Customers evaluate the businesses they interact with everyday on a variety of factors, including price, quality, and the overall customer experience. Creating a positive customer experience (CX) is for all types of businesses, including essential services like banking.
Picture this: a customer who just bought a new high-end phone might get annoyed navigating a website they feel has a poor online shopping experience. But after making their purchase, the phone is high-quality and they won’t need to go back to the website. While they could be more satisfied, they are unlikely to suddenly change phone providers because of the website’s online store. By contrast, that same customer does all of their banking online, and since they’re visiting that website over and over again, they’re much less likely to let it slide.
Essentially, firms that provide necessary day-to-day services like banking are often evaluated more strongly on their customer service than retailers that simply sell physical products.
To help banks improve their CX, this article will answer foundational questions about CX in banking and explore seven promising trends in the field:
- What is customer experience in banking?
- What do customers expect from banks?
- Why does customer experience in banking matter?
- 7 Promising Trends in Customer Experience in Banking
To improve CX at your bank, you’ll need to have the right CX solution to collect responses and measure your program’s results. Find a CX platform that will act as your partner in improving your CX program.
What is customer experience in banking?
Customer experience encompasses all of the touchpoints a business has with a customer that form the customer’s overall impression and feelings towards that business. These contributing touch points include all interactions from initial discovery to long-term retention.
In banking, customer experience will primarily revolve around convenience and frictionless customer service interactions. This means banks interested in improving their CX should look first to the common interactions that occur as part of the recurring service they offer, such as ease of making payments, viewing accounts, and getting in touch with customer service.
What do customers expect from banks?
Customers enjoy sharing their opinions about a variety of topics these days, banking included. Negative word of mouth can harm a bank’s net promoter score and lead to reductions in customer acquisition as well as retention issues, due to losing the customers making the initial complaints.
To avoid these issues, banks need to familiarize themselves with their customers’ expectations in order to meet their needs and develop a positive customer experience.
For banks, the most common expectations customers will have include:
- Secure services. Trust is an essential part of many business-customer relationships, and this is especially true in banking, wherein customers trust banks to protect their extremely sensitive financial information. This can go further than just behind-the-scenes security measures, as many customers also appreciate banks that take proactive steps to alert them about ongoing scams and potential fraudulent activity.
- Quick help and responses. When a customer does need help from a bank, they will likely be in a hurry and looking for a quick answer to their question. For some customers, this might be solved by sufficient self-service tools, while other customers may need short wait times to speak to a knowledgeable customer representative.
- Ease of use. Customers expect to be able to access their bank account however they need on demand. With advances in online and mobile banking, banks should consider how CX expands to their online presence and can contribute to the overall convenience of banking with their organization.
This is by no means an exhaustive list of everything customers will need or expect from their bank. Many customers may be interested in just a few essential services, while others may prefer to bank with an organization that regularly rolls out new products and provides proactive support.
Why does customer experience in banking matter?
Improving your bank’s CX is necessary for staying competitive, as reports show that 70% of financial service companies are investing in CX transformation. Financial organizations that have completed a CX project have seen noted improvements in their customer ratings and revenue.
These improvements have been timely as well, as reports on Millennial and Gen Z customers have shown a significant decline in satisfaction as compared to prior generations, with only 57% of Gen Z feeling satisfied or very satisfied with their bank and 28% of Millennials considering switching primary banks.
To retain these important customers and stand out from the competition, banks can turn to their CX strategy to make targeted improvements their customers will notice and appreciate.
7 Promising Trends in Customer Experience in Banking
Banks are continuously evolving their approach to CX to accommodate new customer preferences and incorporate emerging technologies. Here are seven trends to keep an eye on. Consider how they could apply to your own approach to customer experience in banking.
1. Omnichannel Marketing
Banking is a part of everyday life, and customers prefer banks that provide them the flexibility they need to access their accounts when they want, where they want, and how they want. For many customers, this will mean online and mobile access, but there is still a role for brick and mortar locations.
Given the need for on-demand banking, banks are expected to have an omnichannel presence, meaning they are available on every platform a customer might use to seek their services. However, an omnichannel approach has now become standard for many banks. To stand out, you need to instead consider not only if you should offer access across multiple channels but also what type of experience customers can look forward to on each channel.
Here are a few aspects of customer experience to consider on these primary channels:
- Brick and mortar locations. Customers who prefer to go to a physical location to do their banking are likely looking for more hands-on assistance. Banks with short wait times and knowledgeable, friendly staff will help create frictionless experiences for these customers. For instance, when a customer is being assisted, if that staff member can solve all of their concerns without needing to double check information with another member of your team, the interaction will go much smoother.
- Online banking. Your website allows customers to complete transactions, deposit checks from their phones, and view their accounts, but many customers will also look to it as the main hub of information about their accounts and your services. Customers who experience technical issues, have questions about their accounts, or are curious about opening a new account with your bank will likely look to your website for information first.
- Mobile banking. Mobile banking is the fastest, most convenient way for customers to manage their accounts. Customers who prefer mobile banking value the ease of using an app, but are likely also concerned about how banks are making their apps secure.
While maintaining a positive, consistent customer experience across all of these platforms is essential, note that 78% of Americans currently prefer to bank online. This number includes both online and mobile users, meaning that while brick and mortar locations do still matter, a majority of your customers will interact primarily with your bank through virtual platforms. Fortunately, the banking industry has been making significant strides in improving online CX—make it a priority for your bank if it hasn’t yet been!
2. Pilot Programs
It’s easy to get excited about launching a CX program or trying out a new CX strategy, but banks that try to overhaul their entire CX program all at once often fail to see results. This situation isn’t exclusive to banks, either, as many organizations will have trouble getting started with CX due to overextending their resources, having limited buy-in from leadership, and possessing a limited understanding of on-the-ground customer interactions.
In contrast, banks that have seen success with new CX programs have one thing in common: they start with small pilot programs that target specific pain points first.
While starting small may feel slow, this process is ultimately so effective because it helps new CX teams earn quick wins that can be used to create a strong story to present to stakeholders.
For example, let’s say a bank’s new CX team starts by mapping major pain points and discovers that customers are dissatisfied with the bank’s mobile app. By collecting targeted feedback, they discover that customers feel the mobile interface for transferring funds between accounts is too confusing and has even caused customers to miss payments on their credit cards. The CX team works with the bank’s UX team to design a new interface based on customer feedback, which leads to an increase in mobile transactions and fewer complaints.
The CX team could then present this specific scenario to leadership and explain how CX strategies drove the solution. With the improved metrics and a strong story about the customer frustrations and CX solutions, the team will have a strong foundation for making their case to leadership and attaining buy-in for more expansive strategies in the future.
3. Creating Customer Experiences With Empathy
Personal finances tend to be an emotionally fraught topic because of their inherent importance. Many customers may even feel a great deal of stress and anxiety around interacting with banks and handling their finances.
As such, one of the strongest indicators in whether a pain point will make or break a customer relationship is how the bank reassures customers and handles the emotional aspect of their customer journey.
To help your bank better approach these moments and ensure you’re treating customers with empathy, try taking these steps:
- Analyze emotions associated with pain points. While frustration is the most common emotion that occurs when customers encounter pain points, be conscious of other emotions associated with specific events. For example, when a customer receives a fraud alert, they’ll likely be fearful and nervous for the safety of their account. Or, when a payment fails due to an insufficient balance, customers may feel embarrassed.
- Develop empathetic approaches. Consider how specific emotions are likely to impact how a customer responds to common pain points. For instance, in the example of the payment failing due to an insufficient balance, the customer may deflect or hesitate to explain why they think the situation occurred to hide their feelings of embarrassment. In these emotionally charged situations, take these feelings into account to use language that shows empathy and consider how various actions might be viewed by customers in distress. For example, a customer experiencing the failed payment may prefer a more analytic approach that avoids placing fault, whereas someone who just experienced fraud would likely appreciate a more openly comforting approach to reassure them.
- Partner with your customer service team. Your bank’s customer service team will be at the heart of many of these emotionally charged moments. As your CX team seeks to improve customers’ emotional journeys, ensure you are collecting feedback from your frontline customer service team, as well. They will likely be able to offer insights into the everyday interactions they have with customers, common problems that occur, and solutions they’ve found to be helpful.
Accounting for the emotional journey should be a core part of your CX strategy. One of the major benefits of a CX program is the ability to identify customers who have had a negative experience during a pain point and quickly respond to help retain them.
These customers who have already had a negative experience and shared their feedback will have their own feelings formed when a member of your team approaches them to fix the situation. Anticipating this and having strategies ready for these emotions will give your managers one more tool in their arsenals to resolve these situations.
Organizations that are giants in their fields like Amazon and Apple have millions of customers, but they can credit their success to their ability to provide a personalized experience for each of these customers.
Today, customers increasingly expect businesses to create personalized experiences with, 90% of U.S. customers claiming they respond positively to personalized marketing.
What does personalization look like for banks? Currently, banks are trying out a few strategies, including:
- Proactive assistance. Instead of waiting for problems to occur, some banks are using advanced analytics that provide insight into customers’ behavior. The reports from these analytics can indicate customer concerns and topics of interest, allowing banks to provide them with the resources they need—such as educational guides, product offers, and automatic alerts—before they even have to ask. For instance, a bank might send a customer who just had an experience dealing with fraud information about setting up two-factor authentication and mobile alerts for withdrawals over a certain amount.
- Targeted marketing. Put the data you’ve collected from customers to use to offer them the products that appeal specifically to their interests. For example, a customer who has been searching for new cars may be interested in your auto loan program.
- Respond to feedback. Regularly send out feedback surveys to your customers to understand how they feel about various interactions they have with your bank. If a customer responds to a feedback survey negatively, the bank should act upon their feedback as quickly as possible to get in touch with the customer, reassure them, and work out a solution to their specific problem. Unlike general satisfaction surveys, these surveys should not be anonymous so your bank can quickly get in touch with specific customers.
Banks can facilitate personalized experiences by maintaining customer profiles. When a customer opens a new account, fills out a survey, contacts your customer service team, or interacts with your bank in any other way, take note of it in their profile in your CRM. Then, the next time you interact with that customer, your bank will be able to use past information to create a customized experience based on their preferences.
5. Efficient Onboarding
Few people want to devote their entire afternoon to opening a new bank account, but many of them are resigned to doing so.
This means that a bank that promises an efficient onboarding process can stand out in a positive way from their competitors.
To start customer relationships out on the right foot, banks have been striving to improve their CX by experimenting with online onboarding. This virtual process includes automated screening, allowing customers to open their accounts faster than they could if they otherwise had to wait for an onboarding team to review their documents.
Speeding up the onboarding process shows customers that your bank is devoted to creating efficient, frictionless experiences. Plus, the easier it is to get started with your bank, the easier it will be to sway customers to switch banks and create a new account with you.
Chatbots are possibly one of the most contentious advances in customer experience in banking, but when used well, they are an undeniably effective problem-solving tool.
Many customers prefer to efficiently resolve issues they encounter themselves with self-service tools. When they do need additional help, few customers appreciate being put on hold, and excessive waiting can further frustrate a customer already experiencing a pain point.
As such, banks have been experimenting with chatbots to respond to common customer questions in seconds. To set up a helpful chatbot, banks will need to identify common customer issues that can be resolved through a chatbot and self-service tools. For example, chatbots are a great solution for answering questions for customers who can’t find, or don’t want to bother looking for, your FAQ directory.
On the other hand, your CX team should also determine what parts of the customer journey require a human touch. This will help appropriately divide customer traffic between chatbots and your customer service representatives, ensuring customers experiencing serious issues will be elevated to a member of your team who can help them immediately. This means helpful chatbots can benefit customers who do need to reach a member of your team, as well, as they’ll have shorter lines when more customers can get help through your self-service tools.
7. Employee Experience
A strong employee experience is often key to a positive customer experience. Employees who like their work environment have a stronger incentive to work hard and deliver the best experience possible to customers.
As mentioned, your bank’s team often has to handle frustrated customers and high-stress situations. Creating an environment where they feel supported and ready to work can improve retention, productivity, and customer experiences.
The employee experience is primarily determined by three factors:
- Day-to-day experiences. Just like CX, all of the interactions employees have with your business on a daily basis make up their experience. These include their daily tasks, their relationships with managers and coworkers, and how well the tools they use allow them to complete their work.
- Workplace culture. What mindset does leadership encourage employees to have? Does leadership focus on stoking competition between departments, emphasize your whole staff is a team, or that no matter what, customer needs must come first? Take a close look at workplace incentives and how they color interactions between coworkers, direct reports and managers, and different teams.
- Company goals and priorities. Think of your bank as a boat—everyone has a paddle and they all need to be pushing in the same direction if you want to make any progress. Ensure your team knows your bank’s overall goal and are motivated to do their part in achieving it.
Many of the strategies that help improve CX also apply to employee experience. Learn how employees feel about your bank by sending out surveys that ask specific questions about workplace culture, what motivates them, and what changes could be made to help them be more efficient, successful, and satisfied in their roles.
Customers’ needs are constantly changing, and CX professionals in banking are discovering new ways to meet them. Improve your bank’s CX program by following promising trends, identifying strategies that could work for your bank, and making sure you’re always listening to your customers.
Creating frictionless experiences for customers requires a full understanding of what goes into a successful CX program. To help deepen your bank’s knowledge of CX, try exploring these resources that cover more specific aspects of CX:
- Customer Advisory Boards (CABs): Frequently Asked Questions. Does your bank need more focused feedback? Are there specific high-impact customers whose input you want to prioritize? If so, consider using this resource to set up a customer advisory board.
- What’s a Customer Journey Map? Template & Crash Course. Understanding every step your customers take when interacting with your bank should be your first priority for creating a CX program. Learn how to map customer journeys with this guide.
- Closed-Loop Customer Feedback: How to Drive Real CX Results. Many businesses collect feedback but have trouble creating an organized system to respond to it. If this applies to your bank, use this guide to discover practical steps to ensure you’re closing the loop on customer feedback.