Consumer preferences are evolving fast. Equipped with new digital innovations and technologies, financial institutions are finding new ways to deliver a positive customer experience. While some customer service teams are pioneering a new era of financial services, others are missing the mark, putting themselves and their customers at risk.
Financial institutions have their work cut out for them as they level up on digital solutions, facing obstacles such as a lack of consumer trust as well as data and security concerns. And while innovative technologies like AI could be a revolution for employee efficiency and quality, the human touch is still a vital factor in excellent customer service.
Stats on customer service expectations
The past years have seen a mass migration of financial services into the digital realm—and customers are showing no signs of slowing down. Gaining momentum throughout the pandemic, this shift has been consolidated over the past year. We’re now seeing a broader range of finance customers go about their business through digital channels, from the younger Millennial demographic to their parents in the Boomer generation. However, this surge in the popularity of digital banking is not consistently being met with better technology.
The preference for digital banking has a broad scope. Forrester’s data tells us that 69% of Spanish, 77% of Canadian, and 71% of North American consumers with online banking will use it at least every month (Forrester). Another estimate suggests that this figure stands at 89% of all US banking customers, rising to 97% when only millennials are considered (Insider Intelligence).
In terms of the functional scope of online banking, we’re seeing a strong preference for doing transactional activities remotely. Respondents to a Deloitte survey listed paying bills, bank transfers, and depositing checks as common processes they’d feel most comfortable completing via digital channels. Meanwhile, 30% of millennial and Gen X respondents said they would prefer to use digital channels, such as mobile apps or online portals, to connect with a customer service agent or financial advisor (Deloitte).
It’s not just younger generations driving the change, either. Of the Boomers in Deloitte’s survey, half expressed a preference for online banking when making a simple transfer (Deloitte). Since many individuals of this generation tend to have limited banking needs that can be completed via an app, this changed behavior is likely to endure.
That said, banks will have to work harder to keep up with this demand. While consumers are willing to use online and digital services, many feel let down by poor customer service experiences. In one survey, 64% of respondents felt that their bank’s mobile app did not allow them to solve a customer service question quickly—if at all (The Financial Brand). Given the threat of FinTechs and the emergence of Big Techs in the financial space, such a number is alarming for incumbent banks at risk of customer churn. If they have several bad experiences, consumers are likely to look for seamless digital banking services elsewhere.
Customer service stats on artificial intelligence
Artificial Intelligence is transforming all areas of business, reinventing processes and optimizing contact center operations. For banks and financial institutions, there is a lot to be gained. Deployed effectively, AI technology could save banks an estimated $447 billion (Insider Intelligence).
Nonetheless, banks must tune into customer feedback to ensure that poor customer experiences aren’t becoming commonplace as a result of increased AI deployments. Most banking customers will still want to see the human knowledge of banking that they’ve grown accustomed to.
So, what are banks actually doing with AI? At present, AI is playing a significant role in the ‘behind-the-scenes’ of banking. This is mainly in fraud detection, with 58% of banks depending ‘heavily’ on AI and a further 32% making use of it ‘to some extent’. We see a similar story for IT operations, with AI serving to optimize digital processes (The Economist).
Unsurprisingly, AI deployments are only expected to grow. Almost all banks plan to make it part of their tech strategy in the next three years, with uses forecasted across all kinds of companies. However, the popular areas for AI innovation seem to be CX-oriented. These include personalization of investments (with 17% of banks intending to implement in the next three years), credit scoring (15%) and portfolio optimization (13%) (The Economist).
Another critical aspect of AI in customer experience is the use of chatbots. As the most visible and frequently-used AI tool, banking customers have regular exposure to chatbots—but poor customer service experiences have left a lot to be desired. In contrast to a 66% satisfaction rate with online chat technology (which connects customers to a human customer service rep), a mere 26% of customers were satisfied with AI-powered chatbots (The Financial Brand).
Furthermore, over 80% of customers who have used chatbots for product inquiries in the last 12 months wouldn’t want to use them again—and 46% said that they’d prefer to use branches (Deloitte).
Banks will have a lot to prove to consumers if they want AI-based chatbots to catch on. Aside from investing in the advancement of AI chatbot technology, ensuring that they are used at the appropriate moments will be important in making bots effective. Just like a video call, there’s a time and a place for a chatbot.
Customer service stats on personalization
In a sea of products, services, sales and subscriptions, consumers want brands and banks to offer them something relevant. People must feel that their service providers know what they need, and have their best interests in mind. That’s where personalized experiences can strengthen ties and stimulate customer engagement. By leveraging vast amounts of data and demographic trends available to them, banks can gain a strategic advantage by offering a customized, cutting-edge digital experience.
What does personalization look like in banking? A simple layer of personalization comes from engagement via private messaging channels for customer service, with four in five people saying they expect this from brands and banks (Unblu). However, more complex products and services will demand a high-touch approach (Deloitte). For mortgages and financial advice, for example, personalization might mean offering a one-to-one meeting with a human agent, giving the option to meet digitally or in person.
Customers are also looking for personalization when it comes to financial health. 46% of customers would like tailored help for avoiding extra fees, and a further 37% expressed an interest in receiving account alerts to help them manage their money better (JD Power).
Younger groups are the main advocates for personalized banking services. Having grown up surrounded by strong brands built on the power of personalization, it’s not surprising that 81% of Gen Z customers say that personalized features would deepen their connection with their banking provider. For customers over the age of 65, this drops to 47% (EY). But as younger customers continue to bring digitally-driven preferences to the fore of financial services, personalizing CX looks to be a sound strategy.
Stats on customer loyalty
Gaining and retaining the trust of customers has been a difficult task over the past couple of years. The key factors of the pandemic and economic downtown have created difficult conditions for banks, demanding that they level up on their commitment to customers. So far, this seems to have flatlined, with the overall customer satisfaction score for guidance delivered by US national and regional banks dropping 30 points in the last year (JD Power).
Meanwhile, emergent players have challenged the dominance of traditional banks, winning loyal customers with tech-forward offerings and modern CX interfaces. At present, 37% of consumers list a FinTech firm as the financial services provider that they trust the most. Comparatively, 33% of consumers trust a traditional bank the most, and 12% name a wealth management firm as their most-trusted institution (EY).
Another worrying sign for incumbent banks is the behavior of younger consumers. As the most digital-centric consumers, they are increasingly less satisfied with their primary banks and are prepared to move their finances to another institution (Deloitte).
So, what can banks do to improve customer retention rates? The research suggests that improving communication is a critical aspect—which also means expanding channels. In a wealth management context, clients who meet with their advisors more than four times a year are twice as likely to feel optimistic about their financial situation, which bodes well for firms (VouchedFor).
The same is true for customers at banks. By offering several effective channels to support and provide responses to customers, banks we’ve worked with tend to get up to 4x more meetings than they did in the branch (Unblu). By using collaboration tools such as live and asynchronous messengers, calls and video meetings, banks can craft more meaningful interactions between a customer and a knowledgeable agent. This approach also secures faster issue resolutions for contact center calls and a skyrocketing recommendation rate—suggesting that customers are at no risk of taking their finances elsewhere.
Stats on digital transformation in banking
The shift toward digital transformation has been picking up the pace for some years. But as the pandemic took hold, digital transformation became a necessity—and then a demand. In response, firms are adapting to growing amounts of online customers, even though in-person services have now resumed. For three-quarters of financial organizations, digital banking transformation has been the top priority over the last year (Forbes).
As many have seen, however, digital transformation is no smooth road. Incumbent banks are stumbling into similar issues: 25% of customer service leaders list data management as one of the main barriers to digital growth, while 24% report that security is the biggest challenge (Forrester). With half of banks’ major obstacles concentrated in these technical areas, getting digital knowledge onboard is becoming central to survival.
On the other hand, digital developments have also introduced customer experience gaps in some settings. For those who have all but replaced customer service representatives with digital self-service options, frustration with customer service is on the rise. In fact, McKinsey estimate that 10-40% of bank revenues could be lost by 2025 if these customer experience gaps are not addressed (McKinsey).
To stay afloat, banks must take cues from popular CX innovations and define where digital truly adds value. Utilizing digital alternatives as a low-cost replacement for human-led services is likely to push customers away.
Cut through the noise with Unblu insights
Having deployed conversational banking technology at over 160 financial institutions worldwide, we’ve had our ears to the ground in the financial services industry for some time. To read more of our industry knowledge and expert analysis on wealth management, banking and insurance, check out our latest resources.