4th February 2013
As banking becomes more digitized, customers still crave a human connection. Jonathan Camhi explains how to ensure a rewarding customer experience:
Banks are looking to streamline services in the name of cutting costs to compensate for declining revenue. One added benefit of these simplified policies and procedures is that banks also are providing a simpler, easier customer experience.
Simplification, in particular, provides a more consistent customer experience, says Fergus Gordon, a partner in the financial services practice at A.T. Kearney, a Chicago management consulting firm. “There’s a nice tension and balance in the thrust of efficiency and a more consistent customer experience.”
But as new channels, such as mobile and sophisticated collaboration technologies, drive customer expectations higher, just making the experience simpler and more consistent won’t be enough to provide competitive advantage. Here are five tactics that can help banks produce a more compelling customer experience.
1. Branch Managers Are Key
Until self-serve kiosks become more widely adopted at bank branches, most of the human interaction between banks and their customers will continue to be at the branch. That means the branch will continue to be a key battleground for customer experience. And banks have a lot of room to improve there, Gordon says.
He points out that many banks don’t even take the basic step of thanking customers for their business. “In the hotel industry, if you’re a member, they always thank you for your membership when you check in,” Gordon remarks. “Banks don’t thank their customer every time they come in.”
Many of the basic things that banks could improve in the branch customer experience — such as recognizing customers when they walk in and thanking them — come down to interaction style and customer engagement, Gordon says. A.T. Kearney’s research has shown that the key to unlocking great customer engagement with the staff is the branch manager. “The branch manager is so important; 70% of high-performing branches are driven by branch managers,” he says.
The role of the branch manager in coaching the branch’s staff on interaction with customers is the determining factor in those high-performing branches, he explains. Banks should be careful to hire branch managers based on the skills and competencies that they can bring to the table in dealing with customers, Gordon says, and dealing with customers should be the branch manager’s No. 1 concern, rather than the performance of specific products or services at the branch. “They should worry about training the staff to focus on customer outcomes and lifting the performance of their team members. They shouldn’t be worried about product successes,” he says.
2. A Human Touch To The Digital Experience
It’s not just the branch where the human touch makes a difference — it’s critical to providing a quality customer experience on digital channels, as well. One example of this is Bank of America’s recent addition to its peer-to-peer payments system that lets customers send personal messages along with payments to the recipients. The bank’s customers have provided a great deal of positive feedback on the added messaging service, as it lends a personal feeling to the transaction, says Dave Godsman, senior VP of online and mobile solutions at Bank of America, which has $2.18 trillion in assets.
That messaging service is just one example of the way the Charlotte, N.C., bank is personalizing its digital experience to differentiate itself from its competition, Godsman says. “There are inherently personal interactions –like [peer-to-peer] payments — that are meaningful points when they’re doing transactions,” Godsman says. “We see those points as places where we can meet [customers’] expectations and exceed them.”
“This is an aspect of customer experience that’s often overlooked, but it’s becoming more central with the rise of new competitors,” he says.
Providing a personalized experience also means letting customers configure their preferences as much as possible, such as choosing if and when they want to receive mobile alerts, Godsman says. It also means letting them use the device and operating system of their choice, he says.
“Customers want choice. They want to do things on their preferred channel, on their time,” he says. “Our relationship starting point is we help you get the help you need through the channel of your choice.”
Banks have to realize that different customers are going to use different touch points to reach their banks, and banks have to be there to meet them at the touch points of their choice, Godsman says. That includes social media: “I can’t remember the last time I dialed a call center,” he says. “But I can remember the last time I complained on Twitter.” Meeting customers where they want to interact provides a human touch on two levels: It gives them the reassurance that their bank is there when needed and provides the flexibility that consumers are coming to expect in their digital lives.
3. Banking Can (And Should) Be Fun
“Banking is seen as a stuffy industry,” says Matthew Wilcox, an e-marketing specialist for Union Savings Bank, a community bank based in Danbury, Conn., with $2.5 billion in assets. That can change if banks strive to show a personality behind their brand, Wilcox says, and using interactive games to engage with customers in digital channels provides an opportunity to do just that.
Union Savings Bank ran a game-based marketing campaign from October through December of 2011 to attract new customers for its 1-2-3 Checking product line. The online game, called the 1-2-3 Checking Challenge, awarded prizes to customers based on their scores in the form of vouchers that they could deposit in their new checking accounts. More than 2,200 people played the game, with more than 1,200 of them opening new accounts, Wilcox says. The campaign was so successful that the bank may bring it back next year.
The game also had a side effect of generating greater interaction with the bank’s digital channels, Wilcox says. It was hosted on the bank’s website, and the time that the players spent on the site was more than 400% higher compared with regular site visits, he notes. Players explored new products and services through the bank’s website without the bank having to advertise them. “Customers looking for checking accounts started looking at wealth management services and mortgages,” Wilcox says.
Players liked to compete with each other and brag about their high scores, so the bank posted a leaderboard on its website and posted changes to the leaderboard on its Facebook page, Wilcox says. The game brought increased engagement from customers both with Union Savings Bank and with each other through social media, creating a true social community to which customers felt a connection, he says. The average age of the players was 36 to 37, according to Wilcox.
There are more than 135 million people gaming online for more than one hour a month, according to a February report by market research firm Parks Associates, so it’s clear that customers are spending a good chunk of their digital lives gaming. Union Savings Bank realized that if it wants to continue to meet customer expectations, it was going to have to experiment with gaming in its digital channels, Wilcox says.
But he warns that for a gaming initiative to be successful, it has to have a goal beyond self-promotion. That goal could be socialization and getting customers to interact more to build an online community, he says, or it could be an educational effort with the goal of raising customers’ financial IQs. And with more than 55% of digital gamers playing on their smartphones, according to a report released earlier this year by Geekaphone, a mobile industry researcher, Wilcox says the next step is to introduce gaming in the mobile channel.
4. Make It Real Time
Many banks understand the importance of gaining a 360-degree view of the relationships with their customers, says Luc Burgelman, CEO of NGDATA, a provider of data and consumer intelligence offerings in Ghent, Belgium. But the next step — or battleground — in customer experience will be using data to perform actions and services for customers in real time, he predicts.
Customers expect more convenience and faster service based on their experiences in a fast-paced mobile world. This means banks must be able to not only personalize their services and tailor them to the customer but also learn to deliver them instantly at the right moment, Burgelman says. This also means banks will have to be able to identify potentially fraudulent payments right away, he says, as customers won’t be satisfied if it takes two or three days for their banks to alert them to possible fraud in their accounts.
NGDATA works with financial institutions to help them use customer data to deliver personalized coupons to customers in their checking accounts and digital wallets. Banks and digital wallet providers seeking customer loyalty and retention will need to deliver relevant offers in real time to customers via their mobile devices as they enter a retail outlet, Burgelman says.
“When people buy something, the decision is always based on the right offer at the right time and location,” he says. “It will be about being interactive and being there in real time. … Banks have to take the data that they have right now and make it actionable in real time.”
5. Consider Nontraditional Banking Services
Technology advances from companies such as Amazon, Apple and Google are driving customer expectations in digital services, says Michael McEvoy, managing director of ath Power Consulting, a Boston-based financial services consulting firm that specializes in customer experience. As those companies continue to set the bar higher in terms of speed, convenience and simplicity of products and services, banks have to adapt and play catch-up. That trend bodes ill for banks as these hot technology companies start offering services that banks traditionally have dominated, McEvoy says. But he says that technology also is making it easier for banks to offer nontraditional banking services, as well.
Barclays is an example of a financial institution that’s starting to move into these new areas, McEvoy says. One of the technology firms that he previously worked with helped London-based Barclays in developing its MyBusinessWorks service for small-business customers. Through the service, small businesses can get Web hosting, accounting software, data backup and legal services on a fee basis. Ath Power Consulting’s research has found that many of these services are in high demand at small businesses, McEvoy says, and providing them lets banks serve difficult and expensive populations like microbusinesses — a group that often can be loss makers for banks.
There could be many ways to offer nontraditional banking services to consumers as well, he says. “Banks could provide an easy, inexpensive way for younger consumers to buy media through their mobile device. There’s nothing stopping them [banks] from doing something like this,” McEvoy says. “It will help pull financial institutions into the 21st century … and give customers a reason to connect with the bank.”
Keeping Up With Customers’ Changing Expectations
Going beyond traditional financial services isn’t always comfortable for banks, but it will be critical, along with these other steps, as banks respond to their customers’ changing expectations of just what great service entails.
• Make it competitive. Post a scoreboard online so that gamers can compete with each other and show off their high scores.
• Leverage social media. Gaming is already part of customers’ social media lives, as gaming applications proliferate on Facebook. Post updates to the scoreboard on Facebook and Twitter and encourage players to engage with each other on those channels. You can also explore offering gaming applications on Facebook.
• Go beyond self-promotion. Games must have a point beyond just promoting the bank. For instance, you could make a contribution to a charity chosen by the customer with the highest score. Alternatively, the game could be geared to provide financial education for customers.
• Incentivize. Provide a reason for customers to want to play games. You could offer prizes to those with the highest scores, or players could be entered into a raffle to win prizes.
• Go mobile. Gaming is becoming a bigger part of customers’ mobile experience, with 55% of gamers now playing on their mobile devices. If you’re looking to attract mobile customers, you’d be wise to incorporate gaming as part of their mobile banking experience.