Even before 2020, digital natives and new business models that put technology first were causing significant changes in the financial services industry. So, when the Covid-19 pandemic caused shutdowns worldwide, all financial services providers were forced to offer remote engagement options to their customers, whether or not they were ready to do so. This was true for both direct-to-consumer payments and business-to-business payments with small businesses.
BCG research shows that companies with the highest customer satisfaction scores have created twice as much value for their shareholders over the last ten years as companies with the average score. These companies have made more money, but their price-to-earnings ratios have also increased, which means that their total shareholder return has also increased. This customer insight makes Amazon, Apple, and Google market leaders.
The Fast Changes in the Banking World
Financial institutions, especially those still relying heavily on a brick-and-mortar model, had to make significant changes to adapt to an entirely virtual market. Transactions moved online, customers wanted to be able to help themselves, and automation-driven tools helped customer experience teams grow to handle the rising number of contacts. It became necessary for businesses to get products to market quickly without compromising data security and measures to prevent fraud. Then, long-term resilience required the flexibility to grow or shrink in response to repeated closures and changing contact rates.
Fintech, already tech-savvy and flexible, was better prepared to weather the global storm and grew faster than its more traditional peers. But many well-established financial institutions could change quickly by using new cloud-based services and a scaled, agile approach to drive efficiency and speed.
CX should be an essential part of digital transformation.
During the pandemic, more people worked, shopped, and banked from home or on their phones. This made businesses and customers rely more on digital technology. Health and safety became a more significant part of the customer experience in places where personal interactions were still needed. Behind the scenes, a lot was also changing in the financial services industry. The number of calls to contact centers went up, and most banks saw an increase of more than 20% in the number of digital accounts opened.
The following direct cause-effect relationships amplify the CX efforts banks must make.
Innovating the ‘new’ in human experiences.
Incremental gains of 5 to 7 percent yearly do not impact the bottom line. For improvements to have a natural effect, they need to be between 30% and 50%. Companies are graduating to using human-centered design to create customer experiences that change the game. This means building a robust design function that hires, trains, and supports designers who focus on people. This method allows for significant changes by starting with a goal for the future and working backward to get there.
Team Integrations across the company.
Companies must combine their budgets and projects for change initiatives into fewer, better-coordinated efforts focusing on customer journeys or customer-centric value streams. This way, the changes sustain and are genuinely transformational. For this strategy to work, companies must change how they handle governance and funding. Additionally, teams should be allowed the power to make decisions about design and implementation, while leaders set the direction and give permission to spend money.
Synchronized customer and channel interactions.
Increasingly banks realize that they must first create a central database where they can store all the information about how each customer interacts with them across all channels and business lines. So, everyone in the organization will have the same level of understanding about the customer, which will reduce friction. Next, companies need to create a highly automated solution, usually powered by artificial intelligence, that can continuously collect and analyze data for each customer and suggest the best next step.
Relentless Customer-First Culture.
Creating a culture that puts the customer first is crucial to significant change. It means infusing everyone’s job with a healthy dose of CX and rewarding behaviors that lead to outstanding customer accounts. For this to happen, effective changes are needed across – leaders, senior executives, and front-level teams.
Impact beyond surveys.
Companies are used to measuring CX by looking in the rearview mirror. They use CX metrics from surveys done after the experience has happened. But survey results don’t always tell us what causes CX problems or how they affect business. And because the metrics come after the incident, there aren’t many real-time chances to change course. Therefore, the new measurement must track every real-time customer interaction with the company and third parties. To build this more complex system, incumbents must consider the rich insights from crucial customer journeys.
For banks to turn their CX into high returns, a radical overhaul is needed for CX programs, supported by an operating model that puts customers at the center of their business. As with any significant change, it’s essential to start with a big picture and see how current CX capabilities compare. Once the gaps have been found, companies should plan for how to fill them.
Future success will come down to three things.
First, for a business to be resilient in the long run, it will need a more flexible and dynamic model. Second, we need to make it easy for customers to use their financial services, products, and plans by giving them simple digital tools and ways to get help. Third, we must never forget how important it is to combine technology with live care when a human touch is needed.