Event oriented customer experience

Creating a better customer experience in the Banking and Financial Services industry

In my previous blog, I took a look at some of the major areas Financial Services needs to address to deliver the experience their customers demand. This time round I’m going to focus on the most fundamental change that you need to make to fully benefit from your customer experience investments: the move from a transactional to an event-oriented relationship with your customers.

Last time, I mentioned the excellent ‘Improving the Customer Experience in Banking’ report that found most retail banks were unprepared to meet the needs of growing customer expectations. While CIOs talked about customer experience, their investments were, in practice, aimed at delivering traditional business outcomes such as greater business efficiency or increased share of wallet.

For Jim Marous, publisher of the report and The Financial Brand, the result was that “the objective of delivering a positive customer experience has become secondary to other bank priorities, resulting in a transactional banking relationship to the customer”.

Putting the cart before the horse

It’s clear that things have to change. The massive investments that Financial Services companies are making in customer experience are yet to fully deliver. In fact the report found that, in one banking sector, a quarter of respondents thought their customer experience program had a negative impact on their business. To change to a more customer-centric business model, Jim Marous suggests five areas that all Financial Services companies must prioritize (I’ve added the last bullet myself):

  • The focus of digital engagement has to move from reducing cost to enhancing experience
  • Banks must leverage advanced analytics, machine learning and contextual engagement to provide a highly personalized experience
  • There has to be an omni-channel experience where customers can engage when, where and on the device they prefer
  • Sales and support staff must move from reactive to proactive engagement
  • There has to be continual engagement throughout the customer journey, from research to purchase to onboarding to relationship expansion
  • Banks must automate their back-end business processes so they don’t add complexity when they embrace new channels and business models

I can’t argue with any of those points – especially the one I added – but I can’t help feel there’s an important step before any of this becomes relevant. You need to really understand your customer and tailor your products and services to their preferences and behaviors.

Towards event-oriented customer service

In another excellent report, ‘Evolving the customer experience in banking‘, Bain & Co found that customers prefer to use digital channels when dealing with routine tasks – checking a balance, for instance – but preferred the human touch when the task had a more emotional dimension – such a mortgage application. Great customer experience starts by simply working out how your customer wants to engage with you given what they are trying to achieve.

The traditional Financial Services model based around managing the transactions of specific and individual products and services makes this extremely challenging. Instead you need to move to an event-oriented approach. What are the events in customer’s life where they will need you? How do they want to engage with you when a specific event occurs?

Every customer engagement is an event. ‘How can I check my balance?’ has to be factored into your relationship in the same way as ‘What’s the best mortgage for me?’. This becomes a continuous, on-going relationship. The customer feels they are always in control but you have visibility of their journey. You have the ability to can proactively offer appropriate products and services.

This is even more important as Bain & Co found that only 20% of US banking customers who bought new products from other Financial Services companies had been actively researching before the purchase. They simply got an offer that was too good to refuse. Worse still, half of those who bought from another bank said they would have bought from their primary bank if the bank had made an offer – but it didn’t as it didn’t know enough about the customer to make that offer. When you consider that the primary is mostly likely providing low-margin current or credit accounts and it’s the others that get the higher value financial products, this is a situation that has to change.

Different customer events require a different blend of digital and human processes that are tailored to the specific event. The design and management of the processes and systems to support each episode requires small, cross-functional teams focused on one episode or a small sub-set of related episodes. However, you do have to get the basics right.

For example, if you understand how many routine tasks your customers want to conduct digitally, you must ensure that your digital channels effectively enable this. Bain & Co. research found that only 45% of respondents said their primary bank’s websites were easy to use and let them do everything they wanted. In the US, 40% of respondents went to a branch office at least once in the previous quarter. Enhancing customer experience can be as simple as ensuring that customers can conduct all the routine tasks they want online or on their mobile device.

The result, of course, is that you reduce what Bain & Co describes as ‘bad call or branch volumes’ – simple transactions that are better accomplished digitally and that customers are more than happy to do in this way. Freeing your staff from these tasks allows them to concentrate on higher value tasks or higher value customers. This is where the human touch will bring greater reward.

If you can successfully transition to event-oriented customer experience, Bain & Co reports impressive benefits:

  • Routine transactions that require bank staff cost 20 times more than online or mobile
  • Over half of customers say that they would prefer to buy from their primary bank if it made an offer when they were looking for new products or services
  • The top 5 banks in Mexico can save $500 million from branch and call centers if they performed to international benchmarks for digital services
  • Banks gain greater loyalty by reducing the volume of unnecessary transactions, making routine transactions easy and convenient and improving the service experience for more emotive events
  • Only half of customers try digital first for emotive events and only a quarter succeed. When they switch from digital to human channels for these events, customer satisfaction scores increase

Using analytics to drive insight

The greatest weapon that a Financial Service company has is the vast amount of data that it is amassing on all its customers. The more value you can derive from Big Data through advanced analytics the better positioned you are to deliver highly effective, highly personalized customer experience. This begins by overcoming one of the recurring challenges that Financial Services firms have faced for many years: creating a single view of the customer. Using a combination of AI and analytics enables you to access information from all data – structured and unstructured – held in many different repositories inside and outside your organization.

You can begin to make sense of all the data you have and turn this to insight into your customers’ mindset and preferences. Once you know how to engage, reward and communicate with each individual customer, it becomes much easier to cross and upsell in way that means you don’t miss the opportunity entirely.

Moving towards an event-oriented approach will ensure that your customer experience investments will align closely to customer demand. If you’d like to find out more, join me at OpenText™ Enterprise World 2018.

Gerry Gibney

Gerry is Senior Industry Strategist for the financial services industry, with over 25 years' experience in banking and investment management. Before OpenText, he worked at Fiserv Investment Services Group and Microsoft. He is a Certified Financial Planner (CFP).

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