Customer experience is usually at the top of any financial institution’s priority list, yet it still remains a kind of amorphous, undefined notion. That’s a serious impediment, because in a world where many banking products are commoditized, customer experience can be a real differentiator.
Banks and credit unions that succeed in creating a customer-centric culture are 60% more profitable than those not focused on it, according to BAI. For the rest, it’s critical to understand what consumers want from a banking experience and deliver it to them. Knowing what they want is not a one-and-done exercise, of course. And there are variables within markets and particular market segments.
So any list of customer experience trends will never be definitive. Even so, it’s essential to review the priorities heading into a new year. Going forward, some of the biggest CX issues will be around hyper personalization, enabling financial wellness and striking a proper balance between digital and in-person service.
Here then is a compilation of five customer experience trends banks and credit unions need to be prepared for in 2022.
1. Focus on the Human Connection
Many (though not all) financial institutions struggle when it comes to customer satisfaction. Financial services is typically one of the lower ranked industries in customer satisfaction surveys. Data from the American Customer Satisfaction Index showed satisfaction with banks’ flattening in 2021 after falling steadily for the three previous years. Credit unions came in lower than banks, continuing a four-year slide.
Work to Do:
Contact centers have a high correlation with customer experience, yet often rank lowest in customer satisfaction among all bank channels.
Many banks and credit unions have put a focus on digital capabilities in order to improve the customer experience and thus, customer satisfaction. That was an essential step and shouldn’t be neglected. However, institutions shouldn’t forget about the human touch. Specifically, contact centers. Deloitte found in 2019 that customer satisfaction with contact centers was closely linked to overall customer satisfaction with financial institutions. The Covid experience likely heightened that connection as more people turned to contact centers for non-routine issues.
The consulting firm notes that, “satisfaction with contact centers and branches influences customers’ overall satisfaction twice as much as satisfaction with digital channels.” However, Deloitte also added that that customer satisfaction with contact centers is the lowest among all bank channels.
So it seems that improving contact centers will help improve the customer experience overall. Rana Gujral, CEO of Behavioral Signals, says in a Forbes blog that customers more often than not resort to calling contact centers, in the hope of speaking with a human representative to solve difficult problems that affect them the most and that can cause them the greatest damage.
“This situates the contact center as the first line of defense,” he states, “perfectly positioned for banks and financial institutions to indeed provide excellent customer service, which will lead to increased customer satisfaction rates.”
This gives traditional institutions a potential advantage over most fintechs and neobanks — and even Amazon — where it’s next to impossible, or very difficult, to reach a live human. “Potential” because the contact center experience has to meet the expectations of consumers both in terms of quick response and for agents that have access to the same data the consumer has on his or her phone.
The same applies to the branch experience. With most routine transactions shifting to digital, it’s vital that when customers reach out by text, chat, call, or in-person with more complex issues that the staff and the technology backing them up match consumers’ expectations.
2. Goodbye Customer Experience. Hello Customer Science
Banks and credit unions often talk about improving the customer experience, but perhaps the real issue is that the notion of customer experience needs to evolve. As channels become more integrated and what it means to interact with banks changes, so too does customer experience need to change with it.
That’s the opinion of several customer experience experts speaking on a panel hosted by CX firm Beyond Philosophy. The conversation centered around transitioning customer experience to customer science.
“Customer Science combines technology, customer data, and artificial intelligence (AI),” a transcript of the discussion reads. “The significant difference between customer science and customer experience is the behavioral science aspects of it. With all of these factors working together, customer science can help organizations anticipate customers’ needs and build experiences that meet them. Customer science will essentially predict what the customer will do next, not what they say they’re going to do next.”
Ultimately, customer experience is about improving customer’s lives and creating value. By embracing customer science principles, and anticipating customer needs and meeting them, financial institutions can have a material impact on people’s lives.
3. Enabling Financial Wellness and Improving Trust
For whatever reason, many consumers do not trust their bank or credit union to help them achieve financial wellness. In a 2019 poll from the National Foundation for Credit Counseling, only one quarter of consumers say they would turn to a bank or a credit union for financial education, down from 32% the previous year.
Meanwhile, just 29% of consumers trusted their banking provider to look after their long-term financial well being in 2020, compared to 43% two years before that, according to Accenture.
Here For You:
The link between financial wellness and customer experience has grown more significant as consumers look for help managing their financial lives.
So, a primary way financial institutions can improve the customer experience is by improving customer financial wellness, and the heart of that is providing them with financial advice and actionable insights that help them manage their money better.
“The new era of customer experience in banking carries the requirement of tackling individual customer challenges,” states a Fintechtris article. “Financial service providers must help consumers gain a sustained level of financial well-being in which clients are able to build savings, establish strong credit, create generational wealth and achieve other long-term financial goals.”
4. Community Engagement and Personalization
More and more, fintechs and upstart neobanks are focusing on serving specific communities. This idea of “niche banking” is set to play an even bigger role going forward, and traditional financial institutions should embrace it. Industry analyst Ron Shevlin, of Cornerstone Advisors, has noted that many challenger banks have focused on specific market segments with great success.
“Community is no longer synonymous with geography,” Shevlin states, and that many financial institutions “have struggled because they don’t understand which segments of their customer base want which products and services.”
While the idea of niche banking is commonly associated with fintechs, it’s something larger banks can get involved with as well. KeyBank, for example, operates a niche bank called Laurel Road targeted towards a national “community” of dentists and medical doctors.
“The niche model of banking is inherently customer-first, and financial institutions can only put their customers first if they truly know and engage with them,” says Jeffery Kendall, CEO of banking technology provider Nymbus. Offering a bit of practical advice, Kendall says an analysis of market potential and customer behavior should indicate whether a niche is a good one to pursue. More specifically, banks and credit unions can ask:
- How many people are in a particular group with the same patterns of behavior?
- How many of those people can we reach?
- How many do we need to capture to be profitable?
- What is the longevity of this niche?
Additionally, Agnes Nasso, vice president of TCM Bank, notes that community institutions also need to convey to customers how they are engaged with their local community. Increasingly, consumers are asking how all companies they do business with are affecting positive change. That has become an important element of customer experience.
“Coming out of the pandemic, people are even more focused on how they can help support their community,” Nasso writes in an ICBA article.
5. CX As a Product Itself
In our current world of half-empty grocery store shelves, microchip shortages and supply chain snarls, consumers can no longer simply get anything they want at any time. In fact, Judy Weader, senior analyst at Forrester argues that “the era of instant gratification is over for now.”
“Brands can no longer rely on a plethora of products as their main selling point. Instead, they will have to use CX to differentiate themselves.”
— Judy Weader, Forrester
Weader further states that companies need to maintain the CX improvements they made out of necessity during the Covid crisis. “Companies made many adjustments and accommodations during the pandemic,” she states: “Some as a result of restrictions, some in response to health concerns, and some to make up for economic difficulties. We expect many brands will keep the pandemic-era services that have become popular with customers, due to their profitability and to avoid disappointing their customers.”
For banks and credit unions, this means things like maintaining virtual meeting options, video services and adding more and increasing functionality to digital channels.