Over the last two years, there has been a significant shift in consumer behaviours around digital applications and digital services. Significantly, these shifts in consumer behaviour are most pronounced amongst younger consumers aged 18-34. For banks, where the satisfaction and loyalty of customers are so intimately tied to their digital experience, success lies in determining and discerning these seismic shifts.
Fortunately for financial organisations in the Middle East, the latest research from Cisco, The App Attention Index 2023: Beware the Application Generation, offers insight into how young consumers use digital services. The ‘application generation’ prides itself on enjoying only the most innovative, intuitive, and secure digital experiences. And they’re determined to take action against brands whose applications fail to meet the required grade.
Worryingly for banks and financial institutions, the study finds that 78% of the application generation has experienced performance issues when using banking and insurance applications over the last 12 months. And as a result, they are growing increasingly frustrated. Indeed, more than a quarter of these young consumers claim that they are now ditching banking applications altogether and reverting to traditional channels such as branches and contact centres, which are considerably more costly to run.
The consensus is that 15,000 consumers, including 1,000 in the UAE, are sending a strong message—banks must improve their digital experience, and those who fail will be punished.
The best experiences, without exception
As you would expect, the application generation is characterised by its heavy utilisation of digital services. On average, users in this demographic utilise 41 different applications each month, compared to 30 amongst people aged 35 and above. And 92% are regular users of at least one banking and insurance application.
These young consumers see these applications as a vital role—controlling their cost of living. 90% of the application generation report that they rely on digital services more because of this, and 63% say that applications and digital services are hugely important in helping them manage their finances during this challenging time.
While banks will see an opportunity in that the application generation relies on digital services more than other groups, they must recognise that this comes with a significant caveat—this group is far more mindful about how they use applications. They favour quality over quantity, and over two-thirds want to control or limit the number of applications they use. The application generation is constantly evaluating the relevance and value, or otherwise, of digital services. They want every digital experience to enrich their lives.
For this reason, the brands they gravitate towards are ready to push the boundaries of innovation with their digital services. They pride themselves on enjoying the most intuitive and personalised digital experiences and constantly look for the next big thing. For example, 80% feel optimistic about using super apps, which combine multiple digital services into a single application, pointing to a wide range of potential benefits.
Underperformers will have to pay the price
Because applications are now fundamental to so many aspects of their daily lives, the application generation is more profoundly affected when they encounter problems using applications. Indeed, the majority claim that a bad digital experience has impacted their well-being on at least one occasion in the last 12 months.
And with so many impressive choices, younger consumers feel there is no excuse for brands to deliver bad digital experiences. They feel burdened by applications that let them down, and they’re not willing to put up with it. About 65% of the application generation report that they are now less forgiving of poor digital services than 12 months ago. And in response, they’re taking action, immediately deleting applications and switching to alternatives.
Of course, with banking, simply deleting an underwhelming application doesn’t end the relationship. People are locked into relationships with their bank, and switching can involve a lengthy and complex process. This only frustrates the application generation, making them feel stuck and even more annoyed.
But far from meaning, banks will be let off the hook with little to no consequence; this could potentially translate to higher customer service and support costs. Rather than accepting poorly performing applications, young consumers are instead ditching digital services altogether and switching to alternative channels. The research highlights how suboptimal digital experiences make The application generation want to go back to face-to-face and phone interactions with brands, and they’re feeling increasingly empowered to do so. Indeed, this is why 27% state that they’re now inclined to visit branches and phone contact centres rather than using banking applications.
Application observability is a vital tool
With the Middle East’s large population of younger generation consumers, banks can’t afford to overlook the needs of this cohort. At a time when many are looking to rationalise their branch networks and control cost-per-interaction ratios across their customer experience operations, banks must continue to grow the number of customers using their digital channels. This means they can’t afford any slip-ups in the digital experience.
But with IT environments that are increasingly complex and dispersed, IT teams are finding it more challenging than ever to keep a smooth sailing ship. The chances of an issue impacting end-user experience are dramatically rising, with all the implications this brings regarding loss of customers, revenue, and reputation.
Application observability solves these challenges, as it can provide banking technologists with unified visibility across their hybrid environments. With application observability, IT teams can quickly identify and resolve application availability, performance, and security issues, and by correlating application data with key business metrics, they can prioritise those issues that could do the most damage to the digital experience.
Middle East banks have invested heavily in fostering a ‘digital-first’ mindset among their customers. But now, they must ensure that their digital services meet expectations, especially those of the application generation. It is time for banks to optimise application performance and security; otherwise, they’ll face the consequences.
