(Business Insider) -- There is a lot of talk in the financial industry these days about digital. And for good reason.
The digital race is on, and institutions that do it early and best have a shot at winning the race and reaping the rewards in terms of growth.
But let's be clear: as cool and exciting as digital technology is, it's fundamentally an enabler.
The key thing it's enabling is a transformed experience in the way consumers manage their money and how banks can support them in that journey.
For clues on how to do this right, we need look no further than digital-centric companies like Amazon and Uber. What these companies and others like them have done is reset and raise consumer expectations around how they interact with and receive services. Banks, credit unions, and other financial institutions are being held to the same high standards for delivering a seamless, intuitive experience.
So what is it, at the core, that businesses like Amazon and Uber are doing to create successful customer experience models? Here are the common denominators that the financial industry should pay close attention to:
1. Be customer experience obsessed.
If I were only going to share one lesson, it would be this. Jeff Bezos built Amazon into the company that it is today by being what he has called "obsessed" with customer experience and making every interaction fast, easy and personalized. Uber rose to its current position by creating a customer (and driver experience) that was unparalleled in ease in the market.
Younger generations have come to expect this: a study found that 68% of millennials have stopped doing business with a brand due to a single poor customer experience.
Financial institutions cannot afford that slim margin for error and need to adopt a customer experience obsessed mindset: one that caters to customer experience instead of catering to the bank's own schedules or existing operations.
Whether it be a new online retail bank experience like Citizen's Access and Goldman Sachs' Marcus"or something more experiential like Capital One Café, large banks are coming around to this customer-centric paradigm shift - and financial institutions of all sizes should follow suit.
2. Make digital invisible.
As the US' biggest online retailer, accounting for 4% of all retail and 44% of all e-commerce, Amazon has become the gold standard for online shopping by making the digital experience so seamless that it might as well be invisible. Consumers don't even have to take their card out (or at times even go online to shop if they've set something like diapers or paper towels to auto-refill). Uber has mastered the same model, making the digital experience so seamless that a user's credit card never has to exit their wallet when they take a ride.
Banks and credit unions need to enable a similarly invisible digital experience for their customers by minimizing the effort required for consumers to do common tasks like making a payment, transferring money, or even applying for a small loan.
Digital and analog should also be seamlessly connected: imagine you start a credit card application online but later stop by your local branch and have to start the process over from scratch. Financial institutions that win at customer experience will be able to connect those digital dots for you.
3. Worry about what will change, but focus on what won't.
With the pace of technological change faster than ever before, consumers are adopting new technologies at a faster clip. This makes it hard - really hard - to figure out what to focus on when delivering in the future.
It's best to focus on Jeff Bezos' advice and instead of worrying about what will change, focus on what won't change in the next 10 years.Financial institutions should think about building better consumer experiences through that same lens.
In 10 years, people will still need mortgages, small business loans, checking accounts, to be able to see their balance or transfer money. Banks and credit unions need to keep those types of activities top of mind while working to implement how they will need to make those interactions easier.
4. Make data a driving force.
Amazon has built one of the largest and most valuable data sets in the world that speaks to consumer behavior, seller behavior and more. The company is getting continually smarter by pouring that data back into the business to continue to drive efficiencies and margins. For example, Amazon can use the data to look at historical information on the consumer, but then apply artificial intelligence and machine learning to be predictive and help drive engagement for future activities with more insight.
Financial institutions have a data heavy relationship with consumers too, one that is deeply rooted in trust but that can ultimately be leveraged to help the consumer be more spend and investment savvy. Since people's finances are personal and private, financial institutions have to be mindful about how they use data, but would be remiss to ignore it.
