Online, Mobile, Digital: What's In A Name?

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Earlier this month, The Financial Brand announced that it was changing the name of its recently acquired Online Banking Report to the Digital Banking Report.  According to Jim Marous, the reason for the name change was to expand the coverage of the report to include “the vast digital banking ecosystem.”  Jim and The Financial Brand are some of the first – along with Gartner and a few others – to reinforce the strategic nature of the digital banking channel by departing from the fragmented terminology that too many organizations, firms and individuals in the industry still use. 

Over the last 12 to 18 months, my CEO and I have been repeatedly flummoxed by the questionnaires and queries we receive from researchers and reporters that continue to segment the digital landscape by device (online, mobile, tablet) or services (personal financial management, P2P, bill pay).  Actually, in these situations, I am the one who is flummoxed.  My CEO gets just plain irritated because he has written and spoken often about the fact that such an approach to meeting the digital needs of the consumer might be good for vendors (in the short term) but is unsustainable for financial institutions that want to remain competitive in the marketplace.

Though much has been and continues to be written about the urgent need for a strategy around the physical branch, there seems to be limited focus in the commentary concerning the fact that the digital channel is now the branch for all intents and purposes.  Yet, as with the physical branch, many financial institutions still lack a strategy for how to use the digital branch to attract and retain customers.  Too many FIs still deploy discreet point solutions within this “digital branch” that  present their customers and members with a different, and usually suboptimal, service (user) experience. 

And while I have seen few statistics about the experience in the physical branch causing the loss of profitable customers, I have seen stats that suggest customers and members – especially the highly coveted Millennials – are leaving banks and credit unions that do not offer them the digital experience they expect.  It is time to follow the example set by Jim and others by eliminating language that perpetuates a tactical view that is costly, complex, inflexible and damaging to customer and member retention.  It is time to talk about a digital strategy and then measure as well as report on FinTech vendors based on how well they support that strategy.

Many banks and credit unions already are jettisoning the tactical for the strategic in their organizational structures.  Increasingly, the businessperson we interact with in sales and marketing discussions carries a title and a set of responsibilities that incorporates a holistic view for the digital landscape through which the institution delivers services to customers and members.  We spend a lot of time with our customers and prospects focusing on questions around the optimized user experience regardless of device and eliminating the points where the institution does not control that experience (e.g., single sign on).  All these are very good indicators of the strategic view becoming the norm.

Admittedly, some number of financial institutions – for different reasons – will continue to use disparate channels, products and infrastructures to deliver their digital services.  However, if they are to survive, they will need to replace the legacy technology that powers those channels.  When they make those replacements, they will do so with a strategic mindset, not a tactical one.  Otherwise, their customers and members – who define the digital experience they have with their bank or credit unions using the likes of Apple, Google, PayPal and Amazon as benchmarks – will find another institution to meet their needs.

Compared to a year ago, progress has been made.  More and more research firms, publications and institutions have started looking at the digital channel strategically.  It is only a matter of time until most of them join Marous and the others in treating the digital landscape as a single experience and not a set of siloed services.  That will help lower my CEO’s level of aggravation, which will be good – for me, anyway.