The More Things Change, The More they Stay the Same

Username-Password.jpg Editors Note: According to Klaus Enzenhaufer, the 5 major pitfalls that financial institutions encounter with their digital channels are: quality, speed, user exprience, control, and running in place. In this 2 part blog series we discuss these pitfalls and how, even 2+ years later, financial institutions still face these same pitfalls. In this blog, we focus on quality and speed.

Two years ago, Klaus Enzenhaufer, Director of Technology at Dynatrace and formerly at Compuware, suggested there are five major pitfalls that financial institutions encounter as they extend their digital channels: quality, speed, user experience, control, and running in place.

Now in 2016, what Enzenhaufer said still applies to much of the industry in the United States, especially for regional and midsized financial institutions that are losing ground to the largest banks with which they compete. The fact, in and of itself, is not particularly surprising as financial institutions are, perhaps, the most risk adverse and slowest moving organizations in the world, other than governmental agencies. This is reasonable given the role banks and credit unions play in our economy. 

Their role is to protect the assets of businesses and consumers while using those assets to foster growth and financial security for these same customers. That is not an easy balance and certainly, we have seen the results of what happens when financial institutions are allowed to become too freewheeling; e.g. The Great Depression of the 1930s and The 2007 Great Recession. However, the risk aversion mentality can spread to become a very serious virus within a bank or credit union.

In digital banking, we have seen an example of this, which the lack of adoption by most financial institutions in the United States of Enzenhaufer's article demonstrates. At the same time, the emergence of new digital channel providers - documented recently in a report by Celent, shows that some progress is being made as early movers break with the herd to move from legacy providers to the more modern solutions needed to gain a competitive advantage. Over the next two postings, the 270° View will explore the phenomenon by comparing the predictions made by Klaus with the state of the industry today.

Quality: According to Enzenhaufer, mobile banking consumers worldwide use more than 150 different browser/device combinations, and as financial institutions look for ways to optimize the user experience for their customers across this dizzying array of configurations, they must consider deploying technical solutions that can decrease the complexity and costs associated with maintaining an "app for that" - and that and that.

 A sign of progress toward this is the fact that Responsive Web Design (RWD) has finally become table stakes for the digital banking solutions that expect to succeed in the regional and midsized institutions. However, too many of these suppliers still do not have a viable strategy for how to efficiently and effectively build and maintain apps for mobile devices.

Companies who are delivering platforms that can serve banks and credit unions for more than a few years have moved from "native" apps to hybrid options that decrease the maintenance overhead and customer impact without sacrificing the functionality gained via the native app approach. Too few financial institutions are demanding this as a mandatory requirement from their vendors. Those banks and credit unions are continuing to do business as they were two years ago.

Speed: Digital banking users have the same need for speed as other who use the Internet multiple times every day to access information and purchase goods and services. At the time Enzenhaufer wrote the article for Mobile Marketer, he stated that 89% of tablet users and 83% of desktop users expect sites to download in three seconds or less. Klaus also noted that, at that time, 59% of smartphone users expect a site to download in three seconds or less, but as with tablets that number is slowly creeping up. 

The trend has not abated, which is why some financial institutions have sought out digital banking solutions' intuitive design principles and the use of contextual action options that can help keep the digital banking customer moving along happily. However, a lack of consistency in the user experience and dependencies on single sign-on strategies remain common on the digital banking landscape and are a recipe for increasing frustration levels for many end users who want what they want now!

Three more elements highlighted by Klaus remain. The next offering on this site - The Insanity Defense in Digital Banking - will complete the set.