No business today can afford to take their customers for granted. Customer experience has become one of the great differentiators, and leading organisations in the financial sector are already lifting their game.
Which brings us to the UK’s Customer Experience in Financial Services Conference. With solid representation from many of the UK’s banks and building societies, those in attendance gained insights from building societies, specialist lenders and banks, both foreign and retail.
Below are some of the recurring themes that were raised over the two-day conference.
1. Digital first versus digital only
There is no question that customers need to be driven towards digital banking. It’s the only way financial institutions (FIs) can hope to iron out the friction in customer journeys, speed up onboarding and application times, and reduce the cost to serve.
However, we’ll always need the human element, a point we saw reinforced at the Banking Transformation Summit earlier this year. Self-service is the end game for many customer requests, but not all. And that’s because customers need to trust the institution they bank with; they want to identify with the organisation that holds their mortgage or takes their salary every month. Often a personal touch is required to achieve this.
There is, even in 2023, a place for face-to-face interactions through branch networks, primarily in building societies and other member-owned banks which are community driven, serving local customers and older demographics. Running branches is expensive and can steal budget away from other projects. If building societies want to rein in those costs, they need to help their members on the journey to digital. They also need to pivot if they want to appeal to a younger demographic.
It’s never one or the other, digital and human-to-human channels will need to co-exist and complement each other. Chatbots are a good example: the chatbot gathers the information, then hands it over for human intervention.
So, how does an FI figure out the perfect digital-to-human interaction ratio? That starts with mapping out the whole customer journey, deciding which interactions require human intervention and which can be streamlined through technology. It’s also about analysing how to personalise the digital experience, demonstrating to the customer that the FI is not just forcing them down a path for their own self-interest.
2. Consumer duty and CX
Financial services is one of the most regulated industries in the world. The Financial Conduct Authority (FCA) has set the bar high when it comes to banks’ treatment of their customers. FIs must perform a balancing act between meeting customer expectations and adhering to regulatory compliance.
The FCA’s Consumer Duty is about ensuring FIs play fair, deliver good outcomes for retail customers and prioritise vulnerable customers. With the deadline for applying this Duty to new and existing products having just come into play, banks and FIs need to make sure they’re compliant. Their consumers will need to be receiving communications they can understand, have access to products and services that meet their needs and offer fair value, and be able to receive the customer support they need, when they need it.
Consumer Duty now requires FIs to reduce channel shift friction, i.e., allow the customer to choose the most appropriate or preferred channel. They must proactively contact customers with important information, improve their complaints process and reduce effort for the customer. The good news is that digital banking solutions can support FIs in meeting these requirements.
3. Consumer data
All FIs should be exploiting their existing customer data for improving customer experiences.
Data can help FIs shape strategy, develop products, analyse customer behaviour for segmentation purposes, target customers and personalise marketing messages. Data is essential for detecting and preventing fraud and lowering investment risks. It can also help organisations identify opportunities for upselling and cross-selling.
All of these opportunities should be viewed through the customer experience lens, with expediency measured against protecting customers’ privacy and minimising pain points.
4. EX is critical for CX
"If you look after your staff, they'll look after your customers."
Richard Branson
Staff have a huge part to play in CX. In businessinsider.com, entrepreneur Richard Branson writes about the scenario where an unhappy customer has their problem handled quickly. In his many years of business experience, he has seen time and again how those customers effectively end up being more loyal than if they’d never had a problem at all.
Numerous studies have shown that companies committed to ensuring their employees are engaged outperform their competition. If people are happy in their work, it inspires and empowers them to give better service to customers.
Technology can be invaluable here. Automated solutions free up time and resources so employees can serve customers better rather than having their days filled with repetitive tasks. It leads to less frustration, and staff know they are working on tasks that add value and boost motivation.
But new technology, of itself, isn’t always truly innovative, and it’s not always the antidote to employee frustration. If you are introducing new technology, you must first look holistically across the business. You need to ensure it will not just end up being another task for employees to grapple with. It needs to solve an existing pain or problem.
Bearing in mind, innovation is not about doing something or making something new, it’s about stopping doing something that’s old and doing repetitive tasks, for employees, is really getting old.
5. Artificial Intelligence
It’s interesting to note that when the conference audience was polled in a panel session titled ‘Revolutionising financial services through technology and innovation’, 57% said they were planning to use AI.
32% were concerned about how it would impact their business and 41% said having the skills to use AI effectively was one of their major challenges. Certainly many smaller banks and building societies don’t have the expertise in-house to implement AI-driven solutions, something we had confirmed for us at the Building Societies Annual Conference 2023 (BSA).
It is important that FIs look at where AI and ML can enhance and improve processes for better customer experience. How might you use chatbots, facial and voice recognition, or hyper personalisation?
Of course with any technology that relies on data, organisations need infrastructure in place to ensure data governance is adhered to if the data quality isn’t there, if the data isn’t used in the right way issues will arise.
According to McKinsey & Company, companies that are leaders of customer experience (CX) achieved more than double the revenue growth of “CX laggards” between 2016 and 2021.
At the conference, we had some competing research from Forrester quoted, which claims CX leaders have 5x the revenue growth of their competitors! For financial institutions (FIs), those these statistics are a big wake-up call.
Talk to Sandstone Technology about how digital banking solutions can transform experiences for your customers using a combination of AI, ML, automation and Cloud.
Sources:
3. https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/the-value-of-getting-personalization-right-or-wrong-is-multiplying#:~:text=From%20web%20to%20mobile%20and%20in-person%20interactions%2C%20consumers,76%20percent%20get%20frustrated%20when%20this%20doesn%E2%80%99t%20happen.
Published July 2023
