The Digital Transformation of a bank’s customer experience

14 January 2021

Two of the major trends in banking are the digitization of processes and customer-centricity. At the intersection of these two megatrends lies a question that’s of strategic relevance for banks: How can we digitize our customer touchpoints and at the same time be close to customers in order to make them more satisfied, and thus improve our net promoter score?

A few years ago, this combination may have seemed counterintuitive: After all, how would customers trust and feel connected to their bank if there was no personal touchpoint anymore? Today, thanks to challenger banks, there remains no doubt that entirely digital offerings can indeed be very successful. Even though digital banks are gaining ground, traditional banks don’t have to change their identity completely. It’s enough to remember what they can do well and what their customers value about them – and combine these assets with the right digital initiatives.

The shift from the analogue to the digital customer experience - three success factors

The traditional customer experience of banks used to be straightforward: Customers could visit a branch for whatever financial necessity they had, whether for taking a loan, for investing their money, or for opening their kids’ very first bank account. Information was a scarce resource back then because there was not so much knowledge freely available on the internet. However, the customers knew the bank’s employees personally and therefore trusted not only that they could share their questions with them, but also receive well-intentioned and competent advice on a broad scale of financial matters.

Today, this idyllic picture is being disrupted: branches are closing, and the customer experience shifts necessarily more and more into the digital world. However, the online banking experience isn’t comparable neither to the traditional banking experience nor to the customer-centric offers of challenger banks. It is perfectly fine to make standard transactions, but it is not possible to connect with the bank and receive personal consultancy for complex requests. The bank becomes more and more replaceable for the customers. Their loyalty decreases and drives them into the arms of challenger banks.

The main reasons for which customers prefer challenger banks to the e-banking option of their traditional bank are, according to this year’s World FinTech Report from Capgemini and Efma the lower costs, higher ease of use and faster service. The most important aspect banks should focus on are probably the latter two: after all, the typical customers of traditional banks are not price-sensitive as long as they perceive a true value, true solutions to their problems and can count on good service with individual consultation – and as long as the pricing is transparent.

At the same time, there are still aspects that customers value about traditional banks that they usually don’t find with challenger banks. The most relevant aspect is probably the above mentioned personal connection: having somebody at their disposal they can rely on, and they know they can talk to about their wishes. Often it is also a question of trust and the possibility to speak with a subject matter expert in different fields. These customers value that they get individual advice and solutions for concrete problems.

So, in order to retain customers, the goal should be to make the digital customer interaction easier and equip it with a faster service. At the same time, banks must take advantage of their traditional strengths, equip their employees with the necessary skills and deliver outstanding service through personal consultancy.

Here are some thoughts on what a digital customer interaction should ideally look like, including these three success factors

An exemplary digital customer journey

Today, the first place where customers get in touch with their bank is not anymore the branch, but rather the web page or even the mobile app. Therefore, customers should have the same feeling of professionalism, warmth and security that they feel when entering a physical branch. As of today, however, it is much harder to connect with somebody on the web page – and even more in a mobile app – than directly in the branch.

Today, the customers look for the “contact” section and usually find there a form where they can write an e-mail and where they must provide information about their name, email address and phone number. An easier, faster and more personal approach would probably be to just initiate a chat directly on the web page or mobile app – knowing if the chat partner is a bot or a person and being able to choose between the two.

Another option that the customers will find on the contact space is a phone number. They take their phones, dial the phone number that they found on the web and get directed to an agent – where customers can carry out transactions but usually don’t receive a consultation. An approach that would be easier, faster and more personal could be to allow the customer to initiate a voice or a video call directly on the web page. Customers would not only save the time of grabbing the phone and dialling, but they would also see the agent (without necessarily showing their own video).

Both for the bank and for the customer this approach would have obvious and less obvious advantages. Evidently, video calls on the web would allow the agents to help the caller on another level: They can navigate the customer through the web by sharing their screens, and explain themselves better not only with gestures and facial expressions but also by drawing or sending an information file.

What’s less obvious is that banks get access to a new set of data when receiving their customer’s calls through the web. Agents could see all the information that the browser shares: What browser does the caller use? What language do they use in their browser? What’s the exact web page they’re calling from? This data would allow banks to get to know their (potential) customers better.

As of today, many banks have started to offer video consultations for certain topics. However, the experience is often far from being smooth, professional and straightforward. Banks are using solutions that have not been created for banking and therefore lead to frustrating user experiences: Customers have to download an app or a plugin first, or they cannot use the device of their choice, for example, a tablet or a smartphone. For scheduled video calls, customers are asked to wait in a digital waiting room that’s not comparable to the physical waiting room of a bank: it’s rather the interface of a corporate standard video conferencing tool giving the image of a quick fix rather than a thought-out and professional banking experience.

The role of disruptive technologies

When speaking about digital transformation, people talk in the same breath about new technologies such as artificial intelligence, augmented reality or predictive analytics. While each of them is certainly useful for several applications, the customers of banks don’t care about them. In fact, as a recent study revealed:

Companies with successful CX initiatives prioritize ‘old-school’ methods, such as talking directly to their customers, having the best talent on board, and doing market research, much more than their less successful counterparts. And they rely far less on ‘over-hyped’ methods such as chatbots, predictive analytics, and augmented reality than their less successful counterparts.

Even though this study was not focused on banking specifically, but rather on customer experience in general, the results give approval to the previously mentioned success factors. The two biggest frustrations that customers have when interacting with the company was “having to wait for a response” and dealing with employees who do not understand customer needs”.

Therefore, the most promising strategy for digitizing a bank’s customer experience is a very human strategy: enable employees with the right skill set and connect customers through the right tools to make the interaction as natural as if they were right in the branch.

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