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Banking Needs To Put Emotion Into Customer Experience

Customer experience in banking has been relegated to a subservient position, responsible for 'ease of use' and measured by questionable customer satisfaction scores. Lost in the translation is the emotional ties consumers have with their money and how banking can help with needs.

There is more to a positive consumer experience in banking than the time it takes to do a transaction or the design of a mobile app. In a rush to innovate and improve channel delivery, most banks and credit unions have forgotten to take the time to think of how money and feelings are entwined.

Subscribe TodayAt what point did the banking industry forget that people have strong emotions about their money? Today, consumers can feel this glaring oversight at every level of their interaction with institutions that build products with no insight, or even consideration, as to how the products emotionally resonate with consumers.

Unlike other consumer product industries, most financial institutions don’t have teams of behavioral psychologists pouring over slides of human expressions around the services offered. The industry forgets about the way people react to different financial situations.

Lit up eyes and a gaping mouth? This must be the expression of someone who came into an unexpected monetary windfall. They’re elated, with questions around what they should do next. Narrowed eyes, a staunch frown and clenched jaws? This must be the anxiety around an unexpected bill, defaulting on a loan or needing to borrow from an aging parent.

Not only are these teams non-existent at most financial organizations, but this type kind of thinking is missing in all but a select few progressive institutions internationally.

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Feelings Are Scary, Numbers Are Safe

Maybe the banking industry is too busy with other priorities to think about consumer emotions. Between the basic ‘numbers of banking’, compliance, competition, innovation and the unexpected surprise of the day, the industry is too busy.

We adjust APRs, we invest hundreds of millions, we count our clients (sometimes we do this twice), we agonize over the latest regulation and we scrutinize any of the four magic quadrants for answers that will provide marketplace success.

And while the industry invests significant amounts of money on consumer satisfaction ratings, somewhere deep down we know they aren’t truly happy. The expectations in banking are set rather low in the consumer’s mind, so ‘satisfaction’ may actually mean ‘non-dramatically-dissatisfied.’ And since few spend time finding the direct correlation between genuine positive emotion and dollar signs, we aren’t too sure we care about the distinction.

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Fintech Firms Fill The Emotional Void

“We’re committed to helping college students succeed in their academic journey. That means we can’t get away with products CIOs love to buy … we need to build products students love to use,” stated John Kolko from Blackboard. While is a different industry, his statement summarizes how his company arrived at the understanding that the end consumer matters deeply from an emotional point of view.

There are financial firms that have committed to ‘Emotional Banking’ and have succeeded in the marketplace. Meniga has won numerous awards for their user experience that goes beyond clicks and graphs. A relatively new start-up, Hip Pocket, has built their entire solution around the consumer challenges of borrowing. And Simple was established by non-bankers frustrated by the way financial institutions treated customers and have identified that thinking about how the user ‘feels’ pays off.

Anyone who’s ever been to a Finovate event, where new Fintech firms show their products, has felt the magical moment when the entire audience connects with something they see on stage that makes them feel emotionally positive. These firms, and other new start-ups are doing the necessary legwork to build products and services that resonate with the emotional part of banking. Are legacy institutions prepared to think under these terms?

UX Lost Its Religion

Some would claim that this is the job of user experience (UX) teams in banks around the world. Unfortunately, UX as a discipline, seems to have had trouble staying true to its ‘make it better for people’ values recently.

In some cases, the efforts of these teams have gotten marginalized as the poor creative, slightly kooky cousin of more reputable departments that keep the cogs running. In other instances, the UX conversation seems to have veered off dangerously, sometimes exclusively, into conversations on how to optimise for the umpteenth device in a way that allows the user to see the full menu.

What the banking industry needs to do, more than anything, is to allow the UX teams to return to the roots of making sure we stop thinking features and again think about consumers’ emotional relationship with their money. In fact, it should be the job of everyone in the banking industry at this time of heightened competition.

Do We Really Need To Talk About Needs

There are some in the industry who probably believe we spend enough time talking about ‘needs’ already. Everyone in banking is likely familiar with Maslow’s Hierarchy of Needs. At least three (and debatably all) of the levels are intrinsically connected to money.

Maslow's_hierarchy_of_needs

People don’t ‘need’ products. They don’t have a checking or current account ‘need’. Consumers have Physiological and Safety needs that these products satisfy. Consumers also don’t have loan ‘needs’, but instead have Belonging, Esteem and Self Actualization needs that a loan would satisfy.

When did the banking industry decide that a consumers’ emotional experience is secondary to the devices it supports, the channels they promote and the payments they process? Would we go back to it once all channels were digitized enough?

What’s more puzzling is that emotional banking isn’t even the most complicated of exercises. The way we build products around consumer emotions should have already been in place, with the discussion revolving around how new technology can enhance the emotional experience. By now, we should have a generation of bankers who could discuss the proportional relationship between levels of anxiety and elapsed time that a customer experiences when unable to transfer money, depending on their respective segment and life circumstances.

If we had done our collective homework on how consumers truly feel, the Business Prevention Department (™ J.P. Nicols) would become the Business Enablement Department because Legal, Compliance, Procurement and Operations would already understand that splitting a bill is a Money Fact of Life ™.

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The Rise Of The Empathetic Banker

There are multiple theories excusing the lapse above. They range from the rush to build physical and digital services to the fact that banking traditionally feels mandated to see themselves as in charge of numbers and safety, or guardians of unquestioned trust as opposed to builders of trust.

One thing is clear – bankers need to do a much better job thinking about themselves as a consumer. Bankers imperatively need to analyse how they feel themselves, and translate those feelings to a desire for digging into others’ relationship with their money as well.

As an industry, we need to roll up our sleeves – we need to talk about the consumer attachment to savings, investments, day-to-day money, and how to move towards Invisible Banking. We have to think about how money impacts anxiety, joy, and goals.

How do we encourage consumers to embrace good money habits and get them out of bad ones? How do we make consumer’s lives richer and more connected to us … emotionally? How can we delight them, answer their emotional money needs and, most importantly, how can we become invisible empowerers of Money Moments ™?

Emotional Experience (EX) is the next step after UX. While the emotional connection should have logically superseded UX, this is not so in banking. In fact, understanding, and responding to, the consumer’s EX should precede the building and delivering of products, the development of customer service units and even the building of our core systems. But it is not too late.

It is time to become more empathetic and dig deep into our customer’s hierarchy of needs and build an Emotional Experience that can be a differentiator in the marketplace. It will help us compete against new entrants (who are building products with EX as the foundation) and will guide future business initiatives.

We should get excited about the journey ahead, discovering how to make EX bigger than all the other acronyms banking has been meaninglessly throwing at a consumers. If we were to succeed, having the consumers’ feelings about money validated will translate into more tangible results on the bottom line for the successful organisations than anything we have done in banking over the past several years.

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Comments

  1. Mark Middlebrook says:

    Great article. I totally agree that emotion needs to make its return to UX and the customer experience.

  2. Great Job Duena. What if I’m an emotional wreck, does that help?

    Just kidding…

    I think experience design needs to recognize money is an emotional experience for customers, and that can be powerful as a connection with a brand

  3. “One thing is clear – bankers need to do a much better job thinking about themselves as a consumer.”

    Increasingly, it seems to me that most of the problems that banks face could be solved if bankers fully absorbed this quote.

    Fantastic article, Duena!

  4. Empathy is required for banks who want to tell digital stories that sell.

    This will be a huge shift in thinking as banks position themselves as the hero in the stories they tell. Instead of taking the role of the hero, banks should embrace the role of the helpful guide who leads consumers to success.

    Because without a guide, there can be no hero.

    And without a hero, there can be no story.

  5. Duena, great article! @James: you’re spot on. I’ve been planning to write about this for a while – the financial industry seems to have customer relationships backwards.

    After all, where else you need to ‘apply’ for a product, ‘make a proposal’ to an insurance provider and fill out forms to do anything? Applying makes sense if something’s so special and exclusive, but how on Earth a current account is any of that?

  6. The rise of the empathetic banker. I used to be an empathetic banker, thinking of nothing but how to help my customers. Then I started actually dealing with the customers. My empathy drained faster than excitement for a movie directed by M. Night Shamalyan. I wish I could say that was a joke, but it’s not. There’s only so much empathy I can have after years of listening to grown men try to bully female teenage tellers into cashing other people’s checks for them.

    I’m curious as to how the EX can be implemented. All the customers I deal with seem to have the same thoughts and feelings about their money: Basic account, no fees, free everything, and how dare we charge them a fee. But even beyond that, I am curious on how to tap into that emotional response. Personalization? Less barriers to moving money around? Feeling that there’s someone there to give advice at the push of a button or a phone call away? The main psychological feelings one has toward their money as far as I can tell revolve around how much of it someone has, how much of it someone has to pay, and whether more money will be coming in regularly. I’m curious as what you suggest banks do to improve (or implement, as it seems) the emotional experience. Especially as banking moves toward mobile as the main delivery channel and Millennials who value the personal interaction less than their seniors did grow into the primary client base.

    Sincerely,
    ARB–Angry Retail Banker

  7. @ARB – your perspective is perfectly understandable based on your experience. But I would argue that the reason customers tend to have those expectations and behave the way you describe is at least in part due to the very factors this article highlights — that the financial services industry hasn’t done a good enough job in connecting with customers “where they live,” which is primarily in an emotional dimension. And facilitating an emotional connection needs to be done both authentically and across the enterprise – all the way from brand strategy to customer service. Neuroscience has shown us that humans make decisions in the emotional part of the brain no matter how much we might justify our choices with logic. Banks would do well to orient their services and operations to that fact.

  8. @Russell Granger

    My experiences with–and observations of–the general public come not just from retail banking, but retail in general (as someone who used to work in food service and who is frequently a customer.

    But enough about that. I’m actually pretty intrigued by the concept of designing bank products around otional responses. I’m just wondering how you, or Duena Blomstrom, envision it being implemented. My comment about customers’ only emotion being “Give me basic stuff for FREE FREE FREE” may only have been half serious, but it was also only half joking. When people’s main emotional response to their money revolves around how much they have, I wonder what sort of bank product can tap into and capitalize on that connection.

    Sincerely,
    ARB–Angry Retail Banker

  9. Megan McGlothlen says:

    Duena, your observation that consumer’s emotional experience has to be prioritized in banking is particularly intriguing. When consumers feel valued and understood, they will initiate more credit decisioning, apply for more loans and most importantly, trust their financial institution (FI). I would add that an FI’s culture and customer experience also depends upon a collaborative relationship with regulators. FIs must start working in tandem with regulators to help them understand how banking decisions are made, ultimately creating a more engaging customer experience. When banking culture fosters a positive emotional experience while meeting business goals FIs will see a growth in profit, consumer retention and trust, and outperform their competition. (Read more here.)

  10. Duena,
    Thank you for a thought-provoking article. My take-away from ARB comments is along the lines; How do I do this “empathy thing” so I can make more money? I may consider changing to a new way of thinking for my customers but only if they will pay for it.

    After 30 years I have found those who have been successful in the highly regulated, highly competitive, retail banking market have narrowed their thinking to only those ideas that produce profits, competitive parity, or regulatory compliance. New ideas are measured against two primary criteria; 1) how much profit will it generate?, and/or 2) are we being forced by the competition or regulators? There is nothing wrong with that way of thinking, it has worked for the bank for decades. That is why change will be forced on banks from outside rather than from the inside.

  11. @Kevin

    If that is your takeaway from my comment, then that is your prerogative. But with all due respect, I can’t help but wonder if you read MY comment or someone else’s, because I never came close to implying what you interpreted.

    I made my interest in emotional/empathetic banking known while also making it clear that I have doubts. Duena states, and I agree, that people have very strong emotional ties to their money. Elation at the “unexpected monetary windfall” or anxiety over “defaulting on a loan”.

    But banks don’t sell money. They sell accounts and services. Banks can’t provide that unexpected monetary windfall, only a place to put it and advice on what to do with it. So then, I go back to the question I asked before: How does this get implemented?

    I’ve checked out the link to Simple Bank that Duena provided. Pretty cool bank with no maintenance or overdraft fees, though they also have limited services and make money by latching into Bancorp Bank. Hey, if it works, I’m all for it. But I’m looking for the emotional aspect–the facilitation of their customers’ emotional connection with their money–and I’m not seeing it. Is it their mobile app’s Safe-To-Spend feature? That’s a pretty cool feature (I actually am now a big fan of the idea), but nothing more than that. And the emotional experience has to go beyond “cool features”. The fact that the hypothetical customer in their screenshot is saving for “A boss tux” instead of “Tuxedo”? Or that you can include hashtags in the memos of your transfers? Again, cool features and marketing towards college kids (because every 19 year old just calls everything “a boss this” and “a sick that”). Friendly customer service? EVERY bank boasts that. Chase boasts that. Simple looks awesome, but I’m not seeing the emotional experience.

    So how does this actually get implemented? According to Duena’s article from her site that she linked, send EVERYBODY to what are essentially Psychology 101 workshops. Great, a couple days away from the branches are something I can definitely get behind. But how does sending the teller staff to these psych workshops actually help IMPLEMENT the emotional experience? What are the tellers’ supposed to do to provide the emotional experience? Everyone keeps talking about how great an idea this is; but no one seems to have any idea (or interest?) in how to actually go about implementing this emotional experience.

    As for the Emotional or Empathetic Banker, I’m not really sure what that’s supposed to entail or what it’s supposed to imply about the current state of things. Are all current bankers emotionless robots who only see profit margins and don’t care about our customers as humans? Because, no matter what bank or credit union you go to, you’re going to have a-holes and you’re going to have saints. I’ve worked with both. I’ve dealt with both. I’ve been CALLED both! So the emotionless banker is a false stereotype that shouldn’t really be at the heart of bank strategy.

    What does being an empathetic banker entail? Or an emotional banker? How to we tap into the customer’s emotional connection to their money? I assume no one’s looking for me to break down and cry every time someone gets hit with an overdraft fee. So how does the Emotional/Empathetic Banker get implemented? By being patient and understanding? That’s one of the prerequisites to any job in customer service. By “personalizing” each transaction by remembering each customer’s name? Every bank boasts that “customer service”, which is really just hospitality management and soon to be irrelevant as branchless banking and “less branches banking” becomes the norm.

    It’s important to empathize with customers who are going through rough financial times, but unless banks are going to make money itself the product they sell (and I don’t mean loans), then it’s tough to say how the emotional and empathetic banker can help this person. We’re bankers, not grief counselors. And so once again, it comes down to developing products and services that fit their financial needs. But again, HOW do we tap into their financial emotions? I see a lot of “great idea!” and rah-rahing, but no plan of action outside of a few workshops.

    I’d be genuinely interested to see an action plan as I think it’s a great concept to work from. I just have doubts as to its practicality. The emotional connection is to their money (having a little or a lot, having more coming in, and having debts and expenses), not to their accounts and apps. Banks don’t provide money. They provide accounts and apps.

    One more thing I must address. The implication that I would only be for this if it made me more money and at the customers’ expense. For the first part, fine. Hey, the paycheck is why I’m at the bank. It’s why we ALL do what we do (who here would still show up for work if they were not actually earning something for it). But as for only being for any changes if the customers were being hit with fees, that is absolutely untrue. I know how banking works. Customers don’t necessarily have to be charged fees in order for the bank to make money. And since NOT getting fees would positively affect a customer’s feelings toward the bank, why would I specifically want fees attached to whatever comes with emotional banking?

    Sincerely,
    ARB–Angry Retail Banker

  12. I have several bank checking/savings accounts and here is how I see this discussion about emotional experience (EX). I see these cool print ads, banner ads, and direct mail pieces, and fun ambient marketing ideas from a bank and I think, “Hey, this seems like an awesome place to put my money. I want to be here.”

    And then I sign up for an account. Every other communication from then on is, apparently, written by the legal department. Emails are pages long and intent, not on welcoming me or giving me a truly useful tip, but on making me a “stickier” customer. Pay bills electronically. Sign up for direct deposit. Download the app. Great CD rates. A credit card cross sell. Referring friends. Giving a rating and review. The “fun” marketing seems reserved for acquisition. The special offers are for people who keep saying no to your pitches. And the thank you’s are non-existent.

    If you really want to keep my business, a little more emotional marketing might go a long way. Stop continually try to turn my upside down and empty my pockets. Keep your emails brief, relevant, friendly and concise. (I am looking at them on my mobile.) Thank me, simply, without trying to make me more debit active. Use my data for good, not evil. Give me technology to make me understand my spending, or be even smarter with my money.

    This is what emotional marketing means to me. Your customer. Call off your lawyers and wipe out the legal speak. You can advertise, but not overtise to me. And at least contact me once in a while. You worked too hard to get me to drop me like a hot potato now that you have my business. (A $5 Starbucks gift card for our 1-year anniversary together or a greeting card on my birthday would be nice.)

  13. Thank you for reading and the great comments, everyone.

    Kevin – glad it made you think! That was the whole point of it. I also have to say I wouldn’t hold it against ARB in the least if what he meant was “where’s my $?” – I believe (or even “feel” since I can’t yet prove it) that EX has exponentially the same ROI as UX and every other frame of customer interaction so I am sure there is money to be made from doing the right thing by the consumer.

    “So how does this actually get implemented? According to Duena’s article from her site that she linked, send EVERYBODY to what are essentially Psychology 101 workshops. Great, a couple days away from the branches are something I can definitely get behind. But how does sending the teller staff to these psych workshops actually help IMPLEMENT the emotional experience? What are the tellers’ supposed to do to provide the emotional experience? Everyone keeps talking about how great an idea this is; but no one seems to have any idea (or interest?) in how to actually go about implementing this emotional experience.”

    ARB – some fair comments.

    To address the why there is no more detail on how to do this. Part of it is that this is not a forum for me to advertise my services (which in this case are limited to the two day workshop to sit bankers down and force them to think of people’s feelings about $ but to be frank the “everybody” does not necessarily get all the way to teller staff but the strategy makers and the innovation drivers instead of just the culture changers).

    The other part has to do with how I find the fact that we agree this is important but also agree we don’t know how to react to it to be a good thing. I think it’s really important this is non-prescriptive and open. I have no one path, no one does, we just need to think of this deeply, wonder if it needs support with hard numbers (case in which there is plenty of that in NPS and Satisfaction metrics) and then figure out how serious we can get about this in order to try and publicise it wide and deep inside the bank.

    I have to say I smiled a sad smile at reading the term “implement” – seems the furthers from feelings as we can get but I’m happy to give you my ideal implementation scenario: Step 1: sit down and think about it (i.e. my workshops or those like them for the Culture and Innovation teams). Step 2: decide it’s an important topic (maybe as important as not hurting trees and never printing an email) so include it in the Internal Innovation or Culture Stream so that it reaches the UX guys, the Product guys, the Strategy guys. Step 3: show them the ROI of actually thinking of people’s deep feelings to design any experience, build the business case for delighting consumers (wonder how many times I need to type that before I’ll stop getting goose bumps with the inherit injustice of that having to be) and help them get cross-bank teams led by behaviourists. Step 4: Always ask these people to the table first when you design/imagine/discuss any step in the banking experience. Step 5: Answer deeply human needs by doing so and give consumers what they deserve. Sounds concrete enough?

    To answer your more fun queries no, no one expects you to break down in tears, can’t imagine a scenario in which that would be useful and I suspect neither can you;) but while the 101 psychology may be all old news to you it isn’t to all the teams that discuss the future of the experiences or all this would be a moot point.

    Nancy – so many good points! Simplicity and “keeping it real” are your top two asks it seems and they ought to be so easy to achieve.

  14. Dan Marcondes says:

    Duena,

    I fully agree with you as a user and a UX professional. And I really believe banks would have an everlasting good relationship with their customers if they followed the thoughts you shared, which actually I think translate everybody’s need when it comes to financial matters and the services banks provide.

    My only concern about this is: how can we “sell” this message to banks, that are actually interested in us being in debt? Here in Brazil at least, it’s very interesting to banks that people get into overdrafts. That will enable the bank to charge enormous taxes or – even better (for them) – loans.

    How can we sell that message of a better relationship when it can lead to a better use of the client’s money and ultimately to less loans and less overdrafts?

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