How customer experience management is rewriting the financial services sector

3rd July 2023

For many years, the financial services sector has overlooked a crucial component of success: the customer experience (CX). Amid the relentless quest for profit, the customer has been left on the sideline, resulting in poor service and unmet needs. In recent years, however, the narrative has begun to change.

This change is largely driven by technological advancements, changing expectations, and of course, the profound competitive advantages firms can gain with a robust CX strategy.

For instance, a recent UK study found that by enhancing their customer experience scores by a mere 10%, banks could expect a hefty 27.5% growth rate. The gains are rooted in reduced customer turnover and increased revenue from existing, satisfied customers – resulting in a tangible boost to profitability.

However, the new age of customer experience management is not just about improving customer service. It’s about reshaping end-to-end customer journeys, factoring in diversifying customer profiles, and ensuring adaptability.

The digital transformation wave in financial services

We live in an era where technology is transforming every aspect of our lives, and financial services are no exception. This sector is undergoing a profound digital transformation that has not only reshaped service delivery but also raised the bar of customer expectations. Let’s face it, customers are no longer willing to settle for long queues at banks when they can make transactions seamlessly from the comfort of their homes, via digital platforms.

However, embracing digital transformation isn’t a walk in the park. The transition requires substantial investment to update legacy systems and infrastructure. During the changeover, maintaining seamless customer service can be tricky, with any disruptions potentially leading to customer dissatisfaction. Here’s where the end-to-end journey management comes in.

It’s not just about going digital; it’s about crafting adaptable digital journeys considering the diversity of customers, and more importantly, being aware of and managing vulnerability.

Additionally, there’s a need to invest in training employees on new technologies to ensure an enhanced customer experience. As such, the digital transformation journey requires strategic planning and execution, with a core focus on minimising disruption and continuously delivering exceptional service.

Crafting personalised experiences: A blend of technology and people

In a market where consumers are flooded with options, personalisation is becoming the defining factor that sets companies apart. In fact, consumers are 80% more likely to make a purchase when a brand offers a personalised experience, such as a service that is tailored to their unique needs and preferences.

Technological advancements, such as artificial intelligence (AI) and machine learning, are instrumental in facilitating personalisation in the sector. These technologies enable financial institutions to process and analyse vast amounts of data, providing crucial insights into customer behaviour.

Such insights empower these institutions to customise their services, leading to more relevant and effective customer experiences. But again, technology is not the sole hero in this story. Human touch plays an equally vital role. Combining the efficiency of digital interactions with the warmth of human touch is a key challenge, and an opportunity to delight customers where it matters most.

Building trust through exceptional CX

In an industry like finance, trust is paramount. Customers need to trust their financial service providers with their sensitive data and hard-earned money. When that trust is given, it results in sizable benefits for the firm.

For example, 90% of customers with high trust in their banking provider would recommend the service to friends and family. However, this number plummets to 39% for customers with low trust. These figures are roughly the same when it comes to opening secondary accounts with their existing provider. Though, it’s important to remember, trust doesn’t come easy, particularly in an era where data breaches and privacy concerns dominate headlines.

As such, adhering to regulatory standards, promoting transparency, and providing exceptional customer service can help in building and maintaining customer trust. When customers have a smooth, efficient, and transparent experience, they feel valued and secure, which boosts trust, fosters loyalty, and drives advocacy for the brand.

Data analytics and the value-irritant approach

In today’s digitised financial sector, data analytics is playing an increasingly pivotal role in enhancing customer experience. By leveraging sophisticated analytics tools, financial institutions can dive into rich customer data, uncovering invaluable insights that shape data-driven decision-making.

One strategic approach this data supports is the Value-Irritant model. This strategy involves mapping all customer interactions based on their value to the customer and the institution and the level of irritation they might cause to either party. The outcome of this mapping process leads to four actionable pathways:

  • Simplify: High-value interactions for the business, but not for the customer, are streamlined to ensure an effortless customer experience.
  • Resource: Mutual value interactions, beneficial for both the customer and the business, are leveraged. These crucial ‘human’ contacts are exploited to ensure maximum effectiveness.
  • Eliminate: Mutual irritant interactions, detrimental to both parties, are identified and eradicated. This could mean refining processes or offering proactive information to prevent these interactions from occurring.
  • Automate: Interactions of high value to customers but not to the business are automated. This allows customers to self-serve, enhancing their experience while reducing operational burden on the business.

The application of the Value-Irritant model is a powerful way to assess and optimise customer interactions, driving both enhanced customer experience and efficient business operations. By identifying areas of high value and high irritation, financial institutions can strategically direct their resources and technology to deliver maximum value and minimum frustration, creating a superior, tailored customer experience.

The future of CX in financial services

As we look towards the future, emerging trends and technologies are set to further redefine the landscape of customer experience in the financial services sector. Innovations such as AI, chatbots, voice assistants, which seemed futuristic just a few years ago, are now at the forefront of customer service innovation.

Artificial intelligence, in particular, offers enormous potential for enhancing CX in financial services. AI can be used to develop more intelligent customer service platforms, automate routine tasks, and deliver personalised experiences on a scale that was previously unimaginable. For instance, AI-driven chatbots can handle basic customer inquiries 24/7, freeing up human agents to tackle more complex issues. This not only improves efficiency but also ensures customers receive instant support whenever they need it.

However, the journey towards this future isn’t without challenges. Adopting these new technologies requires substantial investments, robust infrastructure, and skilled personnel. There is also the challenge of integrating these advanced tools into existing systems seamlessly, to avoid disrupting services or confusing customers.

Furthermore, while technology plays a crucial role in enhancing CX, it is not the sole determinant of success. Today’s customers crave personalised, empathetic interactions with human beings that make them feel valued. As such, balancing the efficiency of digital interactions with the warmth of the human touch is paramount.

Moreover, societal expectations are shifting, with customers increasingly favouring businesses committed to sustainable and ethical practices. For financial institutions, this could mean adopting more sustainable operations or offering financial products that reflect these values.

Final word

CX, once a peripheral concern, has emerged as a vital ingredient for success in the financial services sector. The potential growth it brings to the bottom line can no longer be ignored. As we forge ahead in the digital era, the role of customer experience management will only become more significant. Financial institutions must, therefore, rise to the occasion by embracing new technologies, tailoring their offerings for individual customers, and meeting evolving expectations.

Get in touch

Are you considering pivoting to a robust customer experience strategy within your organisation? We’re here to lend a hand. Armed with extensive experience in transforming financial institutions, we can navigate you through the intricacies of this transition and help craft a strategy that puts your customers at the very heart of your business.

Read our brochure to find out more.


Michael Anderson

Vice President – Client Solutions

Lee Russell

Client Solutions Director

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