Much of banks’ performance and growth potential is tied to a superior customer experience – and a strong reputation is essential to remain competitive. However, customer demands are evolving and delivering on new expectations is a challenge that all financial institutions face.
Overall, current customer experience trends show a preference for robust omnichannel capabilities, which can only be achieved through full digital transformation. However, customers are increasingly particular about how these services are delivered. This means that beyond implementing advanced technologies, banks also need easy-to-access human support and an understanding of what’s important to individuals to fully realize a positive customer experience.
By remaining on top of the most up-to-date customer experience statistics and trends, banks can identify the critical areas to focus on in their digital transformation journeys. This, in turn, will allow financial institutions to find the right balance between the tools and human support that’s necessary to deliver on customer expectations.
Is digital transformation meeting banking customer needs?
In the wake of the COVID-19 pandemic – and with new geopolitical and economic challenges causing further strain – there is increased urgency surrounding digital transformation banking. The organizations that are able to capitalize on the current context have strong opportunities to make a name for themselves in the financial services landscape.
Progress is being made in the financial services sector. Forrester reports that 35% of global banking executives are happy that their digital banking initiatives are moving forward. However, this is a far cry from what we would expect given the state of affairs, with 65% either not happy with their progress or don’t have any to speak of. At the most worrying end of the scale, there is the 12% who claim to be stuck in the planning stage and the 6% who don't have any transformation plans at all (Forrester).
As for the customers themselves, there is a trend towards more robust digital banking options, and this is true on a global scale. A recent report found that 77% of Canadian customers, 71% of US customers, and 69% of Spanish customers who have online banking use it at least every month (Forrester).
However, simply having a mobile banking app isn’t enough. Not only do the mobile apps or other digital banking services need to provide the functionalities that customers want, but the quality of the service must also be up to standard. The most recent trends show us where banks should be focusing their efforts.
1: Everything must be omnichannel and mobile-first
Customers expect answers to their questions or queries, and on their terms. These days, that means providing access to support on mobile devices with a broad variety of channel options. This is an area that many banks have made great progress in, and rightly so. Across all generations, there is a huge uptake in the number of people using mobile banking, amounting to a total of 89% – and when you look only at the Millenial age group, that number rises to 97% (Insider Intelligence).
The success of mobile banking is encouraging, but it should not be seen as a catch-all service solution. Customers want variety and the channels they choose to use will depend on the nature of their issue or query. Banks need to ensure that they have robust self-service options as well as easy access to human contact via customer service agents. This extends to the offline world as well, with 82% of customers viewing having a local branch as extremely or very important, even though 24% expect to use one less often in the future (EY).
For banks and financial services institutions, these trends emphasize the importance of balance. If the capabilities don’t already exist, banks must move quickly to provide an omnichannel user experience supplemented with offline options. However, this is proving challenging for some institutions.
To overcome the challenges associated with digital transformation in banking and provide the service experience customers need, many banks are integrating third-party solutions into their own software. While this has the potential to create issues with brand dilution, having a well-functioning third-party e-banking portal or omnichannel solution can help them to mitigate in-house technical limitations.
2: Self-service options are only effective to a point
Self-service options, whether portals, artificial intelligence (AI) chatbots, or FAQs, empower the customer to take matters into their own hands. For simple questions or queries, they represent an easy solution with almost instantaneous results.
However, even with the most advanced technologies and machine learning capabilities, self-service options can’t provide the quality experience that customers want in all circumstances. That means, when a digital banking platform doesn’t meet customer interaction expectations, it’s essential to have a human advisor on hand to help.
These were the conclusions of a recent Deloitte survey, which focused on customer preferences with respect to chatbot and human-led interactions. According to the report, people are happy to use automated digital channels for simple queries, like making transactions or common questions. However, if a customer wants to take out a mortgage or needs more specific financial advice, there’s no substitute for real-time interactions, whether face to face or through messaging apps (Deloitte). Forrester further corroborated these findings, showing that hybrid experiences scored higher on effectiveness, ease, and emotion than either digital-only or physical-only options (Forrester).
This is an important point for banks who want to deliver a next-level customer service experience, emphasizing the fact that a combination of technology and human intervention is necessary. For simple tasks, having human agents can be counterproductive for everyone, wasting the service professional’s time and increasing the chances of customer frustration. A hybrid service option that enhances the capabilities of both digital and human support is proving to be the best way forward.
3: Artificial intelligence shows potential – but shouldn’t be overplayed
AI and automation play an important role in banking. There is a reason that almost all incumbent financial institutions use artificial intelligence to a greater or lesser extent, or have plans to in the next three years. The technology can be applied to many situations to great effect. As an Economist survey shows, decision-makers plan to use AI to enhance diverse business areas – a reported 17% plan to focus on personalizing investments, 15% on credit scoring (15%), and 13% on portfolio optimization in the next one-to-three years (Economist).
However, the rise of AI – particularly chatbots – led to an oversaturation in customer service interactions. They were deployed too quickly and with unreasonable expectations given the technology’s maturity. And the customer feedback is telling. While 66% are satisfied with online chat technology that connects them to a customer service representative, only 26% said they were satisfied with AI-powered chatbots (The Financial Brand). These bad experiences are leaving a mark on customer preferences, with over 80% saying they wouldn’t use a chatbot again for product inquiries. Finally, 46% said that they’d prefer to use branches (Deloitte).
On the other hand, there is a rise in the use of smart speakers or voice assistants for simple banking transactions, although there remains a feeling of distrust overall. In 2021 in the US, 30% of adults who have an online banking account used a smart speaker to consult their balance. In the UK, the same percentage – 30% – claimed to have used a digital voice assistant to make a transfer to another person’s account. Finally, in Canada, 22% of respondents said they’ve used a smart speaker to transfer money between their own accounts (Forrester).
Overall, this is an area that shows promise, provided banks are able to avoid poor experiences. The nature of the transactions makes smart speakers a convenient solution for customers. While a lack of trust still exists, there’s also a keen opportunity for banks to engage in communication campaigns to reassure their customers of the security of these systems.
4: More personalized customer journeys with data and analytics
Data-driven personalization is the key to providing positive customer experiences that makes financial institutions stand out from the competition. However, gaining valuable insights also presents a sizable challenge, particularly in a banking context.
Any usage of customer data needs to be secure, transparent, and ethical, which is no easy task for service professionals looking to gain actionable insights. A total of 73% of bank executives admit that turning loyal customer data into patterns and trends that they can use presents a significant challenge, with 95% pointing the finger of blame at restrictive operating systems (Capgemini).
Despite this, if banks don’t properly use the data that they have collected, it will likely have an impact on product improvements. Given the threat from innovative outsiders like fintech startups, this could have long-term repercussions.
The fact of the matter is that there is a huge untapped well of potential for providing personalized experiences, especially in traditional banks that have huge customer bases. However, all incumbent institutions are facing the same challenges in this area. Those who are able to develop satisfactory solutions to this problem will have a serious edge over the competition in the coming years.
5. Unifying communications in contact centers
Contact centers remain a vital cog in the customer service wheel in financial institutions. However, managers are reporting that the multiple vendor relationships they have are proving difficult to deal with and can result in negative experiences. The answer lies in combined unified communications and contact center platforms. As many managers are discovering, this approach simplifies the vendor management and system architecture, and can even have a positive impact on costs (Forrester).
There are also substantial benefits on the customer side in unifying communication channels under one platform. For example, it serves as a foundation that managers can use to create secure environments, allowing customers to identify themselves more quickly.
Beyond this, it generally provides a more seamless experience for the customer, breaking down silos and allowing customers to solve their issues more efficiently. Any interaction they have with the finance brand is recorded and available for human agents to see and get up to speed more quickly. Then, the agent can decide the course of action that’s necessary, whether continuing over messenger chat, video, or collaborating with co-browsing capabilities.
Digital transformation: the key to delightful service experiences
Across all customer experience trends, the unifying theme is a need for full digital transformation. This reality hasn’t escaped banks and financial institutions and the vast majority are undertaking at least some kind of initiative.
However, roadblocks and challenges remain, with the implementation proving more difficult than expected. In traditional banking organizations, 25% of customer service leaders say that data management is the major barrier to growth. A further 24% claim it’s security, meaning that around half of the main obstacles that banks face are focused on security or data.
In the coming year, given the increased urgency for transformation, it remains to be seen which banks will be able to overcome these challenges and provide the service experience that customers expect. The race for digital transformation is on – and it’s never been more necessary in order to provide excellent service and ensure customer loyalty.