Should banks think more about customer experience?

The focus on customer experience in financial services has never been so intense, yet delivering on the demands and expectations of customers is easier said than done. Story by Randolph McFarlane.

The focus on customer experience in financial services has never been so intense. Yet, delivering on the increasing demands and expectations of customers is easier said than done. Are you ready to take the next step?

Within the next three years, customer experience is predicted to overtake price and product as a key brand differentiator, according to Dan Latimore, senior vice president at Celent Consulting. Let’s look at why.

The millennials generation – those born since the early 1980s – are maturing and gaining wealth, and will soon form banking’s core customer base. Customers from this generation know what they want, and will simply walk away if they’re not happy. In fact, one in three millennials is open to switching banks within the next 90 days, according to the Millennial Disruption Index. Banks cannot afford to ignore their demands.

Then, if we look at the next generation down the line – Gen Z, defined as today’s 18-21-year-olds – many of them are already considering whether they actually need traditional banks at all. Accenture’s 2017 Financial Services Global Distribution & Marketing Consumer Study found that 31% of consumers would consider purchasing banking services from an online provider, such as Google or Amazon, and this number rises to 41% for Gen Z. Banks risk losing their customer base altogether in the future if they don’t act swiftly.

While addressing these shifts in consumer behaviors and expectations is an imperative, it’s not going to be easy. Delivering an exceptional digital customer journey requires changes to systems and operations for legacy organizations that not only have complex systems, but are often set in their ways. Added to this, banks have to contend with high levels of regulation within the financial sector.

Understanding customers’ day-to-day digital experiences

The challenge banks face may look immense, but they can’t afford to ignore it. There are some simple steps they can take to help them along.

Delivering on customer expectations requires a broad understanding of what customers are experiencing in their day-to-day digital lives. Explore how industries outside of the financial sector are taking advantage of digital to drive a whole new level of customer experience.

Take a look at Amazon, Google, Facebook and the other digital giants. Their services are all quick, easy to use and personal, and connected across a variety of channels. Then there’s Uber. Uber’s customers never have to provide their account or location details, since an intelligent app works them out automatically using whatever contextual information is available.

Banks need to make their services as easy to use as all of the above. More than that, they also need to make it easy for their customers to communicate with them, wherever and whenever they need to. And by keeping an eye out for any new game-changers delivered by any of these digital companies that their customers interact with daily, they can stay ahead of the curve. After all, these companies will shape bank customers’ future expectations.

Keep a list of digital must-haves

As you gain an understanding of your customers’ broader digital experiences, you’ll be able to draw up a list of things you must include within your own digital financial solutions. While this list will evolve over time, here are a few suggestions to get you started:

  • Make it personal: Understand who your customer is and what their needs are, so you can really personalize your interaction with them.
  • Be proactive: Don’t always wait for the customer to initiate the interaction. Predict and act on your customers’ needs before they even realize what these are.
  • Be relevant: Use any contextual information available to offer your customers services and advice ‘in the moment’, when they need it the most.
  • Make them feel special: Use loyalty and bonus schemes to deliver the little things that make customers feel valued.
  • Ensure you’re always there: Provide a way for your customers to communicate with you any time of day or night, every day of the year.
  • Keep it simple: Remove any unnecessary steps and friction that will only have a negative impact on your customers’ experience.

If this list looks overwhelming, consider what you already have available to you to help deliver it:

  1. You already have a wealth of customer data, within your own systems and through your partners. By collating this information and analyzing it, you will gain a better understanding of your customers’ needs, desires and behaviors.
  2. Social media is widely available and provides a perfect medium for anytime, one-to-one interactions. One US bank that has provided its customers with a private Twitter-like feed to get in touch has seen a 10% increase in applications completed, while applications are being completed 40% faster. In addition, the feed means it’s now digitally connected to 88% of student loan applicants, with whom it can instigate proactive dialogs at the appropriate time.

Make customer experience a top priority. Give it an owner and the C-level leadership it merits. After all, it’s fast becoming the key differentiator that will see you either gain or lose digital-savvy customers in the coming years.

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