Before Citizens Financial Group launched its digital-only banking unit, Citizens Access, last July, a team of bankers spent months intensely analyzing how customers might interact with a digital bank with no physical presence versus a traditional bank with a large network of branches.

While some fledgling products from competitors helped demonstrate potential challenges and opportunities of setting up a digital bank, Citizens Access President John Rosenfeld said the bank also did a “ton” of research around customers’ most fundamental wants and needs.

“We knew rate was going to be a key consideration,” he told Bank Innovation. “But we wanted to know what the other big considerations were, and they turned out to be customer experience and security.”

More research was done just on naming conventions. The bank ultimately decided to link the new offering back to Citizens Bank and build on existing trust in the brand.

The bank did even more research on the actual design of the interface, going so far as conducting usability testing with prospects, or who would be live customers, at Bentley University in Boston, in the school’s usability lab.

“We showed them prototypes and watched to see where they might hesitate on a given task and then figure out why they hesitated and what was causing them to have to think,” Rosenfeld said. “One of our mantras was, we don’t want customers to have to think.”

The bank doesn’t want Access customers to think because they found that’s exactly what its target customers, “optimizers,” desire from a digital-only offering. Rosenfeld said optimizers largely want a place where they can store their money safely, get a competitive rate, and not have to think too much about it.

The marketing side of things is, therefore, pretty simple.

“Optimizers all go to the same places,” he said. “It’s like people that go to those car shows. If you have an antique car, you’re going to go to the car shows and you’re going to meet everyone else who has an antique car, right? Optimizers gravitate to things like Bankrate, NerdWallet, or they use Google.”

Naturally, that’s where the digital bank’s advertising dollars have gone.

“I’d say 95% of our marketing is through the digital channel, but we’ve explored things like Pandora and we’re exploring the potential to do direct email and things like that,” Rosenfeld said.

Retention and building loyalty, in the meantime, is all about customer experience.

“If they have a simple experience, then that’s going to change the game,” he said. “Once you have a good experience, you’re far more apt to stay or come back to that bank than you are once you’ve had a bad experience or even just a less-than-stellar experience.”

Another factor is what Rosenfeld calls the “margin of indifference.”

“You don’t have to have the best rate in the marketplace,” he said. “If you’re within 25 to 30 basis points of that best rate and you provide a better experience, you’re probably going to win in the comparison.”

Also see: Citizens Access Targeting ‘Optimizers’ to Grow Deposits Beyond the Bank’s Footprint

Ben Johnson, VP of Mobile Strategy for Chicago-based customer experience agency Rightpoint, told Bank Innovation he’s seeing a movement away from brick and mortar operations to online, app and text-based customer service, and not everyone in banking and finance is prepared for this.

Johnson said more in-person services like mortgages, notaries and certified checks will eventually move to apps and be facilitated through video conferencing. He also predicted that a majority of the wealth managed by financial institutions will soon be with clients who will only communicate via mobile apps, text or voice.

But as more products and services move from the branches to the digital realm, how will that change how banks interact with their customers and keep them coming back?

Johnson said banks will have to keep learning about their customers’ habits and modifying their experience accordingly. He said strategies for marketing and building brand loyalty for digital and non-digital products are actually quite similar, although with caveats.

“Marketers today have tools at their disposal that allow for intense personalization and targeting that can be applied to any type of product,” Johnson said. “However, the most successful apps solve problems in a user-friendly way. Developers should focus on building an engaging experience that is intuitive and easy to use.”

Mike Sha, co-founder and CEO of robo-advisor software firm SigFig, told Bank Innovation that banks are increasingly interested in leveraging data and technology to improve the front-end experience.

“A lot of that stems from growing expectations of digitally-savvy customers,” he said. “Most people just want something that works for them and will make their lives easier, while still delivering really high-quality results.”

Sha said the bottom line is that well-designed, effective digital products that solve real problems make customers happy.

“The challenge is getting it into their hands so that they can experience the benefits for themselves,” he said. “This is a big part of why we’ve partnered with banks. That’s where consumers already have established relationships and a level of trust and loyalty. By providing the right tools that help customers achieve their individual goals, banks can create even deeper relationships with consumers, which leads to increased retention.”

Join us at Bank Innovation Ignite 2019, March 11-12 at the Hyatt Olive 8 in Seattle. Register here.