Digital Customer Experience for Banking Industry- 2021

The pandemic has accelerated the shift from physical to digital many times over. If you’re in a company C-suite, you understand that this ‘digital transformation’ that everyone is talking about is crucial. But it doesn’t happen overnight and executing it on your own is an entirely different ballgame.

Because of the pandemic we have seen “2 years of digital transformation in 2 months”.

- Satya Nadella, CEO of Microsoft

While this has been hard on all industries, it is especially challenging for Indian banks that were only just beginning to digitalize.

Customer journeys have changed entirely.

Most physical banking touchpoints have now transformed into digital touchpoints. Customers' expectations, already high before the pandemic, have gone through the roof.  Consumers are used to high-quality customer experience in their everyday lives. And they expect nothing less from their banks. Think about it- what is the quality of CX that you’re used to from companies like Amazon and automobile brands. This CX is the norm now. In fact, even financial institutions have been gearing up their customer experience.

As per Forrester's India 2020 Customer Experience Index,

“American Express scored the highest for providing consistently excellent experiences to their customers, despite Covid-19".

The Indian banking industry is facing many challenges.

Regulations. Reputations. Competition from FinTech. Weak customer loyalties. And as if these weren’t enough, there is little to no differentiation in product/offerings. This is why experts believe that “an improved customer experience is a legitimate differentiator in an increasingly competitive banking sector”. (Source- McKinsey)

There is a lot of misinformation regarding what banking customer experience is. Here’s what it’s not.

·      Customer support or service is NOT CX

·      Recording NPS is NOT CX

·      Telephonically asking customers for their feedback once in a while is NOT CX.

Measuring customer experience is not a number-recording exercise. Your customer experience is the sum of ALL interactions that a customer has with your brand. This includes browsing your website, filling a form, talking to support, using your app, surveys, rating, ads, social media, and many more touchpoints.

Now that we know what CX is not. This is what an effective customer experience program looks like.

The first step is-

‍Collecting feedback at ALL of these touchpoints to understand the customer journey and behavior.

The second step is-

Using analytical tools to obtain actionable insights from customer data

And the final step is-

Leveraging these insights to improve customer loyalty, reduce cost to serve, increase CLV, and more.

Building a customer experience management(CXM) program is stressful. It’s like you have been told to get to a destination with only pieces of a map in a foreign language. How do you start?

Partnering with a CXM company that can walk you through every step of your digital CX journey is an easy solution. Whether you are just getting started or want to improve specific parts of your customer experience, an experienced CXM company can be of great help.

Digital Transformation without CX- how good intentions die

For financial institutions globally, the top strategic priorities in 2021 are-

1.       Digital banking transformation- 75%

2.       Improving Customer experience- 51%

3.       Cost Management- 43%

(Source- Digital Banking Report)

This is hardly surprising given the shift caused by the pandemic.

Creating a digital experience that is better- or at least at par with in-person experience is key to growth. For banks, successful digitalization reduces operational cost and increases reach. It also means that banks will have access to more dynamic customer data.

More digitalization = more dynamic customer data

Use it. Now is the time to make investments in the technology and programs required to deliver outstanding experience at all banking touchpoints. Data-driven programs that analyze and anticipate customer needs will empower banks with the insights required to quickly respond during times of crisis.

Sir, please put the telephone down

The only way to gain an accurate view of customer behavior, needs, and requirements is to capture ALL customer data, not just survey responses.

A dynamic, real-time CX program will give you granular, actionable, high-ROI insights. These insights will help banks create meaningful interactions and build customer loyalty, while reducing cost-to-serve and increasing CLV (customer lifetime value)

Telephonic surveys or merely recording the NPS score are ineffectual.

Tie metrics to meaning

That’s not to say that we don’t use NPS.NPS is one of the main metrics that we use to calculate customer satisfaction.

NPS helps in decoding key moments of truth, but only when you tie it to business outcomes.

Tie NPS to churn, revenue, likelihood of repeat business, customer lifetime value to get the most out of your NPS program.

Please mind the gap

Did you know as per a report by Bain &Company,

80% of CEOs believe that they deliver superior customer experience. Only 8% of their customers agreed.

Evidently, there is a large gap between what the C-suite believes and what the customers expect. This cannot be truer for the banking industry. Because of the general lack of comprehensive CX programs, banking executives rarely obtain meaningful insights into customer behavior and wants.

Financial loss due to the pandemic has led to increased customer anxieties. Historically, banks are notoriously bad at managing these anxieties. Of course, it’s not due to the lack of trying. The problem is that most Indian banks don’t have insights on all parts of the customer journey.

If you cannot point out exactly which touchpoint is causing anxiety in which customer segment, you have lost half of the battle.

Delivering outstanding experience at all digital touchpoint is the only way to grow in this economy. Because,

·       Customers stick to the same bank for a long period of time

·       Share of wallet is determined by experience

·       It is easier to upsell or cross-sell to happy customers

·       People will pay more for good experience

·       Banks can ONLY differentiate on the basis of CX

Your digital customer experience is everything

In the last 5 years, there has been a massive 35% decline in branch usage, as per Deloitte’s report. Covid-19 must have further boosted this decline.

Customer journeys have moved online and so should the feedback processes. Switching seamlessly between physical and digital customer journeys is key to the future.

The next normal will be anything but rigid. Banks must implement agile, dynamic processes that can adapt to the constantly evolving customer experience landscape.

Customer Experience that inspires growth

Now we know that Banking Customer Experience is the sum of customer’s collective experience across various touchpoint, including in-branch interaction, digital banking systems, support calls, emails, online ads, and even social media posts.

How do you ensure that you are providing consistently outstanding performance at all these points?

This is generally where a CXM (customer experience management) company comes in.

Building strong customer relationships

Here is a short guide on how to strengthen your relationship with the customers.

Step 1- Monitor customer journey in real-time

Capture all customer data (touchpoints, physical, digital, social) to obtain a 360° view of the customer journey. Integrate this CX data with your CRM process to obtain insights into customer behavior. This also shows you the entire experience history of the customer directly in your database.

Step 2- Establish strong feedback loops

Whether you are a physical or a digital bank, your frontline reps have the power to inspire loyalty. They are the faces/voices that customers interact with. So, empower your reps with real-time information and recommendations (via CX dashboards) to quickly solve customer issues. In fact, establish an alert management system to close the loop by quickly acting on customer feedback.

Step 3- Take targeted action

Taking a shot in the dark when it comes to customer-centric plans is the way of the bygone era.

With more dynamic data at your disposal, you can now prioritize areas and strategies with the highest ROI. Harness technology and analytics to anticipate customer needs for guarantee success. Once you know what is driving customer satisfaction, referral, repeat purchase, and overall spend, you can implement targeted plan to improve those parameters.

Step 4- Boost retention, reduce churn and increase NPS

Identify high-value, at-risk customers and provide meaningful interventions to retain them. Once you have an accurate insight into customer needs and expectations, you can leverage them to sustain and build lifelong relationships.

The end-goal of any customer experience program is to improve loyalty, which then automatically increases the Net Promoter Score.

The world is transforming at breath neck speed. The customer experience landscape is evolving too. The next normal is not going to be static. It’s going to be agile, dynamic and predictive. For the Indian banking sector, it’s either evolve or perish.