Capture the Digital Consumer in 3 Steps

This is a guest post by Sanat Rao – Global Head of Sales – Finacle, Infosys Technologies Ltd.

‘I tweet, therefore I am.’ This already-done-to-death adage seems to sum up today’s consumer – technophillic, independent, vociferous, participative and a real networker! I remember reading sometime ago that if Facebook were a country, it would be the world’s 4th largest! And apparently, 4 out of 5 consumers trust the recommendation of their peers, but less than 15% believe advertisements. Their message to businesses: ignore us at your own risk!

What must (traditionally stodgy) banks do to grab the attention of the digital consumer, who is defying established mores of communication, decisioning and consumption? In my view, they must cater to three important demands – for self-service, personalisation and co-creation.

Post-crisis, customers want to be in charge of their finances more than ever. Self-service channels give them greater control by distancing the bank from routine decision making. Direct banks have enabled customers to enjoy a full-fledged banking relationship, without ever having to step into a branch; P2P lending platforms have all but taken banks out of the equation; and mobile payment is bringing new financial independence to those on the fringes. This trend can only go forward.

With independence comes self-worth. The digital consumer expects her uniqueness to be recognised by the companies, products and services she deals with. This means that banks must find ways to allow a high degree of personalisation of their offerings at an individual level. Some, like this bank in Turkey are already doing so, by allowing customers to determine as many as ten parameters for their credit card.

Far from being a passive user, the digital consumer wants companies to hear her out before confronting her with new stuff. I think co-creation is one of the greatest win-wins of our time because it allows actual users to influence product development, and cuts down business’ cost, time and risk of innovation. If banks open their ears to the voice of their customer community, they will gain valuable insight into market needs, which, regulations permitting, can be deployed into new product development.

Now, I’ll play devil’s advocate for a bit. Sceptics and savants alike say that while the digital consumer is real, the opportunity might not be. This is because, fed on a diet of Internet, this breed believes that all good things in life, including banking must come free. So, how can banks induce these youngsters to part with their money? For that’s what it’s all about, isn’t it?