Driving engagement is top of mind for most digital banking leaders. Forrester’s research reveals the immense value — for both customers and banks — of useful, convenient digital banking experiences. The right mobile banking offerings, for example, can unlock new value for a customer and differentiate a bank’s brand. And our broader customer experience research — such as our Customer Experience Index (CX Index™) — shows that improvements in experience design strengthens a bank’s business outcomes in three main ways:
- Retention — the likelihood of a customer staying with the brand.
- Enrichment — the likelihood of a customer buying additional products and services from the brand (and, in banking, to turn to the brand with their next dollar or decision).
- Advocacy — the likelihood of a customer recommending the brand.
As they invest in and prioritize digital experiences, bank leaders should consider the willingness of customers to share more data with the bank. This willingness forms an important part of a broader “value flywheel.” The flywheel is especially powerful in banking, since trust (along with related factors such as advice and guidance) is the foundation of sustained, profitable growth (see figure below).
In December, we asked consumers in the US and UK about the types of companies with which they are comfortable sharing data — and the factors that increase their willingness to share personal and financial data. We found that:
- People tend to trust banks to keep their data safe. When asked which “types of companies” respondents “trust to keep [their] personal information and data secure,” banks earned the top spot: Nearly three-quarters (72%) of UK adults and nearly two-thirds (64%) of US adults said they trusted banks (see chart below). Only credit card companies and health providers garnered similar responses in both countries.
- Most customers are willing to share more data in exchange for value — especially for better money management. Across both the US and the UK, 59% of respondents said they’d be willing to share more of their personal and financial data with a financial services company if they gained some sort of benefit from it. The desirability of specific benefits varied, but in both markets, a plurality of respondents said they’d share more data if the bank “[helped] me save more money.” Other value props included “to let me keep better track of my money” and “to give me long-term financial advice.” It’s clear that banking customers are prepared to share more data, provided the bank offers them something in exchange.
The idea of building a “flywheel” has been in vogue for years, so execs might be wary of yet another one. But in this case, the two variables directly fuel one another: Increased and expanded data sharing by bank customers enables banks to offer new and greater value to those customers, which in turn drives deeper engagement and willingness to share even more data. Of course, there’s a big “if” in here: This data-for-value flywheel only works if the bank’s digital, data, and business teams can harness the data with which customers entrust them. To that end, executives should make the most of Forrester’s Data, AI & Analytics service.
Executives and leaders at banks should strive to enrich their customers’ digital experiences, not just so that they get higher engagement, user satisfaction, cross-sell rates, and brand advocacy but so that they build and strengthen a data-for-value exchange that helps them create ever-better offerings and gain a durable competitive advantage.
Figure 1: Illustrating The Data-For-Value Exchange Flywheel
Figure 2: People Tend To Trust Banks With Personal And Financial Data