The banking industry is ripe for change. Customers are more demanding due to the improving experiences they have in other industries, regulators are on the charge to re-establish trust and booming fintech is decreasing the cost to serve customers argues Martta Oliveira
Retail banking is under pressure to deliver better customer experiences across the board.
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Some parts of the industry are catching on, but others lag. Our latest annual Customer Experience Survey shows the polaric nature of banks’ performance – although scoring fourth (out of 14) for best customer experience, they also scored seventh in worst customer experience.
Nurturing Relationships with Customers
The difference in cost between maintaining and acquiring customers is making customer loyalty a number one priority for many organisations. In banking, the benefit of building a relationship with a customer goes beyond the reduced cost of retaining one.
The true benefits of nurturing relationships are seen when customers start to trust a company for more products. For example, single-trip travel insurance turns into health insurance, a current account into a mortgage, and a pension fund into life protection insurance.
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By GlobalDataThrough our experience we’ve identified three ways for banks to build lasting relationships with customers: by designing the experience for simplicity, context and consistency.
1. Design for Simplicity
Customer effort can predict customer loyalty. The less effort customers put into a relationship with a company, the more likely they are to remain with them.
Through experience with other industries, customers are used to quick, easy and smooth experiences, and a growing number expect exactly the same from banks. Customers have become exhausted, frustrated and angry with services that should seem straightforward on the surface, but are actually overwhelmingly cumbersome. A brilliant publicity stunt by Tandem Bank brings this problem to life.
Ease isn’t something that should be designed only for customers. Research shows that services that are easy to deliver for employees, translate to services that customers perceive to be simple.
Design the complexity out of the experience. Think your Customer Journeys through so it makes sense to customers, and mimic the smooth experience they have with their favourite companies. Although the bar for simplicity in banks is being raised with the like of TransferWise, Mondo and Atom, benchmark the best experiences in other industries to really drive simplicity and impress your customers.
2. Design for the context
Financial products are complex and hard to understand. Designing for the customers’ context makes it easier for them to grasp the value of what they’re considering purchasing, changing their attitudes to financial products, and motivating them to engage with you. This is important because engagement is a great indicator they’re looking to build a long-term relationship.
Customers don’t always fully grasp how much companies know about them, but they’re aware that companies know a lot about them, so they’re beginning to expect this information is used to serve them better (when the permission is granted).
Banks have access to historical customer data, have large computing power and data processing capabilities. This paired with the technological developments in automation and AI enable services to be tailored to customers’ context, behaviours and characteristics. However, the possession of a great technology doesn’t necessarily build great customer relationships, it’s the right application of it, at the right time, that does.
Understand your customers’ needs and how they behave throughout their end-to-end journey. Knowing what your customers need through this holistic perspective will allow you to harness technology to best use customer data to meet their needs and drive engagement.
For example, Atom bank has created a dynamic and predictive monthly statement showing customers how much they’re likely to spend on what in the next month, and recommend tailored financial products that meet these needs.
Zurich UK Life’s widely publicised initiative placed customer needs at the centre of the critical life claims process. Agents were granted a budget to show they care when dealing with customers who’ve been diagnosed with a critical illness. Twenty-two new initiatives were launched to help speed up the payment process, including increased use of text and email to communicate with customers, dedicated claims specialists and direct credits to customer bank accounts.
Zurich realised it wasn’t just about getting the basics right but going beyond customer expectations. Most notably they wanted to challenge the perception that claims don’t get paid or that it can take an unnecessarily long time. This led to a 25% decrease in claims to pay-out time and engendered lasting customer relationships through trying times.
3. Design for consistency
Customers are more likely to become loyal when a service is delivered consistently well. This implies that from one end of the customer journey to the other, across channels, the service level is reliable. Indeed, banking customers that use a variety of channels are 15% more likely to be brand advocates than digital-only customers.
Customers also experience consistency through service continuity – they expect to be able continue something in a channel different from the one they started in. If they begin their search for mortgages on a computer, they expect to be able to continue it over the phone and complete it at a branch.
Customers also expect the experience to be consistent across products at the same bank. The current account experience should be similar to the home insurance and wealth management experiences.
Behind the scenes these products might be offered by completely separate departments, or even other companies, but customers don’t always understand this. Design for a reliable consistent experience they recognise.
To achieve this consistency its important there’s a company-wide customer experience vision and service principles that guides service across all channels, and throughout the whole customer journey. This philosophy was brilliantly employed by Virgin for the award-winning customer experience initiative “Voice of Our Brand.”
So, build long-lasting relationships with customers by designing for…
- Simplicity – so they choose you over competitors because it’s so easy to do business with you;
- Context – to hook them on your service because it’s relevant to them and their world, and
- Consistency, so they know they can rely on your service.
Martta Oliveira is senior service designer at Engine Service Design
