Digitalization remains a work in progress for retail banking brands, contributing to an average or below performance in digital marketing for more than two-thirds of brands, according to Gartner, Inc.
The inaugural Gartner L2 Digital IQ Index: Retail Banking U.S. 2019 report ranks the digital performance of 80 retail banking brands operating in the U.S. market. These brands were measured across more than 1,200 data points against four critical dimensions: site experience, digital marketing, social media and digital commerce. From these findings, three brands were classified as Genius (Bank of America, Wells Fargo and Chase), 22 as Gifted, 21 as Average, 25 as Challenged and nine as Feeble.*
“A majority of U.S. retail banking brands have a lot to worry about on the digital front,” said Chris Bendtsen, principal in the Gartner for Marketers Practice. “With new tech competitors on the horizon, digital first banks eating away at their margins and constantly rising customer expectations, it's no longer good enough to deliver just basics, like online enrollment. Banks must take the next step in digital innovation to compete with fintechs and online banks.”
Fintechs and online banking brands are disrupting the existing business model by focusing their efforts on select digital strategies to outperform traditional banks. Generally, fintechs favor minimally designed websites and instead emphasize their mobile apps as primary touchpoints — both for prospects and customers.
Seventy-three percent of fintechs and 60% of online banks prominently display mobile app download calls-to-action on the mobile sites’ homepages. This compares to just 53% and 42% of national and regional banks, respectively. Using this type of mobile app promotion, fintechs and online banks outperform the rest of the brands for both app downloads and monthly active users.
“Challenger brands have perfected the art of using their mobile apps for more than just servicing customers,” said Mr. Bendtsen. “To thrive in a mobile-first environment, traditional retail banks should think about expanding their mobile app product roadmaps to include prospecting capabilities and test a variety of tactics for promoting mobile app downloads to defend against challenger disruption.”
Other key findings from the report include:
- Overcrowded Search: Comparison websites receive a high volume of traffic from search, siphoning organic nonbranded keyword results away from retail banks. Brands own just 19% of organic first-page results surfaced by banking keyword searches.
- Guided Conversion Gap: Public-facing brand sites lack critical features to guide prospects along the customer journey, such as content-to-enrollment handoff. Direct links to online enrollment from product comparisons exist in just 56% of brands that offer checking and savings accounts.
- Role of the Branch: Brands actively invest in branch locators and ATM finders to bridge the online-to-offline transition, as younger generations still frequent branches in conjunction with app use — especially as brands adapt branch formats to accommodate evolving consumer expectations.
- Help Needs Help: Basic self-service help and customer service features are common on brand sites, but more advanced features for immediate support are lacking. Only 38% of index brands have searchable FAQs on public sites, and 35% offer live chat customer service.
Additional details on the digital performance of retail banks in the U.S. is available to Gartner for Marketers clients in the report “Gartner L2 Digital IQ Index: Retail Banking U.S. 2019.”
Companies were classified as either “Genius,” their digital competence is a point of competitive differentiation for these brands; “Gifted,” the brands are experimenting and innovating across site, mobile and social platforms; “Average,” digital presence is functional yet predictable; “Challenged,” limited or inconsistent adoption of mobile and social media platforms; and “Feeble,” investment does not match opportunity.
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