The collective rise of the tech giants and challenger banks is placing significant pressure on traditional financial institutions. Disruptive digital savvy ‘newbies’ are designing their entire ethos around simplifying and enriching the customer experience, and anyone slow to respond could find themselves serving as another stark reminder of the pace at which customer loyalties can change.
Essentially, the customer experience (CX) in financial services has reached an impasse. While a whopping 94% of financial services professionals see CX as a key differentiator in their crowded and competitive market1, only 30% of respondents see it as a business challenge that’s prioritised by the board – signalling a worrying disconnect between recognising the importance of CX and bringing it into the spotlight as a critical business imperative.
What’s more, only 13% of professionals indicate that their company takes an integrated, organisational-wide approach to CX. Failure to collectively prioritise customer experience, involve the entire business in its application, and give it a seat on the board is a false economy and represents an unnecessary additional risk during a time of considerable competitive market change.
But encouragingly, many banks and financial institutions are now recognising the need to react in order to fend off the threats of digital disruption posed by fintech start-ups such as Ant Financial, Atom and Monzo, along with large, established businesses like Alibaba, Google and Amazon branching out into financial services. Industry and regulatory experience, together with a history of innovation and deep pockets to invest, will allow many institutions to catch up and leverage the rapidly increasing data-driven interactions with customers to bring new ideas and services to the table.
From top to bottom, and from the outside in
While financial services incumbents still have the majority of customers on their side, many have been slow to transform. Complex and costly legacy IT systems are difficult to adapt and change, and with millions of customers calling or logging-in to access a wide array of services daily, incumbents need to walk a fine balance between change and stability.
Our research shows that around 70% of organisations rely on either non-board level or divisional managers to own separate and disparate customer contact channels. Even more concerning is that nearly 10% of financial services professionals indicate there’s no ownership structure at all for customer experience.
And with only 28% of financial services professionals saying that all employees take accountability for delivering against CX guidelines, there clearly needs to be an improved ownership model of CX in order to ensure everyone is reading from the same book. For example, best practice shows that appointing a single person accountable for the customer experience across the organisation ensures the right structure and processes for delivery are in place across every customer touchpoint, which contributes towards an organisation-wide view of CX and a coherent CX strategy.
What’s more, we believe that CX can only work if it’s constructed from the outside in. A customer experience strategy has to be designed around the customer first, and distributed for organisation-wide buy-in second. This approach is proving the catalyst for disruptive financial services businesses looking to completely revolutionise customer engagement. They’re doing far more than merely revising processes and points of contact – they’re transforming their thinking and entire culture.
Automation, analytics and self-service mean technology is the differentiator
The explosion of automation, data analytics, and self-service solutions is allowing many forward-thinking financial services organisations to build next generations platforms to ensure rich and rewarding digital experiences for their customers. When asked to identify the top three trends being prioritised by their CX team, analytics (44%), digital business transformation (39%), and self-service solutions (36%) were the most common technology changes underway.
Automation, particularly in terms of operational efficiency, is critical for financial services companies looking to not only improve costs, but also to drive increased customer analytics and business intelligence. It’s cyclical; using automation to improve one area will invariably have a positive impact on another. Whether that’s by reducing queues and waiting times in call centres through enhanced interactivity and service accessibility, or providing live-servicing video banking platforms – there’s no doubt the application of automation and advanced analytics is unlocking some real transformative potential.
Nonetheless, research indicates there’s still significant value in traditional face-to-face customer interactions, so companies must be careful of not tipping the balance too far in favour of technology and putting themselves at risk of becoming a faceless and untrusted corporate machine.
Strategy first, technology second
Technological advantage is nothing without the right customer-centric business strategies and attitudes. With almost one in five companies operating without a formal CX strategy, it comes as no surprise that so many organisations are seeing low net-promotor scores and little commercial improvement, despite investing heavily in new digital channels.
It's equally clear that far too few financial services organisations are engaging directly with their customers or using data analytics to transform customer data into market intelligence. While bringing all areas of the business into the same conversation should be seen as the starting point, the lack of a coherent CX strategy that’s fully focused on the customer will leave many organisations struggling to remain relevant as the financial services world continues to undergo such rapid and dramatic change.
Steve van den Heever, Group Sales Director of Financial Services at Dimension Data