Poll after poll indicate that banks really do want to improve their customer’s experience.  Poll after poll also tell us that customers want their financial institution to know them, look out for their financial well-being, and reward them for their loyalty. Then there are the sobering polls that tell us that it isn’t happening.

According to Forrester’s latest Customer Experience Index, a great customer experience in banking “is still rare.”  But, as the report points out, “that means that there is huge financial upside for banks to differentiate by transforming their CX.”

We know that there is a strong correlation between satisfied customers, portfolio growth and financial results. But transforming the customer experience is a huge commitment for a bank. How can we estimate the economic benefits of a satisfied customer? It’s not straight-forward and each organisation has to plot its own unique strategy based on what their customers tell them. But at the heart of it, banks have to align their bottom line with their customers’ values.

The 2017 Digital Report behoves banks “to change your metrics to focus on what customers tell you is important.” Back in 2009, Huntington National Bank tried to do just that, making a concerted effort to win back customer trust following the financial crash. The bank’s consistent approach has paid off. In Forrester’s latest Customer Experience Index, the bank made a strong comeback, rising six spots over their previous ranking to capture the second spot among traditional banking providers. Forrester points to the bank’s “Fair Play” program as a significant initiative which showed customers the bank was looking out for their interests. Part of the program gives customers a 24-hour grace period to remedy overdrafts without incurring a penalty. It also allows for customer deposits to be credited up until midnight, whereas the industry standard cut-off is much earlier. This initiative may have cost the bank millions in revenue, but it also created customer goodwill, which contributes to business growth.

On the flip side, banks can’t afford not to improve their customer experience. According to the Forrester’s Report, a change in customer experience ratings for a multichannel bank leaves $124 million on the table for every 1-point decline in its CX Index score.  

A great first impression goes a long way

Onboarding is one of the best ways to impact customer satisfaction – it’s also the most economical.  Yet it’s not happening with any consistency in the industry. The Digital Banking Report reports that only 50% of organisations have an onboarding process, with even fewer carrying out customer outreach with optimal frequency.  The value of great first experience goes a long way in improving customer satisfaction. According to findings from J.D. Power and Associates, improving customer satisfaction early in the relationship by as little as 50 points can equate to a $24 million increase in revenue per 500,000 customers, which is the equivalent of a 6% increase in revenue. Contrast this with the financial cost of a lost customer.  With the incurred cost of acquisition and the lost revenue potential of a new customer, the negative impact of a lost customer is calculated to be at least $400.

Creating a good customer experience requires integrating offline and online channels and eliminating silos so that each experience is seamless. This is virtually impossible to do without investing in digital.  Solutions like unblu leverage a bank’s existing technology and infrastructure and fill in the gaps to equip the bank for seamless digital experiences. After approximately 120 customers used a collaborative unblu interface at their bank, more than 80% welcomed the opportunity to receive future online consultations. This meant the bank could increase the revenue per client while reducing the cost to market. With increased customer satisfaction and loyalty, the participants became enthusiastic ambassadors for both the bank and the technology. More than 90% of customers surveyed would recommend the bank based on their collaborative online experience with experienced sales staff.

The Forresters Customer Experience Index found that a phone call evoked the most positive emotions among customers who had chosen a bank that operates without a branch. Just a phone call. When customers see that banks are committed to doing what is best for them rather than the bottom line, it goes a long way. Improving CX often involves more resources and reduced profit margins. But the payoff means less attrition rates and more customer loyalty.  While it isn’t a straight forward formula, it is as simple as listening to your customers.

 

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