outside of an empty bank in daytime hours
PHOTO: Ferran Fusalba Roselló

We’ve spent quite a bit of time over the last few months helping banks pivot to a new reality and figure out how to engage today’s and tomorrow’s customers. This has offered an inside view of the challenges at hand and how banks have responded to the almost-overnight disruption of their customer-facing operations and strategies.

According to a July 2020 survey by Citizens Bank, 69% of consumers and 71% of businesses do their banking online some or all of the time. Customers reeling from the economic fallout are seeking help in record volumes, but through innovated and differentiated contact-less channels. Use of cash has dropped substantially.

Most signs suggest banking, won’t be returning to “normal” anytime soon, if at all. Forty-five percent of respondents  to an April 2020 FIS survey said they had permanently changed how they interact with their bank, and 31% of respondents said they will increase their use of online and mobile banking. The same Citizens Bank survey showed 66% of consumers and 73% of businesses believed the new ways of interacting with their financial institutions will be permanent.

This will require banks to rethink their approaches for customer engagement and loyalty. Long-term relationships are often forged during crises, so this is a particularly important period for banks because of the role they can play in helping customers navigate economic challenges. Banks that can foster trust and partnership help customers address urgent concerns. They can provide the financial relief necessary to stabilize and sustain as we work our way out of the crisis and stand to build trust and goodwill that will remain beyond the current situation.

However, while the focus used to be on making customers loyal to banks, this is a time when banks need to show loyalty to their customers. To do so, banks must be prepared to offer an experience that meets customers not only where they are but where they want to be. This requires a focus in four areas.

1. Current Customer Insight

If banks need to meet customers on customers’ terms, they need to understand where that is and what it looks like. In-branch services offer a good example: for which services are customers willing to come into a branch? And for those who cannot come into a branch, how do we provide the same services remotely?

With needs, behaviors and conditions continuing to evolve, banks must maintain a pulse on their customers. This should include voice of the customer and market intelligence activities, but at greater frequency than normally conducted. Further, transactional system data holds critical insight about changing behavior. For example, banks might consider revising their rewards or incentive programs to more closely align to what their customers care about today. This might mean rewarding extra points on take-out meal purchases or local shopping instead of travel. It is essential that banks have the capabilities to compile all of this data, assess and analyze it quickly, and understand what the information is telling them. Without that, the ability to take the right actions is limited.

Related Article: How Financial Services Compete on Customer Experience

2. The Right Customer Performance Indicators

Meeting emotional needs such as financial security, responsiveness, transparency, convenience and empathy will be key to engaging customers and engendering their loyalty in the current environment and in the future. It is important, then, to measure customer performance indicators (CPIs) that reflect ability to deliver on these needs and expectations. Some examples of questions to consider include:

  • How easy is it for a customer to track the status of a loan application in process? And how quickly can the application be processed?
  • How easy is it for consumers to use self-service channels and how responsive are banks via these channels?
  • How long are customers on hold before their calls are answered? And what percentage of issues are resolved at the first point of contact?

Of course, all key CPIs should tie back to corporate key performance indicators for retention, growth and innovation.

Related Article: How Financial Institutions Can Shift From Product Pushers to Relationship Builders

3. The Ability to Deliver Digital Innovation Rapidly

We are living in a new remote world — at least for the foreseeable future. Banks will depend on digital experiences to fulfill their customers’ goals and to grow their revenue. Given the limited resources and budgets, picking the right targets is critical. One example is the process for opening a deposit account, often a customer’s first experience with a bank and one the bank wants to control. Beyond that, banks should review their online/mobile banking system and those of their competitors to identify features they could offer that competitors aren’t. Under current, contact-less conditions, capabilities such as self-serve resolutions, wires, ACH transactions, automated loan decisioning, loan renewals, and account service requests offer additional ways to connect with and engage clients remotely. To determine which of those capabilities to build first, go back to the voice of the customer, and focus on what is unique to your customer’s needs.

Once a bank has determined which features to pursue, it needs to become comfortable with rapid deployment of a minimum viable product that includes essential features, but not necessarily all the possible bells and whistles. Those can always be perfected later. Banks got a dose of this in March and April when they had to move in an uncharacteristically rapid manner to establish — within days — the ability to accept loan applications under the CARES Act/Paycheck Protection Program.

Finally, digital technology, enabled by data and analytics, will play an enhanced role in communication. Factors such as the rhythm of outreach, consistency across communication channels, and personalization all require heightened attention.

Related Article: Financial Services Ride the Disruption Wave

4. A Customer-Centric Organization Structure

While banks have been working toward this goal, many still struggle with a 360-degree customer view, often due to organizational barriers. Consider that a commercial banking customer may very well also use consumer banking services. It is hard to deliver an experience designed to increase personal engagement and loyalty when the bank cannot look across products and divisions to understand the full relationship. Therefore, a structure must be in place that can look at CPIs across the enterprise — and, more importantly, has the authority to act on them.

Banks have had their hands full reacting to the volatility of the past few months. Although the future is still far from clear, most are settling into the current reality. This means they must be thinking about how to pivot to a proactive stance and get out in front of customer engagement and loyalty. Delivering a differentiated customer experience, one that allows the bank to meet customers where and how they want, will be a key to doing so.