Banking customers expect more than an excellent mix of products and multichannel solutions – they are looking for superior customer experiences that fulfill basic expectations while providing added value. In fact, customer experience is the most common reason for opening and closing accounts, more so than fees, rates, locations and convenience.
At a time when social and digital media enable consumers to immediately share their experiences, customers who have a positive experience will drive the most referrals and be more willing to consolidate their banking needs with a single financial services provider. Alternatively, dissatisfied customers can negatively impact the ability to generate (or keep) customers more than ever.
With new products, new channels and new competitors, the importance of a robust customer experience strategy has never been greater. In the same way that advanced analytics should be used in the acquisition and selling of services to consumers, customer experience strategies should also be personalized as much as possible using the same type of analytics.
Despite an improvement in both trust and satisfaction in the banking industry overall, an increasing number of financial service providers are competing for the same customers. Emerging technology and the increasing use of mobile devices for both banking and payments are making it easier for new entrants to exploit areas of dissatisfaction and underinvestment.
With the cost of acquiring and retaining a customer increasing, the cost of falling behind the competition is extreme. Each customer with a less than satisfactory experience represents a new business opportunity for a competing bank or financial service provider. Therefore, an increasing focus on, and investment in, an improved customer experience is warranted.
In a report by Worldwide Business Research, research findings point out that CX tools of the trade need to be expanded, mobile can’t be ignored and social media could either be a threat or an opportunity depending on how you look at it. The report summary found:
- Financial services are integrating customer experience measurements into organizational KPIs. Customer satisfaction is the #1 KPI for customer experience (CX) professionals within the financial services industry. In 2015, over 70% of those surveyed look to customer satisfaction to determine the performance of CX initiatives. Also cited as key performance indicators were loyalty and engagement, at 37% and 34% respectively. The least cited KPI was profit at 13%.
- Mobile has become one of the most important channels to create a leading edge approach to CX. Mobile is growing in importance for financial services firms as a customer support channel. As a result, 41% of CX professionals now have an active mobile support channel, with 33% planning to develop a mobile support channel for customers.
- Financial services firms require a proactive approach to developing social media as a customer support channel. Currently, 84% of CX professionals in financial services agreed with the statement that social media had become a greater priority in the last year, highlighting a consensus opinion in the industry that a social strategy needs to be developed.
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Measuring Customer Experience
When CX professionals were asked how they measure customer experience results, the vast majority used traditional measures like satisfaction (71%), loyalty (37%) and engagement (34%). While these measures are helpful, they don’t represent the bottom line metrics that senior management may prefer.
Among survey respondents, the three most bottom-line oriented KPIs (revenue, retention and profit) were the lowest survey responses for KPIs of customer experience efforts. By not using more tangible revenue impact measures, it was believed funding for CX programs could be impacted. This is reinforced by the fact that the top three obstacles CX professionals referenced in the research were internal resources (30%), budget (20%), and executive buy-in (19%).
Mobile as a CX Platform
The importance of digital banking and the mobile channel impacts all aspects of financial services today, including delivering a better customer experience. When CX professionals were asked about the integration of delivering customer support via mobile, 41% of those surveyed indicated they already have a mobile support channel while 33% reported that they were planning to develop one.
What was surprising was that 26% of those surveyed were either “not sure” or were not planning on developing a mobile support channel.
According to the research, “One of the challenges with delivering customer support via mobile channels is that financial services companies must deal with the myriad of regulatory and compliance requirements regarding data collection, privacy, usage and disclosures, not to mention the technical challenges with delivering services to the mobile customer touchpoint.”
Priorities and Opportunities for Customer Experience Initiatives
When asked where the rather limited budget for improving customer experience in financial institutions is being spent, the most significant investment was made to improve the customer experience on the website channel. This is not surprising, given that the organization’s website is one of the first lines of defense when a problem occurs. This also explains the emphasis on the branch channel and mobile.
What was a bit surprising was the limited budget allocated to the call center. This may be the result of the call center already being an established, but decreasingly important support channel. Also surprising was the lack of investment in the social media channel, given the increasingly use of this channel by customers with complaints and issues to resolve.
Reflecting changes in channel use, when CX professionals were asked where the greatest opportunity was for improved customer experience, branch opportunities were ranked the lowest, with website improvements and employee development thought to have the greatest potential. Coinciding with the budget allocations, social media was again near the bottom of the list for opportunity as well.
Worldwide Business Research provided the following recommendations for organizations hoping to improve the customer experience.
- Gather data on CX initiatives that make the ROI case for additional investment. As opposed to ‘soft’ KPIs, find measurements that relate to cost savings and revenue enhancement.
- Make mobile the centerpiece of a leading CX strategy.
- Increase the investment in social media customer experience enhancement, reflecting the increasing reliance on this channel by consumers.