Ready or not, the financial services industry has officially been thrust into the digital-first era. Consumers are now much less forgiving of financial institutions that continue to lag behind with their digital solutions and services.
In fact, 70 percent of consumers under age 55 would switch banks for a better customer experience, according to research by Mobiquity. And that financial customer experience isn’t just defined by how helpful agents are — it’s about choice, convenience, and ease, too.
What’s changed in financial customer experience?
COVID-19 was the catalyst of a digital shift. Fidelity National Information Services reported an 85 percent increase in mobile banking traffic in April 2020 — and a 200 percent increase in new mobile banking registrations.
While some institutions were equipped to handle this change, many smaller banks and credit unions were left scrambling to adapt — but now the playing field is more level and financial institutions of all sizes have implemented new digital technologies.
So, what’s next for customer experience in financial services? Let’s take a look at the trends, facts, and statistics shaping strategies in the industry.
Customer expectations and behaviors
This is where consumers stand today when it comes to financial customer service:
Operational Efficiency
1. Seventy-six percent of customers expect consistent interactions across departments — yet 54 percent say it generally feels like teams don’t share information. (Salesforce)
2. Call center volume jumped 800 percent in early 2020. (Pindrop)
3. Nearly 40 percent of customers abandon onboarding processes in digital channels. (Deloitte via FintechOS)
Satisfaction
4. Financial services is ranked second-to-last when it comes to being customer-centric, with only government being ranked lower. (Salesforce)
5. Only 20 percent of customers say they feel emotionally connected to their primary bank. (Gallup)
6. Customers who rank their overall mortgage experience a 4 out of 10 or less are 2-5x as likely to refinance elsewhere than customers who give a 5 or higher. (McKinsey)
Mobile banking
7. In 2015, only 9.5 percent of consumers said mobile banking was their primary method for accessing their accounts. In 2019, this grew to 34 percent, beating out online banking (22.8 percent), bank tellers (21 percent), ATMs (19.5 percent) and telephone banking (2.4 percent). (FDIC)
8. 44 percent of consumers are likely to bank more on a mobile app if it offers more real-time problem resolution. (Deloitte)
9. In 2019, two-thirds of smartphone users over 50 years old reported they had not used their phone for banking. (Financial Health Network)
Digital shift
10. Forty-one percent of banking customers are now digital-only. (JD Power)
11. Only 20 percent of consumers would rather visit a bank location than do their business using digital channels. (Consumer Affairs)
The state of CX in financial services
12. Only 16 percent of consumers said they are satisfied with their primary financial institution’s digital experience. (NTT DATA)
13. Prior to the pandemic, 49 percent of big bank customers had high levels of digital engagement, compared with 41 percent of regional bank customers and 36 percent of midsize bank customers. (JD Power)
14. Only one in ten issues reach a final resolution without the consumer having to resort to a live agent. (Twilio)
15. Most leaders describe their CX as very consistent (45 percent) or somewhat consistent (28 percent) across channels. (Microsoft)
16. Thirty-eight percent of financial leaders believe customers will embrace digital financial tools over physical branch services in 2021. (Microsoft)
17. Forty percent of financial services organizations say keeping up with consumer expectations is a key challenge. (Adobe)
18. Sixty-three percent of financial services organizations placed customer experience (CX) at the top of their priority list. (Adobe)
19. Sixty-three percent of financial leaders say providing enough self-service options for customers is a challenge. (Microsoft)
20. Twelve percent of financial leaders don’t know or can’t measure the CX across channels. (Oracle)
21. Eighteen percent of financial institutions don’t have access to previous customer interactions. (Oracle)
How financial institutions are investing in CX
22. Digital-only banks have an average cost-to-income ratio of 47 percent, substantially lower than the 73 percent average among less significant banks. (European Central Bank via Deloitte)
23. Fifty-seven percent of financial executives say they have a project slated in the next 12 months to create a unified phygital (physical and digital) customer experience. (Microsoft)
24. Sixty percent of banks say they are yet to make significant progress executing their digital transformation strategy. (Publicis Sapient)
25. Seventy-one percent of banks are ‘slow starters’ for digital innovation. (Publicis Sapient)
26. A 37 percent of transformation leaders at digital-first banks say their transformation priorities are influenced by consumer technology companies. (X Bank)
27. Roughly half (48 percent) of banks and about four in 10 (42 percent) credit unions have partnered with fintech startups over the past three years. (Cornerstone)
Efficiency
28. Forty-six percent of financial institutions’ service teams plan to expand the call center, remote customer service programs, or both. (Microsoft)
29. Thirty-four percent of executives want to remove friction from every customer touchpoint. (Oracle)
Channels
30. Thirty-four percent of financial services leaders plan to use remote video conferencing and consultation solutions in the future — 22 percent already did during the pandemic and plan to continue. (Microsoft)
31. Sixty-four percent of institutions used virtual customer assistants or chatbots, but 16 percent report they’re planning to discontinue their use post-pandemic. (Microsoft)
Automation
32. Sixty-two percent of banks and credit unions used customer onboarding and feedback automation during the pandemic and will continue to use it (Microsoft)
33. Fifty-seven percent of finance executives report they’ll create more digital self-service options. (Microsoft)
Looking forward: What’s in the crystal ball
34. Reallocating the workforce: Deloitte says upskilling and cross-skilling agents to handle more complex inquiries that previously took place in-person is a “no-regret” action.
35. Automating operations: McKinsey estimates that 75 to 80 percent of transactional operations (e.g., general accounting operations, payments processing) and up to 40 percent of more strategic activities (e.g., financial controlling and reporting, financial planning and analysis, treasury) can be automated.
36. Priorities: Financial services organizations say their top 2 strategic priorities are improve digital CX and enhance data and analytics capabilities. (The Financial Brand)
37. Reducing tech debt: 62 percent of bank execs said legacy systems rack up significant IT maintenance costs. (Capgemini)
38. Fintech: Fintech is responsible for roughly one in five (17 percent) of the world’s unicorns, more than any other sector. (CBInsights)
39. Challenges: If at least 50 percent of a bank’s customers would not refer them to others, the bank will likely succumb to the same fate as retailers which failed to deliver a “wow” level of experience to customers. (JD Power)
40. Urgency: Credit unions will give banks a run for their money — just 15 percent of credit unions won’t have a digital transformation strategy launched at the end of 2021. (Cornerstone)
41. Financial customer experience: 70 percent of credit unions and 67 percent of banks rate improving CX and service delivery as their #1 priority for the upcoming year. (Cornerstone)
4 key takeaways: Modernize your customer experience
Here are the main takeaways from our list of statistics and trends in financial customer experience.
- While digital banking has higher adoption than ever, many consumers still struggle with it (partly because of an apparent technology gap between generations). For financial institutions, it’s important to put all customers’ needs first when embarking on a digital transformation journey.
- Financial institutions struggle to keep up with ever-evolving consumer expectations, regardless of their size. Leaders in these organizations know they need to focus on digital, but many fail to deliver the kind of seamless experiences consumers want.
- While many banks are investing in digital technology, where investments are made varies. Some financial leaders are zeroed in on backend operational efficiency, others automation and AI, and others still simply meeting customers where they are.
- Consumer behavior and expectations are ever-evolving — and financial institutions need to look ahead in order to keep up. What’s on the horizon? For many, doubling down on CX is just the beginning.
What trends do you think are coming up in financial customer experience? Let us know in the comments.