By Eric Disend, Partner

The situation facing a Capco client specializing in small-business banking demonstrates the importance of customer experience, the shortcomings of many traditional bank offerings and the disruptive impact of new market entrants.

Signing up for a digital service on the bank’s website required customers to spend nearly 20 minutes just to find the page detailing service offerings. Then, after filling out online forms, customers received a message that a bank representative would get back to them within 48 hours to complete the application.

Contrast that experience with the ease of using Square Register, a device offered by Square, Inc., that allows merchants to accept card payments through Apple iPhones and iPads. The enablement process only takes a few minutes, and Square overnight ships the device, allowing a merchant to be in business the next day.

Wanted: a consistent consumer experience
Consumers can take care of their banking requirements using an array of digital devices and service offerings, but the experience is often anything but consistent. Whether establishing a new account, paying bills online or filling out a loan application, bank customers encounter different interfaces, different instructions and possibly different data from one device to another.

This deficiency is not surprising given the segmented nature of bank technology today. Mobile and online are often treated as two separate channels within the bank infrastructure, each provided by a different vendor. In this piecemeal environment, customers encounter quite different experiences — and uniting the IT resources, processes and people of each is extremely difficult.

Banks also run the risk of chasing the latest shiny object. They may become so focused on the growing mobile channel that they neglect the Web-based online channel, which remains a primary conduit for both transactions and information gathering. Even if banks are diligent in maintaining their Web-based presence and services, the “disconnect” between Web and mobile impedes delivery of a consistent customer experience across the two channels, as well as between digital channels and physical branches.

From a customer viewpoint, overcoming these barriers is essential. Customers want the same capabilities, look and feel regardless of what type of access device they use. And they want an integrated experience in which they can start something on one device, continue it on another and perhaps complete it in a branch.

Dramatic changes abound
As banks work to deliver a loyalty-winning customer experience, they also contend with dramatic changes in transaction fee structures. Eased regulation is paving the way for increased use of price differentials between transaction channels. Transaction costs may vary, perhaps dynamically, depending on whether a customer uses a deposit account, credit card or loyalty points.

Retailers are also beginning to price products differently across payment channels. Channels with an associated fee are likely to face added pressure as customers demand more flexibility and lower costs, especially as digital wallets enable payment at point of purchase based on the best immediately available deal.

How would you rate your bank’s digital service? Have you found any financial institutions providing a seamless digital service for customers?

Coming in Part 3 of our Digital Banking series: How banks can stay competitive today and tomorrow.

Eric Disend is a Partner and leader of the new Capco Digital group and Innovation lab based in New York City