Understanding the 'uberbanked' consumer at your ATM

Oct. 20, 2016 | by Suzanne Cluckey

There's a new word for in the banking world "millennial," a word that sums up a trend that financial institutions have been observing for some time now:

überbanked (ue'bər baŋkt') adj. 1 lit., over- or beyond banked 2 A phenomenon occurring within the banking industry whereby the traditional value of the financial institution as a central trusted intermediary is being eroded by new models of technology-to-consumer exchanges.

More simply, "überbanked" describes an emerging movement among consumers towards cherry-picking new technologies to construct a portfolio of financial products and services sourced from multiple institutions, peers and alternative providers.

Übersimply, this new breed of financial services consumer is shaking up the banking industry on a grand scale and forcing traditional FIs to rethink the expectations and experience of a new and very different kind of customer — or face the possibility of losing more than one-third of their marketshare by 2020, according to statistics from Accenture.

Where this rethinking could lead was the subject of "5 awesome ways to improve customer engagement," a Tuesday morning webinar presented by Inetco Systems Ltd. and ATM Marketplace.

Panelists Marc Borbas, vice president of product marketing at Inetco, and David Johnson, product manager advisory for self-service solutions at Fiserv, discussed the implications of überbanking for customer loyalty and retention, and steps that banks can take to rise to this new and unprecedented competitive challenge.

Borbas began by defining the challenge presented by the UB customer:

  • one-third have obtained at least one financial product from a secondary institution, frequently after shopping around online or via mobile;
  • a great majority (79 percent) consider their banking relationships to be merely transactional, making them price-sensitive and prone to silently defecting from an existing relationship with a financial provider; however ...
  • only 40 percent have expressed decreased dependence on financial institutions for their banking needs.

An instant poll during the webinar provided a snapshot of what audience members were observing at their own institutions in today's increasingly fragmented fintech environment:

  • nearly half (45 percent) indicated that they were seeing increased use of digital channels among current customers;
  • a little more than one-third (35 percent) said that they were not sure just yet how this was affecting their customer base; and
  • 10 percent responded that they were definitely losing wallet share to fintech providers.

"I would argue that these new consumer behaviors are really disrupting the traditional ways we measure what our customers are doing," Borbas said. "[For example,] monitoring the customer's web experience is no longer enough because often they're coming to us through third-parties, through partners, through APIs, and this isn't just an experience with our online banking website. It also makes problem isolation a little bit trickier, knowing whether the customer is experiencing issues is hard when you don't control the entire transaction delivery chain any longer."

Borbas introduced transaction monitoring and analytics as an effective way for FIs to understand customer behavior and expectations — and to find out how well they're delivering on those expectations.

Johnson joined Borbas to present real-world examples of how FIs can use transaction monitoring to collect, collate and customize massive amounts of data in highly specific ways to meet the needs of five different business units and teams, including: 

  • IT operations teams that need to manage the performance of critical devices, applications, networks, and host communications;
  • channel managers who need insight into customer use, cash flows and channel profitability;
  • card operations teams that need information about EMV fallbacks, card use and interchange fees;
  • digital banking executives who need a breakdown of customer activity across digital channels; and
  • risk management and security teams that need to swiftly identify and interpret unusual transaction activity.

This data can help improve performance not only from a granular, IT operations point of view, but also on a channel-wide basis Johnson said:

"Should I be placing more ATMs? Should I maybe be changing or swapping out some locations for other locations? Do I recognize where my high-value customers are using my services, and perhaps focusing resources on parts of the network where my high-value customers are, however you define that? It could be current customers, it could be customers that you're trying to acquire from a marketing point of view. Being able to see the detailed transaction data and line it up with your operations gives you great visibility to that."

In summary, Borbas said that with the überbanked customer, "Every transaction is an opportunity to know them better, to serve them better, and to figure out how best to cope with their changing behavior. ... The goal is to help each channel team to measure what matters to them while contributing their best to winning that überbanked consumer and keeping them one transaction at a time."

Get the free, on-demand replay of "5 awesome ways to improve customer engagement.


Topics: Software, Transaction Processing, Trends / Statistics, Webinars


Suzanne Cluckey / Suzanne’s editorial career has spanned three decades and encompassed all B2B and B2C communications formats. Her award-winning work has appeared in trade and consumer media in the United States and internationally. She is now the editor of ATMmarketplace.com and BlockChainTechNews.com
wwwView Suzanne Cluckey's profile on LinkedIn

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