FOR BANKS, A LONG WAY TO EXCELLENCE IN DIGITAL SALES By Michal Panowicz, Saurabh Tripathi, Bharat Poddar, Aymen Saleh, Deepak Ravindran, Trina Foo, and Miguel Rodriguez-Sola T here can be a huge difference in the digital experience offered by different retail banks. To understand how big, lets look over the shoulders of two customers, Zuzanna and Oliver, as they use their mobile-banking apps. Its 10 a.m. in Warsaw, and with a few quick taps on her phone, Zuzanna is repay- ing a friend for last nights dinner. As she sends the money, Zuzanna sees a reminder to activate her new credit card. The bank will give her 5% cash back if she uses her card five times in the coming week, and its offering a discount at her regular coffee shop if she uses her card to pay there. She taps the “activate” button, which automati- cally loads the card digitally into her e-wal- let, orders herself a discounted coffee, and heads out for the day. The convenience and speed of this and other mobile-banking ex- periences have turned Zuzanna into some- thing close to a purely digital customer; she rarely steps into a branch office anymore. In another European city, Oliver is having a different experience. While attempting to open a new savings account, he gets frus- trated when the application form in the banking app doesnt prefill with his profile information. This means he has to pro- videyet againdata that hes given to the bank many times before. He gets stuck somewhere in the middle of the process and is forced to go to his local branch to complete the application. For banks, digital sales are a crucial new benchmarkand a logical next step in the race to digitization. For every one time that customers visit a branch, they now access their banking apps between 50 and 80 times. And this doesnt take into account visits to bank websites, which make the ra- tio of digital to physical interactions even more lopsided. Yet despite this mammoth behavioral shift, most banks proportion of digital sales hasnt increased by much. It remains an opportunity that banks havent seized. In their next phase of hiring, technology buying, and strategy formulation, banks need to create a foundation for digitalBoston Consulting Group | For Banks, a Long Way to Excellence in Digital Sales 2 sales. The ones that do so will gain a last- ing advantage. Retail Banks Preparedness for Digital Sales To determine the extent to which custom- ers are willing and able to buy bank prod- ucts digitally (by using a banks mobile app or online site, rather than by visiting a branch), we sat down with actual custom- ers of more than 140 banks globallyour “mystery shoppers”while they worked with more than 210 sales-related features on their digital-banking apps and websites. We looked at the following features and scored their effectiveness: Marketing and Engagement. The best banks display and time their digital messages according to where and when they are most likely to be relevant to the individual customer. Messages appear in multiple places across the mobile app, starting on the home screen or notification center and continuing across product pages. They come in a range of formats (including carousels and videos within banners) to increase the chances of success. The objective is to personalize the message so that the customer sees it as having been created “just for me.” Product Research. Here we gave the highest scores to banks that use their digital apps to provide relevant infor- mation about products and services and that optimize the displayed infor- mation to the size and format of customers devices. In addition, the most advanced banks, rather than limiting themselves to static displays, use formats such as explanatory videos and interactive comparison and solu- tion wizards. Third-Party Products. The digital economy creates an opportunity for banks to put themselves at the center of consumer ecosystems by providing access to other financial and nonfinan- cial products. To date, not many banks have expanded their offerings in this way, although a few do offer insurance, merchant discounts, and even market- places that help steer customers to the best deals on utilities, real estate, and travel. Usability and Delight. Many apps provide a little kick that makes users want to return: the celebratory music that plays upon completion of a cross- word puzzle, the voice options on the Waze navigation app, Shazams infalli- ble name-that-tune music service. Banks could approximate this experience with great graphics and animation, easy-to- use interfaces, and the economical use of words. Its about instant gratification and delivering a delightful experience. Product Application and Fulfillment. It only takes a few minutes to join mobile services like Uber and Lyft, and a few seconds (sometimes a single click) to buy products from Amazon. Even brand-new users dont get lost. Banks should strive for something similarand the best ones have, by simplifying the sales process, providing trackers and prefilled forms, validating information on the fly, and giving customers the ability to save an application and pick it up later. Assisted Sales and Support. The best banks also understand that when self-service is falling short for a custom- er, its sometimes useful to provide immediate direct support in the form of a knowledgeable human advisor, wheth- er through a chat, a phone call, a video, or a quick screen-sharing session. These features offer guidance at precisely the moment its needed and dramatically increase the odds that the customer will complete the digital purchase. Not many banks are doing a good job in all these areas simultaneously. In observing our mystery shoppers, we found that very few banks are delivering personalized mar- keting to their customers mobile devices. (The Polish bank used by Zuzanna is the rare exception.) Many banks provide prod- uct information over their digital channels