digital banking platforms rely on to reward customers for their brand loyalty. Satisfied customers become the best brand ambassadors.

10. Straightforward digital insurance

Partnerships and integrations between insurance companies and banks, known as bancassurance, help financial institutions expand their service offerings within their ecosystem. Personalized digital insurance packages that come with an account improve customer satisfaction while generating new revenue streams for banks. Insurance-linked to a bank account simplifies claims processing and significantly speeds up reimbursement time.

SDK.finance: the proven digital banking software vendor 

SDK.finance, a white-label digital banking platform provider, has everything banks and financial institutions need to create a next-generation customer experience in the shortest time possible. The digital retail banking platform built by a team with 15+ years of experience in FinTech is available to build a neobank fully equipped to reach the new generation of mobile-first customers. 

Contact the SDK.finance team directly to learn more about what type of banking software will be perfect for your business needs.