December 18th, 2018

Virtual Banking is Here – Why & How Hong Kong Banks Can Evolve to Seize the Day!

For the past decades, banking has long been an industry that has branded themselves on trust and stability, however with the rise of today’s demanding consumer taste, banks are facing a new paradigm centred around the need for convenience, customer experience and choice.

While physical banking will still hold a place for brand presence throughout the territory, consumers prefer to handle their banking online both on their computers and mobile devices.

In fact, Hong Kong has more than 5.53 million smartphone users in 2017 and a predicted 80.69% of Hong Kong’s population will be using a smartphone by 2021. Consumers today are demanding the exact same convenience they are enjoying in their daily lives and the banks that recognize and provide this will enjoy the fruits of today’s digital world.

With the rise of Hong Kong’s Banking Made Easy initiative, there is a commitment in the government to better facilitate virtual banking. The Hong Kong Monetary Authority (HKMA) will be issuing virtual banking licenses to applicants in the first quarter of 2019, marking a new era of banking as well as a golden opportunity for established banks to capture.

Why Virtual Banking?

Simply put, virtual banks are financial institutions without any physical branches where all transactions are done online. With the majority of banking today done either through digital transfers or through the use of cards, virtual banking opens up a whole new avenue where more emphasis can be paid to the customer and their needs instead of capital investment into expensive branches and their manpower.

Customers Are Changing & Banking Needs To Be Evolving

When it comes to charting a course for virtual banking success, the first step is to always step into the shoes of the consumers. As consumer demand and taste become more adapted to the fast-paced lifestyle we are used to, much more is expected from our banks, especially the 6 main challenges that affect customer experience today:

1) Onboarding & Opening Of New Accounts – A process that could take hours or even days depending on the traffic in the physical branch.

2) Poor Digital Navigation Systems – While many banks have taken steps to go digital with a website, the interfaces are outdated, causing browsers to have a frustrating time navigating to the product or service they desire.

3) Inconvenient Physical Locations / ATM Networks – Perhaps the biggest frustration faced by consumers today is difficult to locate their desired bank branch in their current location, leading to additional time wasted to travel to one.

4) Unsatisfactory In-Branch Resolution Of Issues – From long wait times to poor customer service, customers are facing inconsistent experience when it comes to physical banking.

5) Poor Omnichannel Experience – While an increasing number of banks have multiple channels to reach their customers such as website, emails and mobile apps, most information and preferences of individual customers are lost the moment they leave the channel.

6) Lack Of Real-Time Messaging – Customers desire to be updated when it comes to their personal banking situations, however many banks today either send updates through physical mail or none at all, leaving many consumers in the dark.

The Key Is Personalising The Customer Experience

One of the key strategies virtual banks have to successfully execute is the customer journey mapping to visualise and understand the customer’s experience as they browse, research and utilise the financial products and services on offer.

In virtual banks, the steps could originate from a varied number of channels and personalising the right channel with the most impactful content will win the loyalty and business of the audience.

Take for example, a prospect that discovers your virtual bank brand over social media page. He will be given a different customer experience (one that is more light-hearted and socially engaging) compared to the subsequent landing page that lays down a more constructive argument to sign-up for the service before receiving an email reminder to activate their new service for use. This personalisation of content and user experience is a key differentiating factor as price and product are no longer the sole considerations for the consumer.

In addition, there will also be a need to provide consumers with a seamless transition and connectivity between the different channels of the virtual bank. For example, a customer that consistently checks his credit card statements and bank balance through his browser will have this remember and when he uses the bank’s app, those two functions will be at the forefront of the app, saving him time in navigating around.

The Need For Agile User Experience (UX)

When a consumer first lands on your website the first impression they get will be determined by the UX of the site. From the navigation menus to the layout of the site and the various call-to-actions and offers, having a UX team that constantly iterates and conducts A/B testing is key to optimizing the user experience and maximising those conversions.

Take for an example, a customer that lands on a savings account enquiry page will likely require a UX that highlights all the necessary information, benefits and scenarios. From interest rate calculators to different projection charts and a clearly laid out feature and benefit showcase, the UX here has to guide and flow the reader through all the way to the call to action. However, the final account application page would require a much simpler UX that guides them to sign-up as soon as possible with minimal confusing information.

To take it a step further, dynamic UX coupled with big data and artificial intelligence would be helpful to help understand the browsing patterns of customers as a whole and individual browsing patterns. These allow for dynamic and on the go UX changes that tackles both individual needs and the website experience as a whole.

Embracing New Technologies From Websites To Apps For Better Customer Engagement

Today, a myriad of touch points will be needed by virtual banks to not only capture the attention of the consumer but to also provide flexibility for them to conduct their banking online. The staple of these touchpoints would be a website where maximum depth of banking services and transactions can take place, from account opening to credit card payments and beyond. This can then be adapted into the mobile and tablet browsing experience, allowing additional touchpoints for the consumer of today.

Another popular and highly effective touchpoint is the mobile app. While websites are fine for computer users, they do pose some UX difficulty when it comes to interacting with them over a mobile browser even if they are optimised for mobile. Mobile apps, however, give virtual banks a flexible and immersive touchpoint for their consumers to interact with, allowing for a combination of both functionality as a transaction portal and a hub for offers and new updates.

At New Digital Noise, we believe in helping virtual banks reach out to customers through the correct utilisation of digital touchpoints. One such project we undertook was helping Prime Credit (a local financial company) develop WeWa Card mobile app for millennials to apply for their credit card by cutting down the application process to only 5 simple steps in comparison to the lengthy forms of a traditional application. Today, this app is called OMYCard Mobile App. It retains most of the functions and user experience we designed.

From chatbots to mobile Apps, virtual banks today will have to utilise the right digital tools to not only cut through the noise and competition but also to provide the best user experience possible to gain the loyalty of the customer.

Utilising Holistic Digital Marketing Campaigns For Brand Awareness & Customer Acquisition

While traditional banks long have a heritage of brand awareness and a clientele that has been passed down from generations, a virtual bank will have to utilise every digital channel possible due to the lack of a physical presence.

The first step is to create and consolidate all the various digital touchpoints a virtual bank has. Most commonly, these will include their website, social media pages such as Facebook and mobile apps. Depending on the goal and demographics of the customers being targeted, holistic digital marketing campaigns will have to be created to focus on lead generation – namely signing up new customers (whether it be to open a savings account or a credit card for daily use).

From search engine marketing to social campaigns, virtual banks will also need to utilise the correct mixture of marketing channels to create buzz and awareness of their brand whether their target audience is doing a search on Google or browsing through Facebook.

One such campaign we have successfully launch is for Blue, a digital insurer partnership by Aviva, Hillhouse Capital and Tencent. We utilised the various digital marketing channels to not only generate awareness but also drive sign-ups. Here are a few examples:

  • Google Paid Search Ads – Allowing consumers with buying intent to discover Blue’s offerings and direct hot traffic to the website.
  • Facebook Page & Paid Ads – To create social awareness, build and engage an audience over time with content marketing for eventual conversions.
  • Cognitive Ad – To understand consumers needs and interests by deploying the latest AI-enabled interactive advertising on websites and WeChat.

Becoming A Leader In Virtual Banking Means Embracing Digital

While becoming a virtual bank brings with it incredible benefits such as the absence of any physical branches and thus a lower threshold of capital investment, the challenge lies in acquiring customers and maintaining their loyalty for the long-term.

By understanding the customers’ unique needs and enhancing their customer experience through the correct adoption of digital marketing and technology, financial institutions today can take advantage of Hong Kong’s push in becoming a virtual banking hub and capture a slice of this very lucrative pie!

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