Amazon.com is a disruptor. This is well established. In a little under 20 years, they have become the world’s largest online retailer. They have ushered in seismic (and often calamitous) changes for their traditional competitors across a huge variety of industries—books, music, consumer electronics, even groceries and IT outsourcing.
We don’t usually consider them a disrupter in the financial industry.
But they are and it’s getting worse.
The unfortunate reality of B2C commerce is that a consumer’s expectations of a business are not exclusively determined by the industry that business is in. A consumer’s expectations for a bank aren’t just based on their experiences with other banks, but also by the examples set by companies in other industries that the consumer interacts with.
Having generated more than $60 billion in revenue in 2012, it’s clear that Amazon interacts with a lot of consumers. And its famous obsession with the customer experience means that it, more than most companies, sets consumers’ expectations for service across many industries.
Online Account Opening
Let’s take online account opening as an example. In the infancy of online banking, the idea of consumers applying for and opening accounts over the internet was a stretch. Financial products were too complex and personal. The account opening process would take way too long. Consumers wouldn’t feel comfortable applying for an account outside the branch.
Meanwhile, consumers were buying CDs, computers, tires, TVs, wedding rings, and millions of other products from Amazon online every day. And they were doing it easily with a single click using Amazon’s patented 1-click ordering process.
In a world where you can order virtually any product with a single click and have it delivered to your doorstop within two days, it’s natural to start thinking that every purchasing experience should be that easy. It’s natural to get frustrated when it isn’t—even to the point of being willing to switch providers in pursuit of that superior level of convenience.
Banks are not exempt from these expectations and the fear of not meeting them is driving financial institutions to start seriously investing in next-generation digital banking features including online and mobile account opening. In fact, a recent survey from Aite Group confirms that the top two reasons for investing in new digital banking features are to “respond to growing customer demand” and to “anticipate future customer demand”.
Mayday Mayday Mayday
Recently, Amazon introduced yet another customer service innovation for their customers. An innovation that may raise the service expectation bar even higher. An innovation that one reviewer called “the most remarkable customer service tool I’ve ever seen.”
It’s called Mayday.
It’s a feature that is available on the new Kindle Fire HDX tablet. Under the help menu on the new tablet a customer can hit “connect” and within 15 seconds be automatically connected with an Amazon service representative by video. The video window just pops onto the screen, allowing the customer to see the service rep (but not vice versa). Once the customer verifies their identity and account, the service rep is able to answer their questions by talking them through it, drawing on the tablet screen, or even remotely controlling the device. According to the majority of reviews, the service works exceptionally well. It’s fast and the Amazon service reps are friendly and knowledgeable (and not just about the Kindle Fire).
Mayday is an incredibly ambitious concept. If it is able to scale up while maintaining its speed and quality, this feature is really going to spoil consumers from a customer service standpoint.
If it raises consumers’ service expectations in the same way that 1-click ordering did, banks’ digital banking initiatives will have a problem. It won’t be enough to simply offer a mobile banking app. That app will also have to provide a customer service experience that’s at least as good as the tablet the app is running on.
There’s a more positive way of looking at this.
Amazon is giving banks a roadmap for how to deliver next-generation customer service.
Rather than waiting for Amazon to completely spoil consumers with new service innovations, banks can embrace these ideas proactively.
Why not explore the idea of a realtime video service feature built into mobile banking apps? Banks are already evaluating video conferencing as a feature of redesigned, lower cost branches. Here’s an opportunity to extend that same video customer service infrastructure to online and mobile channels. Imagine service representatives helping bank customers become comfortable using features like PFM or RDC; features whose adoption will improve overall profitability.
With their Kindle e-readers and tablets, Amazon is betting on the idea that if they make it exceptionally easy for consumers to consume books, music, videos, and apps then they will ultimately sell more. That’s why Amazon sells each Kindle Fire at a loss. That’s why they are offering Mayday as a free service (even though I’m sure it will be extremely expensive for them).
This isn’t to suggest that banks try to be exactly like Amazon. Banks shouldn’t build realtime video conferencing into their mobile apps just because Amazon has. That said, Amazon’s business model—make it as easy as possible for your customers to purchase and use your products—does seem like an appealing concept for financial institutions (particularly given consumers’ unwillingness to pay fees). Amazon’s customer service innovations are opportunities for emulation rather than burdens of expectation.
Author’s Note: In yet another example of Amazon’s drive to disrupt the financial industry, it recently has been reported that Amazon is planning to buy Gopago, a mobile payments start-up.
Alex Johnson is marketing specialist for Zoot Enterprises Inc., a provider of loan origination, account acquisition and credit risk management solutions for large financial institutions. You can follow him on Twitter @ZootAlex or Google+. Visit Zoot’s Credit Strategy Session and its Merchant Acquiring Strategy Session on PaymentsJournal.