The Extract: Changing Banking Consumer Behavior Requires Improved Digital Engagement

  • Alex Jimenez
  • April 09, 2021

The Extract from Extractable is a condensed roundup of digital experience news for financial services institutions, and our take from San Francisco.

This week we look at the possible changes in banking consumer behavior going forward and how organizations can engage customers better through digital. We also look at the future of work and some of the learnings and challenges from the past year.


Post Pandemic Banking Consumer Behavior

For the past year, I’ve been part of an ongoing debate about banking customer’s behavior. There is a camp of bankers who believe that once this pandemic ends—and may we be lucky enough to see an end to it—banking customers will “go back to normal.” The other camp says that consumers have experienced the convenience of digital experiences, in all facets of life, and there is no way they’ll go back. The truth is likely to be between the two extremes, but I side with the digital camp.


Digital vs. physical strategies

According to an article in The Financial Brand by Steve Cocheo a BAI study found that “half of consumers are using digital products more since the pandemic’s arrival, and that 87% of them are planning to continue this increased usage after the pandemic.” A report by Accenture “forecasts nearly 420 billion transactions worth US$7 trillion are expected to shift from cash to cards and digital payments by 2023 – and increase to US$48 trillion by 2030.” While these trends were happening before the pandemic, there is no denying that the digital banking “cat is out of the bag.”

Not everyone seems convinced of the primacy of digital.  As noted in The Financial Brand article, Jen Piepszak, Chief Financial Officer at JPMorgan, “was probed concerning the influence of the COVID-19 period on its digital versus physical strategies.” Piepszak responded, “It is true that we’ve done some reprioritization to accelerate certain things in terms of our digital capabilities, … given customer needs through the crisis. But broadly speaking, we haven’t changed our priorities. We won’t make any decisions before we’ve had the benefit of really learning everything we can and listening to our customers. But it is possible that we accelerate some of our de-densification plans … in certain markets while we continue to expand to new markets.”


Changing behavior

A research report by Plaid argues for the increasing use of fintech.

“The majority of Americans used fintech before the crisis, but COVID-19 accelerated adoption — during the pandemic, people used more fintech apps, more frequently and for more financial tasks.”

Cocheo adds, “overall, 59% of Americans use more apps now to manage money than pre-COVID-19. This usage covers a wide range of financial tasks, led by increased handling of daily banking, but bringing in many more money matters.” The BAI study also adds that the move to digital isn’t just generational, as many bankers continue to assume. Cocheo quotes BAI’s Karl Dahlgren, Managing Director,

“Responses on learning how to use digital services were consistent across all generational cohorts. In fact, Boomers who found the digital banking experience intuitive came to 81% — suggesting that stereotypes about older consumers and technology simply are not true.”

Banks are alo reporting seeing changes in behavior. According an article in PYMNTS quoting an Accenture report, “Bank of America, for example, observed that 41 percent of its customers used mobile channels in 2020, whereas 37 percent did the same in 2019 and 26 percent did so in 2018. Half of all U.S. bank customers used mobile apps or websites to interact with their FIs at least once a week, up from just 32 percent in 2018.”


Increasing engagement

For digital bankers the trick now is to continue to engage customers who have recently adopted digital banking. In an article in Finextra, Ahmed Khidhir, Digital Banking Expert at Temenos, notes that “banks will need to move away from purely transactional digital apps by offering digital experiences that connect with the consumer on an emotional level.” The driver for building a connection isn’t merely a better experience. Khidhir adds,

“Emotionally connected customers exhibit less price sensitivity, purchase more products, and recommend a given brand more compared to customers who are only highly satisfied. According to the Harvard Business Review, after a major bank introduced a credit card that was designed to inspire emotional connections with holders, its use increased by 70%.”


Here are Khidhir’s three examples of how banks can build emotional connections via digital banking:

  1. Create “wow” and “cool” experiences for the customer. Khidhir gives the examples of Tesla’s unique capabilities like dancing door wings and Google’s doodle that elicit an emotional response.
  2. “Connect with the customer’s lifestyle.” Khidir’s example is “Flowe, an environmentally friendly challenger bank launched in Italy in 2020. Targeting a younger demographic, Flowe helps customers build a more sustainable future via a range of initiatives, including a debit card made of recycled wood. Flowe’s digital banking app likewise helps the consumer to be more eco-friendly by offering personalized advice and gentle nudges based on the CO2 impact of the user’s transactional behavior.”
  3. Add the human touch. Khidhir notes that “According to Deloitte, the merging of digital and real-life experiences is a key component in achieving an excellent overall customer experience.” The application of technologies like video/audio banking, live chat, and appointment setting seem like obvious examples for banks.

Khidhir counsels “to successfully engineer digital experiences that enable positive emotional bonds, banks will need to adopt a mindset that focuses on emotional engagement and customer intimacy as much as functional superiority.”


If you are interested in following Khidir’s advice but don’t know where to turn, our team of digital banking and digital designers can help.


The Future of Remote Work

In retail banking, no question is more polarizing than the future of branches. However, it seems I have come across a much more divisive question. Will a large number of bankers move to work remotely going forward? Of course, the question isn’t just limited to banking.


A delicate balance

Recently, Microsoft posted the results of their research on the topic in an article called “The Next Great Disruption Is Hybrid Work – Are We Ready?” They discuss the trends that they see emerging:

  1. “Flexible work is here to stay.” While there has been a trend for flexible work in the past, the pandemic proved to many that it can be done. It pointed to some gaps such as tools, availability of fast broadband, and office supplies. On the other hand, “last year’s move to remote work boosted feelings of inclusion for workers because everyone was in the same virtual room.” The report sees a reverse impact as hybrid work will mean two separate sets of experiences ripe for issues of inequality.


  1. “Leaders are out of touch with employees and need a wake-up call.” Another area of inequality is the disparate experience between managers and their teams. “Sixty-one percent of leaders say they are ‘thriving’ right now — 23 percentage points higher than those without decision-making authority.” And when they look at demographics, “Most leaders in our study were male information workers with an established career – the near opposite of those struggling most.”


  1. “High productivity is making an exhausted workforce.” Availability when the world is shut down has resulted in a spike in productivity but at what cost. “One in five global survey respondents say their employer doesn’t care about their work-life balance. Fifty-four percent feel overworked. Thirty-nine percent feel exhausted.”


  1. “Gen Z is at risk and will need to be re-energized.” The youngest workers, who have likely not yet defined their roles or their network are suffering. They say “they are merely surviving or flat-out struggling right now.”


  1. “Shrinking networks are endangering innovation.” The report found that “teams are more siloed in a digital work world.”


  1. “Authenticy will spur productivity and wellbeing.” A positive trend, however, is genuine human connection without the pretense of office boundries. Personally, I have had more conversations with people about music because of what they see when they talk to me (check my Twitter profile picture if you are intrigued).


  1. “Talent is everywhere in a hybrid world.” I’ve had many conversations with banking executives who have seen the possibilities of tapping resources not found in their geography. It has been a boon to some data scientists in my network.


In an article for ZDNet about Microsoft’s report, Chris Matyszczyk makes the connection between the mostly negative news from the report and Microsoft itself. He also finds the suggestions made in the report to be much too simplistic. Matyszczyk makes the point that “it’s been clear for a long time that social and economic inequalities in America are increasing.” He gives the examples of lack of maternity leave, and the attitude that work wins out over any work-life balance. “An ethos of constant individualistic drive isn’t capable of embracing, well, having a life.”

Humanity in professionalism

On a more positive note, Jon Friedman, Corporate VP, Design & Research at Microsoft, writes in Fast Company about how “the pandemic has scrambled so much of the ‘normal’ professional experience <including> our concept of professionalism itself.” For those of us that have been entirely remote through the pandemic, we have made connections based on the type of things we might have not opened about. Friedman explains, “showing our lives and personalities, the pandemic is accelerating a new definition of professionalism that’s refreshingly human.”


Friedman catalogs three key new ways of professionalism:

  1. “Energy is the new time management.” We have been forced to manage work around levels of energy instead of time. This has been a challenge but Friedman sees that “acknowledging individual ways of working can catalyze the collective power of our best energy and ideas—with real individual and organizational benefits.”
  2. “Expressive feedback promotes belonging.” Obviously, remote work doesn’t allow for the usual feedback from physical meetings. However, a surprising result has been the adoption of emojis, GIFs, and other digital shortcuts that in many ways has resulted in heightened connectivity.
  3. “Professional doesn’t mean emotionless.” Many years ago working for a bank, I was admonished for including an emoji in a work email. Those same bankers are now sending GIFs to each other.


This week several large companies made announcements about the returning workforce. Goldman Sachs announced that their intern program will be held in their offices. In turn, Wells Fargo announced a return to the office this fall. Google indicated that they would limit remote work, citing lack of innovation as a problem. Finally, Amazon announced a “plan to return to office-centric culture by fall.”

Hopefully, some of the learnings from this past year will be applied to both remote and office work. In the meantime, some of us remain remote.


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