5 Ways Banks Become Relevant in the Context of Consumer Behavior

By WBR Insights

Future Digital Finance and CXFS partnered with the WBR Insights research team for a benchmark survey featuring responses from 100 senior leaders in personal finance. This article features key insights from the five sections of the report: 'Customer Understanding,' 'Prioritization,' 'Delivery,' 'Measurement,' and 'Culture.'

The report will be available in April 2018.

Banks are struggling to meet the heightened expectations of a new generation of consumers. As those expectations carry over from other consumer-facing industries, the customer experience is personal finance's new measure of performance.

Many banks have a disconnect between the experiences of their customers and real business value. Data from our study shows that only 40% of banks understand how customer experience (CX) performance influences their core business goals.

Now, a majority of banks are improving their engagement strategies with better targeting, analytics, and team orientation. 60% of banks can consolidate customer data into a single resource that provides a vivid picture of who they are. But banks lack the tools to deliver the 'right time' and 'right context' engagement consumers want and expect.

5 Opportunities for Better Customer Engagement

Banks identify a constant need to better understand customers in order to cater to them. We looked at some of the biggest weakness that banks identified in our report. Here are our recommendations for overcoming these key industry challenges.

1. Ask for Qualitative Feedback

Banks must begin strategizing customer experience management based on direct feedback from customers. Hard data is critical to identifying needs and pain points. But qualitative feedback helps banks identify the contexts in which those pain points and needs occur.

One bank from our study is 12 months into a campaign to gather as much information from customers as possible. They're now utilizing that data to provided end-to-end services to their customers. They're providing these solutions based on qualitative data that helped them align timing and needs.

Currently, 44% of banks claim they do not ask customers for qualitative feedback about their interactions with their companies. Almost half of banks do not monitor customer feedback and CX metrics to see how well customer experiences match the company's experience goals either.

That's because many banks struggle with the speed at which they acquire data. This inhibits their abilities to service customers based on their needs at the 'right time' for engagement. We'll discuss how to acquire and leverage this data with effective quality and speed in a moment.

2. Align the Customer Experience with Core Business Goals

Getting executive buy-in for engagement strategies is a struggle for most banks. Company leadership will be more open to solutions that contribute core business goals like revenue and retention. But only 40% of banks are successful in this area.

Banks need to prioritize qualities of the customer experience. Most banks are successful in identifying the needs of their core customers. They are less successful translating those needs into strategies that impact the bottom line.

Banks need the means to act upon customer data with a 'right time' and 'right context' approach. That means engaging customers when their needs are greatest--no matter their channel of choice. With the right analytics and engagement solutions, they can make a connection to core business goals.

3. Adopt Predictive Analytics and Cognitive Technologies

Perhaps banks' greatest struggle is acting on customer data in a timely way. While most banks can measure overall customer perceptions, only 34% of banks are successfully using CX quality metrics to inform future decision making.

Banks that have adopted predictive analytics see more in terms of next best steps for customer engagement. They can provide services, notifications, and benefits to customers based on their unique behaviors. They can automate these processes and use machine learning to adapt them in real time as well.

Such capabilities would help banks choose the right channels and times for engaging each customer. These personalized experiences help drive retention, loyalty, and revenue.

4. Engage Consumers through Mobile and Social Channels

Most customers already expect access to accounts and claims information via mobile devices. In our study, several banks identify customer demands for mobile retirement planning services as well. Demands for additional services will grow with mobile adoption and sophistication.

But 50% of banks rate their mobile experiences as only average, below average, or poor. 73% of banks feel the same way about social engagement. Social channels are increasingly relevant on mobile as companies use groups and notifications to engage with customers in real time.

These exemplify banks' struggle to adapt to broader contexts of consumer behavior. Companies in other industries adapt their engagement strategies to the cross-channel, cross-organization behaviors of most consumers. Banks must find their place in the daily shuffle of consumers' digital interactions.

5. Adopt an Internal Culture of Engagement

Retail brands have invested time and money into building customer empathy among their ranks. Many of us have encountered service reps uniquely capable of putting themselves in our shoes. In an industry of regulations, fees, and restrictions, this level of empathy is often lacking.

In fact, only 45% of banks currently assess the empathy and customer centricity of their job applicants.

Banks need customer engagement strategies that start with empathy. That means understanding consumers' financial needs during personal crises and moments of convenience alike. They must focus on getting ahead of consumers' behaviors so they're available at the right times and in the right contexts. That means building the technology infrastructure, culture, and internal support to deliver those experiences.

This article is based on research for the upcoming 2018 Future Digital Finance and CXFS report, Transforming Finance with Customer Experience Management.