Customer experience in banking

Rising customer expectations and changing behaviors have compelled banks to consider how they can improve their response to customer needs. In today’s banking market, staying competitive demands a customer-first mindset. Data and technology are critical to building and delivering superior real-time customer experience in banking that drives growth and increases market share. Attributes such as trust, reputation, history, and size have traditionally been the benchmarks through which consumers choose financial institutions. However, the tides of banking are changing. The evolution of technology has modified user priorities and increased the importance of customer experience in banking.

Many advanced strategies to attract, connect, and engage with customers have been designed and thought through by industry leaders. The aim is to create a seamless customer experience that effortlessly spans both the physical and the digital world, and responds to customer inquiries along with every touchpoint.

Failing to respond to the rapid changes in consumer demands, the continuous evolution of new technologies, and growing competition will ensure a certain loss of competitive positioning with customers in what promises to be an increasingly demanding industry.

 

Understand what customers want from you

Banks don’t have to wonder what customers want. There are reliable surveys that layout customer expectations in black and white.

Simplicity and ease

Customers demand ease and simplicity. The average person has up to 17 interactions a month with their bank, mostly online or on mobile, so a complicated or outdated system can lead to a lot of friction.

Personalization

Along with simplicity, banking customers expect personalized recommendations. 40% of banking customers listed more personalized service as a reason to switch banks, according to studies.

Education & guidance

Simplicity and personalization are customer expectations across all industries. Education and counseling, on the other hand, are somewhat unique to banking. Rather than simply trusting the big brands to know what’s best, customers want transparency into the banking process and to feel empowered in their choices.

 

79% of North Americans are open to receiving computer-generated advice on investments, such as asset allocation, and 74% would take input on which account type to open.

These stats show a willingness to use digital features to make banking decisions, as long as the tools can give them proper guidance.

 

Importance of CX in Banking & FinTech

The evolution of customer experience in banking traditionally was very slow. One of the milestones in that matter was probably the invention of the ATM in 1967 for the automation of bank-teller operations. Then the customer support in branches started to migrate to telephone banking, followed by the smartphone era that changed the approach of banks in dealing with customers.

Mobile technologies have significantly affected the financial services industry, forcing institutional players to tailor their businesses to survive in the mobile-first environment. Nowadays, the progress of customer service and the speed of its change are very fast.

Customer experience in banking is now becoming one of the most important, and this approach is going to increase. New policies and services must be customer-centric, with a greater level of convenience. Otherwise, there are fewer chances to attract or retain the audience.

According to the 2016 Edelman Trust Barometer Report, customers that trust businesses are more likely to buy their products or services, and recommend them to friends and family.

Many banks focus mainly on their website design, functionality, etc. but usually forget about the importance of customer experience. Some companies are focusing so much on their products, they forget about their customers. If you want to grow, it must change.

Many reports show that millennials are disappointed with the level of bank services and are less faithful customers. However, at the same time, they are more willing to use new technologies. It’s all about customer’s trust. FinTech companies still have work to do and to make customers trust them the same way they trust banks.

 

Ways to deliver good CX in banking

With new technologies and new ways to engage in transforming the way of customer experience in banking. A consumer’s satisfaction is becoming more dependent on the quality of engagement than on the differentiation of products and services. Customers expect interactions with their bank to be based on insight built over time, with the timeliness, personalization, and contextuality of engagement becoming paramount. Not to be forgotten in this equation is the increased importance of trust and security as more data is collected on each customer. Let’s explore some methods to deliver a good customer experience in Banking.

 

Proactive engagement for improved financial management

With the combination of increased data, advanced analytics, and expanded channel opportunities, banks and fintech will have a greatly expanded array of “moments of truth” to engage with consumers, in real-time, to assist with the management of financial relationships. Beyond next-best-action opportunities, banks will be able to deliver proactive insights that can help consumers avoid financial pitfalls or take advantage of opportunities faster than ever before.

Deploying messages on a mobile banking app or through SMS capabilities, banks, and fintech businesses can leverage past behaviors and transactions to provide intelligent recommendations in context. At a time when privacy and data security is of utmost importance, delivering this form of insight to the customer will form the basis for a value exchange the customer will depend on. Eventually, this will positively impact customer satisfaction and loyalty.

 

Hyper-personalization at scale

Delivering personalized experiences is not new to the banking industry. It has been the foundation of most direct and digital marketing activities for decades.

Having said that, today’s consumer wants more. According to Salesforce, 62% of consumers expect companies to adapt based on their actions or behaviors. The same study found that only 47% of consumers believe they are receiving this level of personalization today.

The difference between the marketing of as little as a few years ago and today is that individualized experiences can now use customer data to remove noise from experiences, increasing relevance and speeding customer access to desired functionality and content. This can increase the emotional engagement of customers leading to increased opportunities and revenues.

 

Seamless omnichannel experiences

Customers want to believe they are unique and important to their banks. They don’t want to be “forced” to use a specific channel simply because it is easier for their bank. They want their banks to allow them to select their path to purchase and ongoing interaction, without a difference in the level of service received. While omnichannel strategies have been discussed for more than a decade, delivering a seamless experience will be a requisite for success in 2020.

For most financial institutions, processes and technologies will need to change to provide a consistent experience across channels and between departments for consumers. Measurement of engagement during the entire customer journey will be required to ensure the impact of your efforts is optimized.

 

‘Humanized’ digital

The power of artificial intelligence (AI) continues to accelerate, with the ability to access and analyze data, improve processes, and recommend actions improving each day. AI increases the ability to personalize and contextualize interactions making them feel more “human” without humans being used. There is no match for true human interaction.

In some instances, banks will bring humans back into the engagement process, providing access via digital channels. Far beyond a chatbot, human interaction will be accessible on a highly personalized basis, with specialists being available “on-call” without the specialist ever needing to leave their office.

In another deployment of human aspects to digital, voice device interactions will begin to assume the “personality” of the bank or financial institution. From distinctive voices (not Siri or Alexa) to ways of dealing with requests, these interactions will continue to improve over time as they learn accents, pronunciations, etc.

 

Transparency, security, and trust as CX Tools

All of the customer experience tools in banking won’t matter if the consumer doesn’t trust how you will value their identity, protect their data, and be forthright in their interactions. In other words, they want to know that you will always be engaged on their behalf.

More than ever, the customer wants complete transparency about how their data will be used. They also want to have robust security around their data, including biometrics. If there are privacy concerns with your organization, trust is eroded and the customer experience will take a hit.

More than two-thirds of companies now compete primarily based on customer experience – up from only 36% a decade ago, according to Gartner.

 

To succeed, financial institutions will not only need to invest in the major components of customer experience but also in collecting and analyzing customer feedback across the entire customer journey.

Beyond knowing your customers, organizations will need to use the knowledge acquired to personalize each interaction, provide seamless experiences across channels, humanize digital engagements, and improve trust on an ongoing basis.

 

Outsource your CX initiatives to industry experts

As banks fight against one another for profit margins and market share, the more aggressive are finding that areas once deemed in-house responsibilities can be sent to capable third parties.

Regulatory compliance is ripe for more offshoring, and a 2016 Research and Markets report forecasted that the global regulatory affairs outsourcing market will eclipse $5 billion by 2022. That represents massive growth from the $1.9 billion, billed in 2014, per the study.

Outsourcing enables banks and fintech to improve operational performance, vastly improve speed, reduce operational risk, and increase efficiency through better consolidating and centralizing functions. Banks that strive to keep everything in-house typically end up developing a series of vertically integrated silos that result in extensive duplication and redundancy across businesses and markets.

Not only do these duplicated structures and inflexible services generate needlessly high costs, but they also reduce flexibility and damage the quality of service through obvious inconsistencies. That’s why banks should be avoiding these silo traps at all costs – and turning to outsource customer experience instead.

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