Emphasize Experiences to Produce Profit

Jul 11, 2019

Banks and other financial institutions (FIs) are starting to believe that delivering the best possible experiences is the most effective way to win new customers, keep old customers and emerge as leaders in the new digital-first economy. A recent report from Kantar puts it succinctly: “Customer experience is what makes or breaks brands.”

It’s an idea that isn’t particularly radical or new, but it has only recently been embraced as a stand-alone strategy for companies in the industry. The changing consumer expectations are driven in large part by evolving technology that facilitates more personalized and tailored engagement, and FIs are playing catch-up compared to companies like Amazon, Netflix and other leaders of experiential excellence.

Moving Customer Experience Beyond Digital-Only

As noted above, that shift in expectations is facilitated by improvements in the underlying and supporting technology. But paradoxically, as the Kantar report also notes, “analog and human scale are picking up as people demand experiences that are deeper, more engaging and more meaningful.”

From a banking perspective, how does that translate? You’ve heard time and again that digital transformation is the key to long term success, but what about delivering on the human side? It all comes down to the key question: how can you become the bank your customers want?

Become the Bank Your Customers Want

There are concrete steps you can take. First, knock down barriers between silos of business in your company. We noted in our blog that “research from the Temkin group shows potential revenue growth for FIs at 27.5% in just three years when organizations improve their customer experience.[i]” By breaking down walls between lines of business, you can develop holistic picture of the customer that allows you to personalize conversations, product and service recommendations and more.

Second, move from providing financial products to offering financial services. While this is a subtle distinction, it is one that can pay big dividends when implemented correctly. We addressed this as well in a previous blog post, but it’s worth addressing again, specifically with younger banking customers.

Peter Schaus, president and CEO at CCG Catalyst group, notes in an American Banker article that “[m]illennials want their banks to advise them. They want advice on how much to save and budget. Banks need to redefine the relationship they have with customers.” In the current commoditized market, the most successful FIs will be the ones that focus on the advice and service sides of a relationship – not just rates and deposit amounts.

Third, recognize that the shift in consumer and behavior extends beyond digital devices. Companies are undeniably going through a digital revolution, with new apps, online portals and branch improvements. But the digital revolution is not the same thing as the customer experience revolution.

The digital pieces are important, but they only play a supporting role when it comes to delivering the experiences your customers demand. We recently heard this first-hand, during a podcast interview with leaders at First Interstate Bank.

In that interview, Renee Newman, EVP and Chief Banking Officer, along with Josh Botnen, Director of Digital Strategy and Client Experience at First Interstate, shared the story of their bank’s transformation as they worked to update and roll out their meaning of customer experience. If you have not heard the interview yet, it’s worth a listen.

One takeaway from all their customer surveys and focus groups? When things go wrong for a customer, or they have a question, they want to be able to talk with a real person. Even the relatively new digital bank Simple, which boasts its branchless model, addresses this need right on their website:

“You’ll never lose the close, human-centered experience of banking at a local branch thanks to the friendly crew of customer service agents hailing from Simple’s homebase. Talk to a real human every time you call. Seriously! Try it now. They love saying hello.”

Some Banks Are Getting It Right

That very same Kanter study notes that there are definitely banks that exceed customer experience expectations. The top five include USAA, Regions, Chase, BB&T and Citizen’s Bank. And bank CEOs agree, with 91% reporting that they believe a customer-first emphasis is key to growth.

But customers see things differently. Only 31% of the customers surveyed in the report felt that their bank puts the customer first, which clearly indicates a breakdown in the vision of the C-suite and the execution across the organization.

There is no question that there is room to improve. And the banks and FIs that take those concrete steps to emphasize CX will be the ones to capture the hearts – and the wallets – of customers in the future.

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