In a world where customers have more choices about how they bank than ever before, customer experience (CX) is critically important.
Delivering great customer experience in banking is a complex, multifaceted task. A smooth and efficient online experience; personalized services; and accessible, friendly support are all key to earning customers’ loyalty and trust. Providing these requires a deep understanding of evolving customer needs.
Continuous innovation in this space — not least from digitally native challenger banks — means the customer experience bar is constantly being raised.
“The Challenge of Customer-Centric Banking,” a new FT Longitude report and supported by Genesys, finds the banks that are leading in CX are reaping the rewards in several ways: They’re growing in new and existing customer segments, attracting and retaining staff, and are better able to achieve financial goals and outpace the competition.
But even the leaders are continually working to close an ever-widening customer expectations gap.
Financial services products are better than ever and easier to access. Consumers can check their balances anytime on their smartphones and make a transfer or buy an investment product with a few clicks. But often, it’s not other banks setting the bar for CX — companies such as Amazon and Uber are driving increased customer expectations across nearly every industry.
Consumers expect these experiences to be as straightforward (e.g., no unexpected fees), fast (clearing instantly), and easy (e.g., simple authentication) as it is when shopping with any leading eCommerce company. They expect to be recognized across channels and product lines. Banks have addressed these expectations to varying degrees, but there’s still progress to be made.
Preparing for a Downturn
According to the report, 61% of banking executives say expectations for customer experience are continuing to rise, and nearly half admit they’re struggling to keep up. A recession could widen this gap even further.
While nearly three-quarters (72%) agree that personalized customer services become even more in demand during times of financial crisis, 60% said that a downturn would likely put the brakes on their digital expansion. Ultimately, more than half of executives expect that an economic downturn would degrade the customer experience their bank provides.
In today’s experience economy, banks must find ways to meet those expectations — quickly. As concerns of a recession increase, the pressures to evolve customer experience strategies and integrate the capabilities that deliver personalized, streamlined and digitalized experiences have accelerated.
The challenge many banks face is that innovation takes technology development hours and budget —and both become more constrained in a tough financial environment. Banks must find a way to overcome that obstacle to keep innovating, or risk getting left behind.
Digital Innovation Delivers ROI
The report uncovered three strategic priorities for banks as they look to build customer loyalty and trust long term.
Close the personalization gap. Banking executives say investing in technology for customer understanding and personalization is the most important priority for improving CX. While nearly three-quarters of banking CX leaders (72%) say more personalization leads to greater customer loyalty, over half (54%) believe consumers still see their attempts at personalized interactions to be generic.
Personalization is best addressed by shifting focus from “We know your name and email” to leveraging people and technology for helping customers resolve their specific issue in their preferred channels — quickly and completely on a first interaction. Better yet, it means proactively giving customers assistance before they know they need it.
Connect technology and data. The survey finds that strategies that focus on channels or products rather than on customer journeys and customer data are the greatest barriers to improving CX. In fact, just 4% of the surveyed banks say they offer an omnichannel experience today. Others say omnichannel is a priority but there’s further integration work to do.
Some data silos exist for regulatory reasons, but banks can use a customer experience platform that links available channels and data to track customer journeys and streamline them. Consider wealth management as an example.
A client might buy stock for themselves on their banking app, and then text their financial advisor about the purchase. The next day that client might meet with their advisor via video chat to discuss the state of the market. During this interaction, they receive a trade confirmation via email of their stock purchase the day before. The following day, the client receives an invitation to a webinar on retirement planning.
All these experiences are better for the client, the advisor and the bank if they’re connected as part of a deliberately designed and seamless client experience.
Leverage key differentiators. Banks need to lean into their strengths to build loyalty and trust as the threat of a recession looms. For traditional banks, the survey points to strategies around sustainability and customer intimacy for repositioning their branch networks. Challenger banks are prioritizing digital innovation and redesigning processes around understanding and optimizing customer journeys.
Future branch banking experiences will become more consultative than transactional. Providing richer experiences based on customer needs and preferences will lead banks to remodel branches into financial strategy centers. The result will likely be fewer teller transactions and more personalized coaching and financial advice. Nearly half of banking executives surveyed see a reimaged branch as the greatest opportunity to transform CX in the coming years.
Look Ahead or Pay the Price
Banks face a unique set of market pressures when the risk of a financial downturn coincides with heightened customer and employee demands. In this environment, it’s more important than ever for banks to use connected data and technology to deliver seamless, personalized customer experiences.
Doing so requires continuous innovation that’s focused not only on a bank’s business priorities and strengths, but also on its customers’ expectations. A bank’s short-term and ongoing investments in innovating the customer experience in ways that balance both are what will ensure its long-term success.