Modernizing customer communications and experiences to support the digital native generation

Today’s customers demand digital access and information from every business they interact with, including their financial service providers and insurers.

Unfortunately, when it comes to financial services, many customer-facing digital experiences are less than remarkable. Servicing communications are particularly uninspiring, often consisting of PDF versions of printed communications. It’s more than a problem with aesthetics: challenges in easily navigating to the right piece of information and the corresponding lackluster digital experience leaves customers with a sub-par impression of brands. When it comes to millennials — those digital natives who have an increasing share of global wealth and are a key new customer segment for financial services — poor experiences act as a deterrent to continuing the business relationship. To create better digital experiences, financial organizations must deliver personalized experiences in a manner appropriate to each channel – an approach that will relegate PDFs to the archive.

Customer expectations have changed dramatically

Times have changed. Today, consumers choose to interact with their financial service institutions and insurers online. The widespread adoption of online engagement began out of sheer necessity: within the first month of the pandemic, banks saw a 200% increase in new mobile banking registrations. Insurers, now forced to work from home, struggled to get printed communications out to their customers. Those early hard lessons of the pandemic drove the rapid creation and adoption of new technologies. Two years later, convenience, rather than necessity, has become the reason customers choose to interact online. Only 40% of customer respondents to a recent study by the American Bankers Association said they expected to return to in-branch banking after the pandemic. In other words, more than half will continue to bank online.

The same adherence to the comfort and convenience of online applications and transactions is true when it comes to servicing communication. At the same time, consumers are becoming more and more comfortable accessing services and information online, they are also increasingly migrating away from printed servicing communications: including account servicing changes, monthly statements, claims marketing offers, loss mitigation letters – in short, all the communications that happen during a client’s tenure, whether during onboarding, servicing, or renewal.

Meeting the new customer cohort where they’re at

The largest segment of today’s workforce consists of Millennials and Gen Zs. Growing in wealth and influence, they are the customers of the future – and increasingly of today. Confident in their technological skills, these digital natives have ingrained expectations as customers. They want fast and easy access to information, and vastly prefer their online interactions to be relevant and personalized rather than generic and not targeted. In short, they expect their vendors to know them and reflect that through their communications and interactions.  And they assume all communications will arrive via their preferred channel, which for most will typically be through their mobile device.

Thus, digital transformation is not just a necessity: it is a priority. A recent survey from Boston Consulting Group revealed that more than 80% of senior executives feel the increased need for digital transformation. Unfortunately, that digital transformation is not occurring evenly across all aspects of the customer experience.

Financial institutions have achieved some success at digitizing specific aspects of the customer experience. Customer acquisition, for instance, has become much more targeted and customized. The application and onboarding process has also improved and digitized. Customers can apply for credit cards online, where information is collected on digital forms which are much faster and more user-friendly than a long, printed form they previously would have had to fill out and mail in. Approval can be granted in hours, rather than weeks.

These digital strides don’t only apply to credit cards. In December 2021, McKinsey published a report which affirmed that 60% of consumers are ready for their mortgage application be an entirely virtual process. Knowing this, most lenders provide their clients with a seamless digital application process. But once that mortgage customer has been acquired, the smooth access to online process stumbles on the rocky ground of servicing communications.

Instead of continuing the seamless digital customer experience, servicing communications typically revert back to printed materials and correspondence sent by mail. The only interactive contact option becomes a frustrating phone call. Even worse, if the servicing communication materials do end up online, all too often they’re in the form of PDFs.

The problem with PDFs

All the way back in 1996, Jakob Nielsen of Nielsen and Norman explained that PDF files were not meant to be read online. Since PDFs contain masses of words and images, they are intended and indeed created, to be printed. In a follow-up paper written in August 2020, Neilsen said that online PDFs were “inherently inaccessible, unpleasant to read, and cumbersome to navigate”. More than 25 years later, many financial service organizations have yet to follow Nielsen’s recommendation to optimize content for online viewing, and instead still use PDFs to display their servicing communications.

Inaccessible; unpleasant; cumbersome: why, then, do organizations keep using online PDFs? In a word: convenience. Financial regulations demand institutions and vendors to meet specific reporting requirements such as the need to prove that specific information or disclosures were presented to clients at a certain point in time. A PDF is a convenient way to archive electronically those printed communications, and naturally financial services organizations seized upon these as an opportunity to quickly provide that same information digitally to its customers. Given the sheer volume and intricate content of financial servicing communications – the variable data, the varying state requirements, the different versions of products – it’s not surprising organizations defaulted to an available solution, rather than focusing on creating the best customer experience.

Businesses can be resistant to adopting sweeping change. But the pandemic proved that change can also happen overwhelmingly quickly. With mass shutdowns and quarantines in place, the immediate goal was to get processes and products online as fast as possible. Speed, rather than the quality of experience, was the first priority. As we look toward the future and build out our customer experiences to support longer-term competitive advantage, it is time to design forward-looking solutions, which consider both the business process and the customer experience.

Refactoring digital experiences for the future

The time has come for a true digital transformation. That includes moving beyond the tight, unwieldy confines of the PDF, as convenient as it might have been in the past. Financial organizations must rethink their approach to digital servicing communications, keeping key considerations in mind:

Ensure the customer experience comes first

• Take advantage of the dynamic features of the channel. Responsive pages, sub-second responses to deliver the required content, and intuitive navigation are just some of the considerations that can make a digital experience great.
• Customers want fast and easy access to the information they need. This needs to be easy to find and presented in a way that is appropriate for the channel.
• The content should be relevant and personalized. Customers want to feel as if you know them and not receive generic offers of the month or to have to scroll through the disclosures relevant to twenty other states to see the ones relevant to them.
• Customers want access to information that helps them. Well-timed promotions that provide relevant offers will be perceived as helpful and not intrusive.

Make efficient management a priority

• Find ways to eliminate redundancy when enabling processes, communications, and interactions to occur across multiple channels. Centralizing content into a unified content hub that abstracts content from the presentation layer and enables content to be re-used across channels will pay short and long term dividends in terms of eliminating redundancy.
• Build solutions that support agility and fast responses – both from your business teams in enabling new experiences and from your systems. Flexibility and rapid adaptability are vital to meeting customer requirements.
• When managed separately, each new communication channel introduces compliance risk. The more places disclosures exist, the more risk is entailed with every updates. Separate documents and channels are prone to missing deadlines and introducing human error.

A Better Way

Mired in the past, hung up on long-outdated technologies and PDFs, the servicing communications experience delivered by most financial organizations and insurers can leave customers unsatisfied and frustrated. Organizations with the foresight to recognize the value and potential of seamless digital servicing communications will not only help to retain current customers, but also expand their ability to win more clients in the future.

How to get there? Find out in Part Two of Modernizing customer communications and experiences to support the digital native generation. In the meantime, please read our latest blog on delivering better digital experiences.

To learn how Messagepoint helps financial services organizations and insurers create dynamic digital experiences for their customers, contact us today.