Let’s talk about Customer Experience

With the FCA and CMA mandating that large UK banks must publish information on how likely people would be to recommend their bank, it’s much easier for consumers and small businesses to compare the services offered by different current account providers. The goal is to stimulate greater competition, encouraging customers to evaluate different bank offers and switch if they find a service that suits them better elsewhere. 

With a growing number of customers considering their bank relationship to be merely transactional, there’s a risk that banking becomes a commodity service. Delivering great customer experience (CX) is crucial in allowing banks to create deeper relationships with customers that engender loyalty and make a real difference to the bottom line.

So what should banks be doing to create the type of customer experience that delivers real competitive advantage?

Key areas of focus should be: customer centricity; digital transformation; collaboration and innovation. On top of these building blocks, banks should also be looking to harness the potential of artificial intelligence and big data in helping to personalize and enhance CX over the long term. 

Customer centricity 

A customer-centric approach is fundamental to developing a more meaningful relationship with customers. For too long banks have been product driven, operating from distinct business silos without an overall view of the products and services used by each customer. Customer centricity forces cross-functional integration, breaking down silos as it attempts to create a unified and interconnected bank – one that’s equipped todeliver a fully joined-up and more engaging experience.  

Better understanding of customer needs and desires will help them feel their bank is supporting them in achieving their goals – turning them into advocates and customers for life.

For customer centricity to be truly effective, buy-in is needed across the whole organization – starting at board level and cascading down so that it becomes an integral part of company culture.  

Digital transformation

Banks must transform their operations to compete effectively in the digital age. This means a keen focus on what the customer sees and experiences across all channels and touchpoints – working to remove friction and create a more seamless customer journey. It involves overhauling legacy structures and modernising and optimising all systems and processes to dramatically reduce the risk of system failures. 

Customers don’t want to hear about legacy challenges or technical issues. They expect their bank to deliver the same great digital experience they’ve become accustomed to in their online interactions with retailers, travel experts and tech giants.

Collaboration and innovation

The pace of change being brought about by Open Banking and PSD2 is forcing banks to recognize not only the competitive threats posed by Fintechs, but also the potential opportunities to be gained through greater collaboration. Banks are starting to see that they no longer need to develop everything in-house. New models such as a Bank-as-a-Platform and an open API approach will allow them to collaborate, develop and deploy services securely via the cloud. 

The ability to translate these changes into an enhanced customer experience will be dependent on a change in mindset, moving away from a closed, inward-looking approach towards greater openness in collaborating with partners, and a willingness to experiment and deliver innovation. Certainly, innovation in areas such as the use of digital assistants, chatbots, robo-advisors, voice and speech recognition to automate front-end banking will be crucial in speeding up response times and driving increased customer satisfaction. 

The role of AI and big data

Customers show greater loyalty to banking brands that know who they are and treat them differently. To deliver against this goal, it’s essential for banks to be conversant with the use of big data, artificial intelligence and machine learning.

Banks should take advantage of the huge amount of customer data they have available to create personalised experiences that make customers feel valued. They have an opportunity to combine transaction data, personal data, mobile location and social media data to respond to and even pre-empt customer requirements based on their actual needs. Of course, to ensure a high level of trust with customers, and full compliance with GDPR, banks need to ensure they gain permission from customers to use their data. The reward will be a better and more personalized service. 

In an Open Banking world, if you’re not serving customers effectively or are failing to deliver services that are tailored to their needs, it’s very easy for them to switch to another provider. 

Great customer experience today is the key to business growth tomorrow. With league tables comparing bank performance, delivering a truly customer-centric, digital-first and collaborative approach that keeps them happy is more important than ever!