How can financial services companies take their customer experience to the next level?
By Arron Westbrook
When looking at customer experience in the financial services sector today, it is tempting to view it in the context of the Coronavirus pandemic and the significant impact this has had on consumer habits around the globe.
Indeed, we will analyse Covid-19 and its effects in this article, but the truth is that the sector has been going through significant changes since well before the pandemic brought about lockdowns and social distancing.
Online-only (and sometimes app-only) challenger banks have been on the scene for nearly a decade – disrupting the sector to capitalise on waning public trust in traditional banks after the global financial crisis of 2008.
The banking establishment has had to respond. And the ones that have done so best have put customer experience front and centre – giving consumers multichannel access to their money, providing better support and advice, as well as seeking to promote their ethical credentials.
These things were important before Coronavirus. But they are crucial now as we move through another phase of disruption.
In the past 18 months consumer habits have changed massively – so too have their expectations and needs when it comes to looking after and spending their money in a world changed by the pandemic.
So how do financial services companies respond to these changes in order to take their customer experience to the next level?
2022: Identify the opportunity
In 2020, the Coronavirus pandemic impacted nearly every part of contemporary life. As lockdowns and other safety measures have been eased, many of us have been keen to revert to the ways we lived before the pandemic, while some changes we made are seen as an improvement on what we knew before.
When it comes to financial services, much of the data we are seeing this year is suggesting that shifts to digital banking are permanent rather than temporary. Research from Plaid found that 90% of US and UK based fintech users plan to use digital banking as much or more after the pandemic. It's a similar story for other digital finance habits too. Whether paying bills or sending money to friends and family – the vast majority of consumers are planning to use fintech as much or more going forward.
Research from Galileo digs down into the demographics of those planning on making the permanent switch to digital. They found that 77% of millennials (aged 23-38) are highly or somewhat likely to switch to a digital-only bank with 72% of Gen Z (18-22) respondents saying the same.
Further data from Epam’s Consumer Banking Report 2021 points to younger consumers being those most likely to prioritise the digital experience. ‘Of all the age groups we surveyed,’ the report states, ‘Gen Z is perhaps the most fearless when it comes to trying new services and experimenting with new ways of saving and investing. They are, after all, highly-discerning digital natives comfortable trying out multiple providers in order to find the ones that best suit them.’
Clearly, the pandemic has prompted many users to try digital channels for the first time, or at least become more familiar with them. And, clearly, the efficiency of the customer experience being offered by fintech, online banking and apps is broadly winning consumers over as we move into 2022.
But banks know there is much more to be done. According to The Economist, most banks expect CX to be the key differentiator between the financial services which succeed and fail in the post-pandemic era. When it comes to winning new customers and retaining existing ones, customer experience will be even more important than the products they offer.
Omnichannel: Engage customers across online and offline – across multiple channels
We know that digital channels have been a lifeline to banking consumers during the pandemic and that many customers are satisfied enough with the CX of these channels to use them on a permanent basis moving forward. But this does not mean that digital channels should simply be replacing traditional offline touchpoints.
The future of customer experience in financial services is omnichannel.
According to AltFi, phone-based customer service and high-street branches still have a big role to play. In their Digital Banking State of the Market Report 2021, they found that 66% of UK consumers agree it is important that they can speak to a customer services representative from their bank over the phone. 57% of respondents still say it’s important that they are able to go to a bank branch for their main account.
When thinking about customer experience in financial services, we need to be mindful not to think of it as a binary: digital experience vs offline experience.
Tomorrow’s omnichannel customer experience must be consistent across channels. It must be led by the customers who use these services. And it must be tailored to them.
Returning to The Economist’s Demanding More report we can see how much of a priority personalisation is for those working in the industry. The document also cites a case study of Israeli digital bank Pepper – a market leader whose goal is to personalise customer experiences down to a “segment of one.”
This seamless personalisation across channels is the key to a winning CX, keeping customers engaged, and retaining that competitive edge in the financial services market of 2022.
Tech: Bring disparate data sources together in a unified customer intelligence platform
Omnichannel touchpoints and personalisation call for data – and lots of it. One of the biggest challenges for financial services in levelling up their CX is to ensure their data is unified and manageable.
Unified customer intelligence platforms like Chattermill help overcome this challenge.
They provide people across the business with a holistic view of users as they interact across customer touchpoints – whether through customer support interactions or customer feedback.
The result for financial services companies is that they are much better equipped to offer experiences for their customers based on what their customers actually say and think in their customer interactions and feedback – rather than making changes based on assumptions.
This can then help financial services companies develop and improve their products and services to deliver what their customers actually want.
This latter point is particularly important. Returning again to Epam’s Consumer Banking Report 2021, the report highlights how younger consumers want diversity in the products and services their banks offer. ‘Gen Z is looking for more than just a current account,’ it states, pointing to investment services, cryptocurrency integration, financial education and money management advice all being sought by those in this age bracket – alongside a fantastic digital experience.
Levelling up: Providing a seamless personalised customer experience with unified data as its foundation
Customer experience is not a new concern for financial services companies. But as we adapt to a world that is part recovering and part living with Covid-19, industry leaders are right to understand that good and bad CX can separate the winners from the losers.
Fintech and digital banking are here to stay. Consumers of all ages are switching to digital channels to interact with their finances, while younger consumers are really driving this adoption – placing a great deal of importance on the digital experience financial brands can offer as they decide to use a new service or product.
Younger customers also signal a future where financial services companies provide more than just the basics.
In simple terms, this might mean diversification of products and services – but financial institutions also need to recognise these as opportunities to offer better, more complete, more supportive experiences too. The levelled up customer experience is one that is consistent across products, services and channels. It also needs supporting consumers at the start of their journey and those already trusting and engaged with the brand.
Good data management is the foundation for this. Unified customer intelligence draws customer data from all the disparate sources of today’s multiple touchpoints into one useful platform. Only then can a customer experience be personalised and tailored to all customers – and only then can it be delivered with the necessary timeliness and agility which is so needed in this increasingly fast-moving sector.