Financial Institutions Refocus Customer Engagement as Highest Ever Customer Complaints Recorded
The recent Financial Ombudsman Service customer complaints report made for bleak reading for financial services as complaints hit a five-year high, with payday loans complaints surging 130% . The implications for traditional banking heavyweights are quite apparent.
Dr Gero Decker, Co-Founder and CEO of Signavio notes that financial institutions can no longer anticipate a comfortable unchallenged position, with modest expectations from customers in terms of their banking experience; and retained loyalty based on traditional relationship banking models.
Gone are the days when customers opened a bank account and remained a customer for life. Now customers are willing to swap and change who they bank with at a click of a button.
Poor customer service cost UK businesses £37 billion[1] in 2018, a significant increase of £31 billion from the previous year. New agile FinTech entrants who offer a streamlined, customer-centric experience are threatening traditional banks; with 20% of market share potentially compromised.
How then can traditional banks rise to the challenge of delivering a superior customer experience amidst the evolving boundaries of customer expectations?
Poor customer service cost UK businesses £37 billion[1] in 2018, a significant increase of £31 billion from the previous year.
For starters, financial institutions that seek to retain their leadership position in an increasingly saturated market, must prioritise customer centricity across all their processes and ensure these business processes are directly connected to the customer experience.
Serving customers remains the central goal for banks, and the best way to retain customer loyalty is to understand every touch point of the customer journey.
As customer service evolves to become the new battleground for the financial services sector, the customer journey must be placed at the centre of operations, connecting customer knowledge with everyday operational realities. This will allow banks to deal with the record number of complaints, all the while remaining competitive.
Traditional banks need to think beyond customer experience, to a broader measure called customer journey mapping. Customer journey mapping places each and every one of their business processes firmly centred on the needs of their consumers. Creating a system which records all incoming complaints, categorises them and identifies their root cause. Customer journey mapping when utilised effectively, encourages banks to visualise all elements of customer experience, viewing interactions from the perspective of the consumer and ultimately reorienting all decisions around customers.
Banks should also look to empower employees across various departments, assuming they will become more unified as they use customer insights to identify bottlenecks and eliminate duplication of efforts.
Banks should also look to empower employees across various departments, assuming they will become more unified as they use customer insights to identify bottlenecks and eliminate duplication of efforts.
Leveraging customer data to construct a real-time picture, allows banks to see the entirety of the journey from both internal and external perspectives offering full visibility over existing customer pain points. This unique product viewing lens through the eyes of the consumer provides game-changing insight likely to result in an enhanced customer experience, lower operational costs and ensures banks’ ability to deliver on its promises.
Mckinsey research[2] shows that superior customer experience raises the likelihood that a customer will increase deposit balances, open new accounts and products at a bank. In the realm of trust and loyalty, customers can be your biggest advocates, providing the much needed competitive edge in an increasingly saturated market.
Through aligning customer journeys with internal processes, traditional banks effectively shift the mindset from internal efficiency to external, customer-driven success. The challenge put to them by agile new entrants have in a way provided traditional players with a scrutinising scope into the future of their industry, by increasing the standard for best practice. It is important they embrace the customer journey as a fundamental strategy, supported by an intelligently organised, clear operational performance metrics informed by customer feedback.
[1] https://www.ringcentral.co.uk/blog/dissatisfied-customers-cost-businesses/
[2] https://www.mckinsey.com/industries/financial-services/our-insights/customer-mindshare-the-new-battleground-in-us-retail-banking
