Source CX Industries Finance and Fintech Bolder Banking: Redefining CX to Stand Out in Finance

Bolder Banking: Redefining CX to Stand Out in Finance

In an era where the financial landscape is more competitive than ever, banks are increasingly recognizing the value of customer experience (CX) as a pivotal factor to differentiate their offering — both from traditional banking alternatives and the rise of fintech companies challenging their market share.

This calls for a new approach to banking — one that is customer-centric and digitally savvy — and banks that successfully navigate this transformation can position themselves favorably in a crowded market. Research by McKinsey highlights how important the customer experience is to banks’ bottom lines, revealing a difference of 72 percentage points in TSR (total shareholder return) between the top and bottom quartiles of banks (as measured by Net Promoter Score — or “How likely are you to recommend this bank”)

The key lies in understanding the nuanced demands of today’s banking customers and leveraging the power of digital transformation to meet, and exceed, these expectations. To thrive in this new era requires banks to rethink the role that customer experience plays — and understand its relevance to the whole organisation.

In this 5-minute read we’ll explore:

  • How banking customers’ needs are changing and evolving
  • The increasing importance of the digital customer experience
  • Using AI to predict customer needs before they emerge
  • Fostering trust in a digital-first banking experience
  • Why a customer-first culture is a key competitive advantage

How banking customers are evolving

The modern banking customer is sophisticated and commercially aware, shaped by rapid technological advancements and an ever-changing global financial environment. They have grown to expect a level of service that transcends the traditional boundaries of banking — seeking a seamless, personalized experience that fits their digital-first lifestyle.

The impact of global events, such as the coronavirus pandemic, has further accelerated this shift. Customers now demand not only online accessibility as standard — but also expect banks to provide a secure, yet uncomplicated, digital experience. What was once a predominantly transactional relationship between banks and their customers has evolved to become more nuanced and relationship-focused.

This transformation is underpinned by a growing demand for personalization. Today’s customers look for more than just convenient deposits, withdrawals, and interest payments — they expect their bank to provide them with tailored advice based on their individual circumstances. A recent study by Experian illustrates the extent of this need, revealing that “although more than two-thirds of customers expect companies to understand their needs and expectations, just three in 10 banking customers felt their financial providers met their demands.”

The role of the digital customer experience

The transition to digital banking is not a passing trend — the online customer experience is paramount in engaging today’s customers. To excel in this arena, banks must embrace innovative technologies that enhance customer interactions — from intuitive online banking platforms to advanced mobile applications.

AI and machine learning are playing increasingly important roles in banking’s digital transformation. These technologies enable banks to offer predictive services, tailor recommendations, and automate routine inquiries, allowing for a greater degree of personalization in customer communication and relationship building, while reducing the overheads associated with providing 24/7 access to human account management representatives.

In a recent video, Brian O’Neill, CCO at Numerated points out how banks need to adapt to meet changing consumer expectations that are “being shaped by tech companies like Apple and Uber.” Easy-to-use self-service tools that allow customers to review their accounts, apply for loans or financing, and manage investments are expected as standard.

Learning from tech and customer experience leaders in other sectors, the focus for banks should be on creating a user-friendly, accessible, and secure digital space that caters to the on-the-go needs of modern consumers, while also providing value-added services that enrich the customer’s banking experience.

Leveraging personalization and predictive AI

Today’s customers expect banking services that are not just convenient but also tailored to their unique needs and preferences. Banks can leverage data analytics and AI to gain deeper insights into customer behavior, preferences, and needs. This enables them to offer personalized product recommendations, customized financial advice, and targeted offers that resonate with individual customers.

Predictive banking services, powered by AI, take personalization a step further. By analyzing customer data, banks can anticipate needs and offer solutions before the customer even realizes they need them. This might include proactive financial advice, alerts about potential account issues, or timely offers for relevant financial products.

An article from Hitachi Global Insights offers suggestions for “humanizing” AI interactions, including “giving chatbots personalities, using customized conversation openings, and leveraging sentiment analysis to detect emotion and respond appropriately.”

By adopting predictive services, banks not only enhance the customer experience but also position themselves as proactive, forward-thinking institutions that are attuned to their customers’ evolving needs — a competitive advantage in a crowded marketplace​​.

Enhancing accessibility and building trust

Customers expect unfettered access to their financial services across multiple channels, online, through mobile apps, or at physical branches — an omnichannel approach that lets them manage their finances whenever and however they prefer, enhancing the overall accessibility of banking services.

However, with increased digital interaction comes the challenge of maintaining robust security. A careful balance of security and accessibility is crucial in building trust. It falls to banks to educate their customers on how to safely use new technologies such as mobile banking or semi-automated investment tools without exposing themselves to unnecessary risk and to ensure these technologies are updated to cope with new and emerging threats.

Investment in advanced cybersecurity measures, compliance with financial regulations and transparent communication about how customer data is used and protected are all therefore essential. By demonstrating a commitment to data security and privacy, banks can strengthen trust among their customers — the key to a lasting relationship, especially in the financial sector.

Preserving the human touch in a digital world

Despite the rapid digitization of banking services, the human element remains a crucial component of the overall customer experience. In an industry increasingly dominated by technological innovations, personal interactions and human empathy still play a vital role in customer satisfaction.

Banks need to ensure that their staff, from customer service representatives to financial advisors, are well-trained, empathetic, and knowledgeable. Being able to provide the human touch can make a significant difference, especially in complex or sensitive financial matters where customers are looking for reassurance, responsiveness and personalized advice.

Investment in the training and development of banking staff is therefore critical.

Employees should be equipped not only with an extensive knowledge of the bank’s products and services, and the legal and regulatory environment, but also with specialist skills in customer relationship management and empathy.

Outsourcing can be an effective strategy for banks looking to augment their customer service capabilities, especially in areas requiring specialized skills or for handling high-volume customer interactions. It can offer several benefits, such as access to advanced technology, on-demand expertise in financial customer service management, and cost-efficiency — allowing banks to focus on their core competencies while ensuring that customers receive high-quality service.

And even in a digital era, banks should not overlook the importance of physical branches — notably an article by Hitachi found that TD Bank’s combination of digital offerings and omnichannel experience with extended opening hours at its 1,200+ brick-and-mortar branch locations was key to ensuring customer satisfaction.

Continuous improvement through customer feedback

A dynamic approach to customer experience in banking involves not only implementing innovative strategies but also continuously refining them based on customer feedback. This means that banks need to establish effective channels for collecting feedback, whether through digital platforms, in-person interactions, or periodic surveys.

Analyzing customer feedback enables banks to adapt their services and strategies in real-time — crucial in an industry that is rapidly evolving in response to technological advances and changing customer expectations. AI tools have a role to play here, allowing for a much deeper and granular understanding of large-volume data, and the extraction of key insights and suggestions.

By actively listening to their customers and responding to their needs, banks can make informed decisions that enhance the customer journey — tailoring products and services to meet the specific needs of different customer segments, improving digital interfaces based on user experience, or addressing common pain points in customer service.

The importance of building a customer-centric culture

The final pillar in redefining CX for greater impact in banking is cultivating a customer-centric culture within the organization. This involves more than just implementing customer-focused strategies; it requires a fundamental shift in the mindset and values of the organization, starting with the leadership.

By prioritizing customer experience in their vision and strategy, leaders can set the tone for the entire organization. They must champion the importance of the customer experience and ensure that it is ingrained in every aspect of the bank’s operations, from marketing to product development to customer service.

Internal policies and practices should also support a customer-centric approach. This includes employee training programs focused on customer empathy and satisfaction, performance metrics that emphasize customer experience, and incentives that reward staff for delivering exceptional service.

Conclusion

Redefining customer experience in the banking sector is not just a matter of implementing new strategies; it is about embracing a fundamental shift towards customer-centricity. In a marketplace where technological advancements are almost ubiquitous, banks that prioritize and continuously innovate their CX strategies are the ones that will stand out and succeed.

The scale of the challenge will vary from bank to bank — depending to an extent on how well-developed their CX functions already are. One avenue that organizations looking to make extensive changes can explore is partnering with a CX expert such as SourceCX — which offers a combination of technological aptitude, highly-trained CX talent, and implementation planning services to ease the transition.

Those banks that are genuinely committed to understanding and meeting the needs of their customers, and are willing to face these challenges head-on will reap the rewards — not only meeting the current demands of their customers but also anticipating and preparing for future trends, ensuring their continued relevance and success.