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Qualities such as trust, reputation, history, and size have traditionally been the benchmarks through which consumers choose financial institutions. However, the tides of banking are changing. The evolution of technology has altered user priorities and increased the importance of customer experience in banking. How should the financial services industry keep up? Let’s explore.
Large established banks used to be the bedrock of the financial services industry, but these days, banks struggle with cultivating consumer trust. The 2019 American Banker/Reputation Institute Survey of Bank Reputations revealed that public perceptions of top banks are slipping. From 2018 to 2019, the number of banks that earned an “excellent” reputation rating from its customers fell from six banks to two.
The more disturbing revelation from the survey, though, is how noncustomers rank the top banks. None of the top banks earned an “excellent” rating, and only one was listed as “robust.” The majority of the banks have an average or weak reputation among potential customers.
All hope isn’t lost for big banks, though. Customer perceptions are changing, and banks that evolve to match these customer experience needs can rebuild their brand. Huntington Bank, only one of two banks to achieve top scores from customers, attributes their digital banking platform for part of their success. The Hub helps customers monitor their spending and reach financial goals.
Financial institutions don’t have to wonder what customers want. There are reliable surveys that layout customer expectations in black and white.
More and more, customers demand ease and simplicity. The average person has up to 17 interactions a month with their bank, mostly online or on mobile, so a complicated or outdated system can lead to a lot of friction.
Along with simplicity, banking customers expect personalized recommendations. In fact, 40% of banking customers listed more personalized service as a reason to switch financial institutions.
Simplicity and personalization are customer expectations across all industries. Education and counseling, on the other hand, are somewhat unique to banking. Rather than simply trusting the big brands to know what’s best, customers want transparency into the banking process and to feel empowered in their choices.
79% of North Americans are open to receiving computer-generated advice on investments, such as asset allocation, and 74% would take input on which account type to open. These stats show a willingness to use digital features to make banking decisions, as long as the tools can give them proper guidance.
The good news for financial institutions is that all of the new customer expectations can be met with technology. If you want proof, look no further than the growing fintech industry.
Fintech investments are in the billions each year across different segments such as banking and digital lending.
Some of these investments could be linked to the fact that customers are willing to try new, digital banking methods. Back in 2013, Accenture found that there was a consumer perception that switching banks was difficult. In 2016, the “difficulty of the process” of switching fell from number two to the number five hassle. As customers become more willing to switch and options become plenty, competition rises.
Financial institutions that weren’t born from tech still recognize the need for modernization. 47% of bank executives rank AI as the tech that will have the most significant impact on their organization in the next three years. Plus, 87% agree that the integration of customization as a customer interacts with a site is the next big wave of competitive advantage.
Knowing the trends and implementing them are two different things, though. While most leaders know personalization is important, only 38% reported that their organization is prioritizing a customized approach to delivering products and services. One of the challenges for banking leaders is choosing a set of customer experience tools that can easily work together. Big institutions may not be able to act as swiftly as small tech startups, either.
Now that we’ve explored customer experience expectations for the financial services industry, let’s dive into putting ideas into practice. Here are 10 ways you can improve customer experience in banking:
One of the easiest ways to meet banking customer experience expectations is through offering live chat that aids in account selection and application. Investing app Acorns has successfully implemented a smooth onboarding process, after they identified that a key issue with existing solutions included “poor online user experiences, especially around account opening.”
The Chief Commercial Officer for the brand shared that the new user registration process takes 3-5 minutes, and they have live chat support standing by. Having resources and support just a click away helps reduce friction when opening up a new account.
Chatbots are another useful way to assist the customer’s experience at scale. Both potential and existing customers can use chatbots anytime, anywhere to get information on new products or existing account activity. Companies like Wells Fargo have implemented chatbots that offer customers a faster way to check balances or find an ATM, while other banks have also used chatbots to help users activate a new card and find statements.
While having live chat, chatbots, and more to support customers is great, the efforts are for nothing if your knowledge base, made up of FAQs and helps docs, isn’t up to date. Putting time into creating an accurate knowledge base that’s easy for both customers and your internal support team to use is crucial.
After all, your support employees need accurate information to resolve issues and maintain a consistent experience. Your knowledge base is also helpful for onboarding new chatbots by giving them information to learn from.
If you want a self-service FAQ that’s in tip-top shape, hire copywriters to create engaging FAQ copy, and A/B test documentation pages to better understand user preferences.
Another potential competitive advantage that your financial institution can implement is transparency. Digital bank Monzo recognized that they faced an uphill battle earning customer trust, so they’ve implemented a policy of “radical transparency.”
Some of the ways they put this idea into practice are disclosing how they use customer deposits, sharing their future plans for the app, and asking their customers what else they should be sharing.
Part of building a culture of transparency is being a brand that customers can rely on for support — whenever, wherever. Cobrowsing is one tactic for providing real-time support. Whenever a customer has a question or concern, a support representative can securely control their screen to help them through issues. Rather than telling a customer what to do, cobrowsing allows agents to show them instead. Customers react well to cobrowsing, sharing that the ability to connect immediately via channels like screen sharing increases convenience and improves overall experience.
Financial institutions have the opportunity to win over customers if they can nail the omnichannel experience. 62% of people use digital banking, and 46% of people managing their finances switch devices before completing an activity. An example scenario is someone using their mobile phone to find information about a credit card offer, but switching to their laptop to finish applying.
A customer’s experience should seamlessly work together across devices to be truly omnichannel. Currently, customers feel banks are lacking in this area. Only 27% of consumers think their bank’s branch, online, and mobile channels are seamless. Not sure how to implement omnichannel for your brand? Omnichannel best practices include making sure your FAQs and support videos are mobile-friendly, cutting down on social media response time, using live chat software that works on all devices, and tracking interactions across channels to better understand how your users behave.
To be able to provide personalized customer experiences, you need a way to organize and implement customer data. Tracking past interactions and preferences allows you to suggest information for a customer’s situation or pitch products that fit their lifestyle. Keeping track of customer actions are also beneficial for future customer support interactions. If a customer support agent can view a customer’s entire activity history, they can avoid asking duplicate questions or offering irrelevant advice. Banks are expecting to handle a lot more customer data, with 30% of banking executives expecting an exponential increase in the amount of digital demographic data their organization will manage over the next two years.
Customer activity can also aid in AI, as Ally has done with Ally Assist. The voice or text-based assistant takes customer profiles into consideration when suggesting solutions. By learning from individual interactions and transactional behavior, Ally Assist determines the likelihood that a person will need certain information. The bot also helps users perform tasks such as paying bills, reviewing transactions, and understanding spending habits. Ally also released an Ally Skill for Amazon’s Alexa.
As we covered earlier, the financial services industry has a unique opportunity to use education as a brand driver. Efforts can be as minimal as an updated knowledge base or content marketing campaign, or as large scale as Capital One Cafes.
The cafes are part coffee shop and part financial education center, and are aimed at millennials. Inside, anyone can take a financial literacy test or calculate how to manage student loan debt on iPads. The cafes also have financial experts/life coaches to give private 20-minute money lessons, as well as hour-long public talks on money topics. The Capital One Cafes are part of an omnichannel strategy focused on teaching people about finances and providing personalized recommendations.
Other banks have created digital education. Bank of America partnered with Khan Academy to develop financial literacy information site, and Acorns sponsors the personal finance education and news site Grow along with CNBC.
Another way to make the most of customer data and behavior is to use customer journey mapping to send behavior-based messages. Customer journey maps plot out who customers are, where they’re coming from, and what they want to achieve. Creating maps for your different customer segments allows you to pinpoint moments in their journey to becoming and remaining a customer that could use support.
In-app or time-based triggers can be used to send messages that nudge behaviors that lead to long-term financial success or give customers a heads up about an upcoming payment due date.
Part of an omnichannel experience means communicating with customers wherever they are. In addition to in-app messages based on behavioral data, you can send updates and suggestions via email. Reaching out to customers outside of the app keeps your brand top of mind, and keeps users engaged in the long run.
For financial institutions, email is useful for flagging potential credit card fraud, alerting a person who may be at risk of overdrawing their account, giving investment updates, or alerting them to new products they may be interested in.
The final component of a successful customer experience strategy is feedback. Establishing opportunities for feedback and customer sentiment scoring ensure you can catch issues before they escalate. It's valuable to gather feedback so that as customer needs change, you’re able to tailor offerings and strategies.
When you’re setting up surveys to gather feedback, there are a few best practices to keep in mind. First, consider giving example responses to your questions so customers know what kind of information you’re looking for. Next, ask users how they would rate your company or features on a scale of 1-10 after they’ve already answered a few text questions about it. This way, their mind is already on the topic, and they’re less likely to choose a random number.
The digital age has generated an expectation of speed and usability that customers uphold every industry too. As trust in banking falls and the competition with fintech rises, financial institutions need to focus on customer experience to set themselves apart and remove any temptation for users to switch banks. By implementing tools that work together seamlessly to produce an experience that educates customers, banks can strengthen their brands.
If you’d like to further understand the impact of customer experience in the banking industry, download our Financial Services Customer Experience Factsheet.
A practical, data-driven exploration of customer experience in digital banking.