‘Poor Customer Experience’ is costing financial institutions $10 billion in revenue per year, a figure that was revealed in 2019 by a Fenergo research.
In the context of a troubled economic environment, cost wars, and a need for transparency, it is more than necessary that financial services seriously look at a drastic customer centricity shift to stay in the competition.
Why are financial services late with CX transformation?
Investments banks don’t go the same way as their retail counterparts.
Retail banks made their CX transformation a decade ago, trying to transform their services from pure transaction to advisory. Digital services have reduced the need to go to a branch for simple operations or meet bank employees in-person.
Until recently, investment banks could differentiate through the quality, accuracy, and innovation of their financial products. Their clients used to be loyal to one or two providers only, and trust came from the expertise of brokers and staff. But this is no longer the case and clients have become much more volatile.
There are two main reasons why high-end B2B environments are often late in CX transformation. Firstly, they like to create bespoke services per client, and fear that they would lose a good long-term customer relationship if they design journeys per customer segment.
Secondly, it is not natural for key account managers to put a value on systems rather than on their own industry or product expertise, which brings internal resistance.
What is the impact of providing a low Customer Experience?
Small and bigger customers benefit from a large range of product offers and potential providers, and can get self-care through many fintech services. Providing a low Customer Experience therefore can have a huge negative impact.
To give some examples, the onboarding time remains too much of a burden for many customers. The consequence is that they prefer to look for other partners who would provide quicker processes: 36 percent of customers leave due to a slow or inefficient onboarding, according to Fenergo.
The same impact would be faced on revenues (customers spend less when CX is poor), customer retention (they leave more often, which results in a higher new customer acquisition cost), or even employee engagement (many major investment banks such as Goldman Sachs invest in employee engagement programmes).
What can digital bring to an improved Customer Experience?
The booming development of fintech has set the scene for new digital services. Many customer pain points can be solved thanks to digital innovation. Checks and KYC make the onboarding a lot quicker and smoother.
Research and financial information become broader, more efficient, and cheaper. Information is key to be the first in proposing good investment, and everything that can accelerate the research becomes a differentiator. Gathering and analysing the data from your existing customers is also a huge help to improve the services and predict customer behaviours. Technology with platforms such as Qualtrics or Medallia have become as important as CRMs or accountancy software. To give a last example, customers want to have access to self-care apps because it quickens the simple operations processes…
These are just a few examples of how technology can improve CX. Solutions have developed very rapidly and have become a must in financial services packages.
What needs to be done on the human side?
Fintechs have changed the way investment banks can deliver valuable services and continue to create money and jobs.
It’s now time to prepare the organisation for this new world. The job has changed and will continue to change. So, how to cope with this transformation?
Putting CX transformation in place is not just about bringing digital tools into the customer journey. Customers need personalisation, the sentiment of being treated like a VIP, efficiency, self-care, and a high level of ‘human touch’ when they want it.
With my 20 years of experience in the field, I can argue that customer centricity is first and primarily an ability to behave with care. There is a specific skillset for customer culture that has to be transmitted to the frontline, back-office staff, managers, and internal coaches, and that is not common at all in investment bank environments.
In addition to this skillset, CX transformation programmes have to be put in place, to set the strategy, establish the data management, design bespoke journeys to wow customers and staff, and train and monitor.
Is your organisation already on the way? You can check where you are in the transformation CX path with this free assessment tool: DiagnostiX.co.uk.