Customer expectations and interactions with businesses are ever-evolving in today’s modern world. As more and more businesses become digitalised and focus their efforts online, they need to establish a culture of data integrity and transparency and acknowledge the importance of this to consumers. Data breaches—whether experienced by household names or social-media giants—regularly feature in the news, and customers are increasingly wary of businesses abusing their personal data for financial gain. The financial-services sector is one of few that utilises customer data to ensure a smoother service with the customer. The Institute of Customer Service’s latest breakthrough research, “Upfront and Personal”, reveals the depth of consumer scepticism and highlights how other sectors should look to the banking sector to implement change.
Customers interact with organisations through a broad range of channels, but to what extent is this driven by customers’ preferences? The use of a customer’s data is integral for deeper insight and a more personalised relationship with him or her, but organisations need to first establish a trusting relationship before data can be used effectively and appropriately.
Trust is integral in forming a business relationship, and how customer data is leveraged to deliver a personalised customer experience is a challenge facing most organisations today. Our recent research found that almost two-thirds (64 percent) of consumers in the United Kingdom are unable to name a single organisation that they trust with their data, and a quarter (25 percent) of customers won’t share any of their personal information with organisations for fear of what they might do with it. This outlines the reality of consumer scepticism towards organisations and the new challenges businesses face.
Despite this lack of trust in organisations, The Institute’s research found that “My bank” was the organisational type most commonly named when participants were asked to name an organisation that they trust with their data (Figure 1).
Figure 1 – “Upfront and Personal” Research
Consumers also identified the most important reasons for trusting an organisation with personal data as the organisation’s reputation, length of the relationship and memory of receiving consistently high levels of service. As identified in our latest “UK Customer Satisfaction Index”, the banks and building societies sector performed higher than the UK average for both experience (81.2 out of 100) as well as complaint handling (61.6 out of 100). Both of these factors are key to establishing trusting relationships and ensuring repeat customers.
Utilising artificial intelligence
The use of customer data comes hand in hand with the rise of artificial intelligence (AI) in customer service, emphasising the need for businesses to get it right.
There is a clear role for AI and new technologies to provide an improved service and make better use of customer information. However, it is vital that businesses implement AI through the lens of the customer. Our research found that many customers (67.7 percent) are unsure of their confidence in how AI is being deployed and are significantly more concerned when AI is used secretively. A business needs to ensure complete transparency with a consumer as to how it uses his or her data. By securing a trusting relationship, customer satisfaction when dealing with an organisation will be boosted.
The financial sector implements the use of AI successfully with examples of proactive customer care. Risk-monitoring situations, such as fraud prevention-and-detection technology, are used across these sectors, and, according to our recent report, more than half of UK consumers (62.1 percent) feel comfortable with this kind of AI. This type of data utilisation is designed to help customers get more benefits from using services or solve problems and is not designed to generate revenue. Customer data used in this way helps build engagement and trust.
Despite the positive effects that AI can have on a business, the effect on the customer needs to be considered as part of the blended customer experience. AI is unable to deliver the same emotional connection or empathy that comes from human interaction. Boardrooms need to understand the importance of this to the consumer and the wider customer experience and design systems around the customer as a result.
If businesses are transparent about the data they collect and how they will use it, they can build trusting relationships with their customers and sustain customer service. Data should be used responsibly to enhance service rather than abuse the customer relationship.
Our research reveals that just under a third (32.7 percent) of customers believe that organisations should provide more information and transparency about how they collect, manage and store data, and 37.8 percent want more government regulation on this. To make customers feel more comfortable, businesses need to focus on getting things right the first time and being transparent about how personal data is used. Failure to do so risks fuelling pressure for more regulation or causing customers to become less willing to share their data.
Personalisation can be defined as the ability to recognise and identify a customer and present information, services or solutions based on an understanding of his or her specific needs. Once a business has established a relationship with a consumer based on trust and transparency, data can be used to provide a truly personalised experience.
Customer data should be used to deliver relevant, appropriate personalisation through a genuine omnichannel experience. As in financial services, customer data can be used to identify and tailor services to customers with particular needs. As most banks now have an online presence and banking apps, customers are free to choose how and when they use them. New challenger banks utilise customers’ spending habits to help advise them on how to save money and improve their financial wellbeing.
For businesses looking to utilise customer data for genuinely personal customer experience, I urge them to take on board the following recommendations:
- Understand and engage with customer preferences. Understand how and why customers want to interact with your business and what level of personalisation customers consider to be beneficial.
- Build a culture of integrity and transparency. Develop a culture that values the critical role of data management—not just for meeting legal requirements but also to enable long-term customer trust and commercial objectives.
- Integrate data and systems. Define the key datasets required to enable customer experience and a plan to enable data to be collected, accessed and transferred.
- Develop organisational alignment. Ensure there is alignment of purpose and strategy across marketing, customer experience, data and information technology (IT) teams.
- Maintain the human touch. Design customer journeys so that there is always the opportunity to speak to a person, ensure hand-offs between channels are managed smoothly. and invest in developing employees’ empathy, problem-solving and commercial judgment skills.
- Manage the needs of vulnerable customers. Develop expertise in diagnosing the needs of vulnerable customers and tailoring experiences to meet their needs.
- Base your approach on customer needs rather than being driven by your data and systems. Track linkages and hand-offs between channels in a single customer journey, identify opportunities for personalisation that make experiences easier, and set measures that enable a realistic assessment of customer experience and commercial impact.
As customers’ data becomes more widely available to businesses, initiating how to handle it responsibly needs to be a priority. UK organisations must establish trust and transparency with customers and clearly outline what data will be taken and how it will be used. Once this relationship is formed, businesses can utilise new technologies and begin to offer a personalised experience for customers. Data handling is a privilege for organisations, and businesses that breach customers’ trust may lose them forever. By establishing a customer-centric approach, businesses will reap the rewards of customer trust, loyalty and subsequent return on investment.