According to Gartner, 89% of marketers will compete primarily on the basis of customer experience this year. But who are they competing against? In today’s world, consumers compare their experiences across industries. That means that they don’t just compare one bank to another — they compare their experience with one bank against their experiences with all the other companies they interact with in their daily lives. So as a marketer in the financial services industry, you aren’t just competing with your direct competitors, you’re competing with the likes of Amazon, Netflix, Uber, and more.
One of my favorite quotes that illustrates this phenomenon is from PwC: “The omni-digital customer who just ordered a pizza on her smartphone may ask herself why banks make it so hard.” Personally, as a consumer, I get annoyed when I encounter a company that provides a frustrating experience. Whether the application process is confusing or the search function doesn’t help me find what I’m looking for, I think about the websites I interact with regularly that provide an easier experience. I’m certainly not alone in that judgment.
But don’t take my word for it. In this post, I’ve compiled some customer experience insights from key influencers in the financial services industry.
The Future of Financial Services is Digital
By 2020, nearly half of the world’s population will be digital natives, many growing up not knowing a world without the internet. Smartphone subscriptions will grow from 2.6 billion at the start of 2016 to nearly 5.8 billion in 2020, reports GSMA. New consumers will have new expectations for digital on-demand financial service; they will look for competitive solutions and broader financial inclusion.
Already, we have mobile money services available in 90 emerging market to over 1.9 billion people globally; this number may double in the next five years. Once connected, financial institutions will have the opportunity to build trust further and offer customers the range of legacy services including banking, lending, insurance, and investments but delivered in new and more seamless ways.
Leading financial institutions will further embrace a digital-customer-regulator-centric world to shape their future and prosper.
— Mike Quindazzi in an interview with JAXenter
Particularly in Digital, a Great Customer Experience is Critical
E-commerce has taught us that the traditional sales & marketing paradigm of product/price/placement/promotion is not sufficient anymore. In its stead the new paradigm of experience over the continuum of purchasing – pre purchasing, purchasing and post purchasing – is crucial for any retail consumer endeavor. By that I mean that for a given type of product or service, we as customers require a certain level of experience around education and choice prior to purchasing, a frictionless experience when purchasing and a seamless experience around fulfillment, delivery and service or maintenance post purchasing.
For certain categories of products we need just enough education, choice and excellence of service post-purchasing. For other categories of products we don’t. It depends on how important said product is in our life.
Most finserv incumbents do not get this new paradigm. My bank certainly does not. By all means “getting” the right customer experience in financial services is tricky. We as customers are not terribly excited – positively or negatively – by our interaction with financial services unless we ask for credit, build up to a certain net worth goal or submit a claim with our insurance company. In other words we tend to be have a discrete utility curve around specific events, not a continuous one. Further we get irate quickly when something does not work. After all, it is our money and we are emotionally attached to our money.
— Pascal Bouvier on his blog, Finiculture.com
The Keys to a Good Customer Experience
The keys to providing exceptional customer experience in mobile financial services are: Simplicity of use, Personalization, Convenience (versus calling or going to branch), Availability (always on), and Security.
Being the best on all these dimensions at the same time is challenging. Providing the best customer experience requires you to be aware of the trade-offs and to make conscious design choices.
For instance, frequency of use is a key parameter that is often overlooked in the design choices. There should be a clear distinction between services that you use every day compared to the services you only need on an exceptional basis.
Think about it: how often do you use your insurance app? Ideally you would never use it. But you want to be able to use it when you need to file a claim or get assistance. Similarly, how often do you get a new mortgage? On the other hand, anyone wants to use convenient means of payment every day. If you are a trader and an investor, you check your portfolio and look for market insights every day, if you don’t trade being able to check your retirement plan once a year or so is good enough.
— Sebastien Meunier in an article on Mobile Business Insights
Effectively Leveraging the Data You Have is a Huge Opportunity
Banks are fully aware that they do not leverage data as well as they should. Forrester estimates that 99.5% of data in most companies is not analysed, which is astounding. Today, combining financial data with online usage from external services is becoming a critical factor in serving markets. This is perhaps a more tangible issue for banks, who struggle to adequately analyse their own internal data, let alone combining this with social data. Obviously, there are third parties who are good with data, such as the Amazons and Facebooks of this world, and banks are concerned that such firms will use their deep data analytics to serve customers with more relevant information than banks could ever achieve.
— Chris Skinner on his blog, The Finanser
Consumers Expect Personalization
Consumers want their financial institution to be a seamless part of their daily life, expecting everything to happen with their individual needs and behaviors in mind. This is what firms like Amazon, Facebook and other large tech firms deliver – and this is what today’s consumer has come to expect. This means communicating with the consumer at the right time, right place, right channel and on the appropriate device. They want their primary financial institution to know them, look out for them and reward them.
It’s one thing to know what the consumer wants and what should be done to provide a differentiated and contextual consumer experience. It is far different to be able to deliver on the ‘personalization promise’. It is clear that we are definitely not there yet. A key component of this deliverable is the ability to provide these insights in real time through digital channels.
— Jim Marous in an article on The Financial Brand
So there you have it. The experts are in agreement that the customer experience in financial services is absolutely essential in an age where your customers can compare their experience with you with any other company out there.
One key topic comes up across many of the influencer quotes — personalization. By providing a personalized experience to each prospect and customer, you can ensure that each person has a relevant experience with your company. To learn more about the importance of personalization in financial services, check out this blog post. And to learn how to make personalization work for your own customer experience, request a demo today.