Every day customers are experiencing new technologies and new ways to engage with various service providers. With each interaction of the customer with these innovations, the expectation from any other company accelerates — a few of the innovations that customer love is Amazon, Netflix, Uber, WhatsApp, and now Spotify.
This story goes by with financial institutions as well. Gone are those days when people used to stay longer with their bank than their life partner.
Today, larger banks are no more competing with the archrivals but instead are going after the customer expectation from the last app the customer used.
As a matter of fact, fintech and challenger banks have built billion-dollar businesses by providing exceptional customer experiences. But are they any better, or is it all clever marketing?
Let’s find out and understand the banking customer experience strategies to make your customer experience your strongest competitive advantage.
The banking experience (or banking customer experience) is the overall ease of interaction of a customer along the entire customer journey from opening an account to closure.
In order to deliver delightful customer experience, it is significant to meet the expectations of a customer by providing a frictionless experience across channels by being
- Highly contextual and relevant to the customer
- Realtime analytics to provide products & services
- Distributed Omnichannel presence
- Highly scalable to create defining moments
- 24/7 open for customer queries
In the fast-paced digital economy, customers demand their banking services on their fingertips. With banking being such a commoditized industry today, customer service is the only competitive advantage left.
To put it point-blank, the result of better customer experience is better financial outcomes. And, being a trusted digital partner in providing superior customer experience in the banking industry, we’ve witnessed how big of an impact it has for a bank’s financial success.
Naturally, that includes monetary gain!
Let us look at some of the recent banking customer experience trends from industry experts.
- World Retail Banking Report 2020: 57% of consumers prefer internet banking in the Covid-19 era
- According to McKinsey, half of US banking customers engage digitally infrequently or not at all and need extra support to make the transition
- Shopping for new products and account openings are normally the least satisfying retail-banking journeys, according to Mckinsey.
- According to Accenture Banking 2020, more than 30% of consumers switched their bank providers in the past six to 12 months due to highly competitive pricing, high customer service quality, or good value for money.
- The same report from Accenture Banking 2020 states that 61% of banking customers expect to have access to more online interactions across their entire customer lifecycle.
- The Capgemini World Retail Banking Report found, only 37% of customers believe that banks understand their needs and preferences adequately.
- According to Salesforce, 62% of consumers expect companies to adapt based on their actions or behaviors. The same study found that only 47% of consumers believe they are receiving this level of personalization today.
As banks rush to transform their customer experience now than ever due to COVID-19, it’s easy to miss out on a few areas.
Besides, banking as an industry has its own customer experience trends and challenges — from the regulatory landscape to security best practices.
Let us look at some of the CX strategies that challenger banks follow.
The neo and challenger banks are significantly faster when compared to traditional financial services. In order to achieve this, banks and credit unions must consider these steps below.
- Create memorable account opening experience
- Enable account opening through the mobile app
- Reduce number of clicks to open an account
- Digital KYC & verification
- Minimized data collection
The last time I paid someone in cash was two years back. And, with the ongoing pandemic situation, no one is willing to transact in-person. Sending money through net banking and mobile apps is the new norm today.
It is important to make sure you are ready to compete with mobile-only companies who follow these practices.
- Faster & secure payment processing
- Consistent & well-designed UI for better UX
- Gamification of payment process with offers
- Provide faster notifications
- Handling errors well
With everyone going digital, the threat of attackers and banking fraud amplifies. It becomes more critical for the banks and credit union to be proactive in helping the customer to block or freeze the card/account before the threat.
Banks and credit unions should give confidence and safeguard their customers by
- Educating customers on when to block card/account
- Easy accessibility of functions
- Dynamically suggesting next steps
- More pro-active anti-fraud notifications
Most of the banks and credit unions do have a great branch customer support staff and an offshore team. But that wasn’t enough to tackle the flooding customer requests in this pandemic scenario.
The challenger banks & fintech — who don’t have a physical branch are managing this situation way better.
Things that banks and credit union can adopt for the future are
- Stop the stone age methods, “Press 1, followed by a hash…”
- Allow direct options in-app to connect to support staff
- Get rid of the hold music & personalize as per customer
- Show customers where they are in the queue
Open banking is still very early and adds up very minimal in customer priority. Yet, it can be a game-changer and potentially disrupt the way we bank.
In short, open banking can help banks & fintech to reduce customer churn by sharing customer data to fintech companies with customer consent for personalized offers, digital payments, money management, and lots more.
Digital-only banks are also known as challenger banks, are changing the whole landscape of customer banking experience.
Some of the major challenger banks across the globe are listed below.
Chime is an American technology neobank company that provides fee-free financial services through a mobile app.
In contrast with traditional consumer firms, Chime has no physical branches and does not charge monthly or overdraft fees. Account-holders are issued Visa debit cards and have access to an online banking system accessible through chime.com or via the mobile app for Android or iOS.
Revolut Ltd is a British financial technology company headquartered in London, United Kingdom, that offers banking services.
Revolut offers banking services, including GBP and EUR bank accounts, debit cards, fee-free currency exchange, stock trading, cryptocurrency exchange, and peer-to-peer payments.
Revolut’s mobile app supports spending and ATM withdrawals in 120 currencies and sending in 29 currencies directly from the app. It also provides customers access to cryptocurrencies such as Bitcoin, Ethereum, Litecoin, Bitcoin Cash, and XRP by exchanging with 25 fiat currencies.
Monzo Bank Ltd is an online bank based in the United Kingdom. Monzo was one of the earliest of a few new app-based challenger banks in the UK.
Initially operating through a mobile app and a prepaid debit card, in April 2017, its UK banking license restrictions were lifted, enabling it to offer a deposit account. As of March 2020, Monzo had over 4 million customers.
Great customer experience is the new currency. Customers are no more interested in physical retail banking. It is very important to personalize each customer interaction, provide frictionless banking experiences across channels, humanize digital engagements, and improve trust on an ongoing basis.
And, if you’re a retail bank or financial institution who’s concerned about the quality of customer experience in your business, reach out to us.
Zuci is revolutionizing the way software platforms are engineered with the help of patented AI and deep learning models. Learn more about Zuci at www.zucisystems.com
About the Author
Janaha Vivek is Senior Marketing Executive at Zuci Systems with expertise in Financial Service Industry with a background in marketing and sales. He is extremely passionate about new technology, innovation, and learning the unknowns. Check him out at LinkedIn.