With the landscape shifting rapidly for the financial services industry – thanks to the rise of digital and changing consumer expectations – being able to provide a strong customer experience (CX) can be a key differentiator that helps banks stand out in a crowded and increasingly competitive market.
But this is easier said than done. For many banks, CX is taking a backseat to other issues – particularly among smaller financial institutions, with fewer than two out of five banks having a formal plan in place for improving these activities.
This is the finding of a recent report, Improving the Customer Experience in Banking, from The Financial Brand and Deluxe. It noted that often, “the objective of delivering a positive customer experience has become secondary to other bank priorities, resulting in a transactional banking relationship for the customer”.
So what can banks do to change this and ensure that customer experience is at the heart of their operations? Here are five key areas that banks need to prioritize.
1. Improve digital engagement
Digital is now a key channel for any bank, yet many FIs remain focused on cutting costs in this area rather than factors such as boosting user experience. However, the effective use of digital channels drives customer satisfaction, something that’s shown by the fact that, for the first time, the biggest banks score more highly for satisfaction than smaller community providers – in large part because they can afford to invest in stronger digital initiatives.
2. Take advantage of analytics
Personalization is a key factor in offering a differentiated CX today. But achieving this requires a deep understanding of big data analytics and machine learning to help truly understand customers. Yet this is also the most challenging CX project, with almost a fifth of organizations (19 percent) surveyed for the study rating this as their biggest issue. However, developing capabilities in this area can reap major rewards, so banks must persevere.
3. Formalize customer experience programs
Even though only three percent of banks claim CX is not a focus for them, many activities in this area aren’t well coordinated, and this is a particular issue for smaller banks. While The Financial Brand’s report found 55 percent of large national banks in the US, for example, have a formal CX program, this drops to just 16 percent for community banks. A more organized strategy can therefore help these banks better understand where they should be focusing their efforts.
4. Make sales activities more proactive
The key task for many banks when it comes to boosting CX is to turn transactional interactions into advisory ones that can offer a more personal connection with consumers. Sales activities and advisory interactions are ideal opportunities to do this, if banks can leverage the data they have on customers and make good recommendations that are tailored and do not feel like an overt sales pitch.
5. Keep consumers engaged throughout their journey
Engaged customers tend to be happy customers – as well as being more receptive to sales and marketing pitches. And this is something that needs to be focused on throughout every stage of the customer journey, from their first interaction with a bank, through the account opening phase to ongoing support. The days of choosing a bank for life are long gone, and if customers feel they’ve been abandoned once an FI has their business, they won’t stick around. Surprisingly, only 21 percent of banks say retention is the biggest objective of their CX activities – a figure that must improve if customer experience efforts are to be effective.