By Andrew Beatty, Head of Strategy & Banking, FIS
Delivering effective customer experience (CX) is a never-ending process and an ongoing focus for banks and financial institutions, but the landscape is changing. Thanks to the advances of digital banking and new technologies, such as artificial intelligence (AI), banks now face a completely new set of expectations and dynamics when it comes to every aspect of customer interaction.
Consumer loyalty to banks is being tested more than ever. The long-standing assumption that consumers will stay loyal to only one banking provider during their lifetimes is really being tested now. While products, services and fees are critical to business operations, effective CX, and communications across a more complex array of channels, is an increasing priority to ensure customer satisfaction, retention and loyalty. Among all of the technological advances, one simple fact remains: By continuously listening to, communicating with and learning from customers, banks can avoid missing what’s important to their customers and will win their loyalty.
Findings from FIS’ latest “Performance Against Customer Expectations (PACE)” report points directly to this. There is a need for banks to strategically assess and improve the process of creating, managing and enhancing digital communication touchpoints with customers. For example, 64 percent of UK survey respondents felt that a bank’s ability to provide a smooth, easy customer experience was an important attribute in helping them to choose said bank. Another recent survey from The Financial Brand found that almost two-thirds (63 percent) of customers would consider switching banking providers if customer communications did not meet their expectations or needs.
A new digital purpose
Considering how digital banking methods are now tantamount to the normal way of managing day-to-day personal finances for most consumers, it’s clear that there are significant opportunities for banks to make digital communications a powerful differentiator and an agent of growth, as part of a seamless CX strategy.
For me, good customer communication boils down to three things:
- Quality communications–Clear, consistent, accurate and trustworthy;
- Personable communications–Unique, relevant and timely;
- Actionable guidance–Guiding, proactive and innovative.
A bank’s journey through digital transformation offers an exciting opportunity to understand how successfully the bank communicates with existing and prospective customers across each of these three areas. The bank will gain vital insights on how activities could be improved to achieve key business objectives. This examination applies to all channels that customers are using, including digital and offline.
Too often, I have come across bank staff who believe that by simply making documents available digitally for customers to review, they have reached their goal of “going digital”. In reality, this is not the case. In fact, it can be more of a hindrance than a help, as in my experience almost no one navigates online to view the documents, and for those who do, it’s rarely ever easy or customer-friendly.
Similarly, technologies such as AI can be a double-edged sword. Exciting work is being done through AI to leverage an increasingly invaluable resource: data. However, our research has found that AI-enabled tools are not a substitute for human interaction, as 85 percent of people prefer not to talk to a robot when banking and only 15 percent say they want banking providers to invest in voice-banking services powered by AI.
Putting digital communication to good use requires an enterprise-wide strategy to ensure the business isn’t focusing its efforts only on silos of tactical improvements. The strategy needs to cut across departments within all types and formats of communication across the entire customer journey: alerts, notices, consent management, letters, origination forms, social-media posts, statements, on-demand contact centre/back-office engagements, customer-preference management, product and service offers, and marketing.
Technologies such as AI and machine learning (ML) are most powerful as market differentiators for financial-services providers when looking to empower proactive customer communications—not as technology for technology’s sake but used as an opportunity to improve or even personalise communications across different touchpoints.
Banks need to use AI and ML to test and refine communications—moving beyond simply helping customers to carry out their day-to-day tasks to offering more proactive help. For example, through AI and sophisticated management of data, you might learn that a customer is happiest being able to apply for a loan without having to speak to anyone. A different customer might prefer the option of scheduling a call or arranging an appointment at a branch near his or her home so that he or she can be assisted through each step. Therefore, it should be considered that banks build a more cross-functional approach to customer service across the organisation, joining up teams to work together for their common purpose, the customer. This type of collaborative strategy delivers a more consistent and personalised communication experience for each customer, based on a deep understanding of his or her preferences.
Old-timers at a digital advantage?
Although our latest research found major challenges for traditional banks, as branchless direct-bank challengers make great strides ahead on user experience, traditional banks do still have distinct advantages in that customers know and trust them and believe they can keep their accounts safe.
In fact, while the banking industry is often preoccupied with the latest shiny innovation, 82 percent of UK banking customers say that ensuring their transactions are safe is the most important thing to them when choosing a bank. This is compared with only 35 percent who feel that new, up-to-date technologies or apps are very important. From this perspective, so-called traditional banks that are able to quickly modernise and offer a seamless user experience may be best placed to survive and thrive.
As an example, an established Top 25 bank in the United States recently launched a new direct bank to stand alongside its traditional retail bank and pick up the pace of raising deposits. The bank had an interesting strategy: to enable a digital-only customer experience by completely mitigating the need for paper documents during online account opening (OAO) and servicing. A major aspect of its customer experience involved using real-time alerts in place of traditional document-based communications. By using real-time alerts to replace document-based communications, the bank was able to push information directly to the customer using the customer’s preferred channel. This could be an email or push notification on mobile, for example. The results were impressive, differentiating the bank from its competitors and contributing to the bank receiving more than US$4 billion in deposits within the first eight months, largely thanks to its successful strategy of providing a seamless, modern digital CX.
The opportunities are vast, and the time to act is … always.
Customer communications are the very bedrock of customer experience, governance and operational efficiency. Banks must constantly—and critically—evaluate their effectiveness and take steps to ensure that they are personal, actionable and of high quality. Getting it right through an informed strategy supported with intelligent use of technology provides a path for banks to increase competitive advantage and customer loyalty, and to expand revenue growth further down the line.