Is Your Bank Winning at Customer Experience in the Digital Economy?

As every football fan knows, the "hurry-up offense" is a staple in many playbooks. (For those of you unfamiliar with the term, in a “hurry-up offense,” the offense tries to execute as many plays as possible—as quickly as possible). It's a style of attack that works well if the opponent is complacent or under-prepared. When successful, the speed of the play exposes weaknesses in the defense quickly. It wears them down, and makes them confused and frustrated, giving the offense the opportunity to capitalize on the defensive breakdown.

Today’s business world is filled with uncertainty and change. Profit often goes to those organizations that innovate well. These companies exist in a constant “hurry-up offense” mode. They utilize technological resources to invent, transform, and create new products relentlessly and at rates that leave the competition in the dust. Consider Apple, which simultaneously released the iPhone 8 and X, yet already is at work on the next generation release. Survival in such a fast-paced environment requires taking risks, striving to pioneer, and offering products and services that bear authentic, competitive advantages.

Our current business climate puts a high value on innovation. So it's not so surprising to consider that it's a goldmine of opportunity for banking and financial institutions - provided they are willing to take risks and maintain a "hurry-up offense" position.

Banking is an Innovation Opportunity Goldmine

This is an industry with an (in)famous reputation for doing business "how it has always been done.” According to the recent report Improving the Customer Experience in Banking, only 37% of financial institutions have implemented a formal plan to improve customer experiences by meeting new trends in customer wants/needs. Of those 37% of institutions that have formal plans, the larger entities tend to allocate more of their resources to improving customer experience than their smaller counterparts. In fact, community banks - the presumed bastions of customer relationship banking—actually allocate the fewest resources to innovating ways to improve the client experience.[1]

Equally eye opening is the finding that financial institutions lack measurable evidence that their initiatives exceed—or even meet—customer expectations. This gap exists despite the fact that the same organizations say their top strategic priority is to “improv[e] the customer journey and provid[e] a positive customer experience.”

In the absence of measurable, actionable results, it's hardly surprising to learn that significant discrepancies exist between what providers perceive their customers want and what those same customers desire. For example, despite robust evidence showing that digital experiences are the leading driver of customer satisfaction, financial institutions are still mainly focused on trying to improve the branch/call/in-person experience.

What's behind this apparent disconnect between what banking leaders perceive, promise, understand, and do? A few reasons come to mind:

• A fear of encountering additional regulatory burdens
• Industry-wide, organizations are skeptical of change, especially since the Financial Crisis
• The reliance on doing things the way "it's always been done" has a stronghold on the industry

Banks and financial institutions have always relied on opening branches in geographically convenient locations and investing in brick-and-mortar environments. But as customers raise the level of demand for online and mobile banking, geography and aesthetics are losing impact and value consistently.

Building Actionable Intelligence

To be fair, most financial institutions have created mobile apps. And for the most part, those introductions have been positive. Now, banks need to be even more intentional about seeking innovative ways to improve the customer experience—especially the digital experience.

Unfortunately, many financial institutions lack the performance measurement criteria to spot what is working well and use that data to position themselves competitively. These institutions may not even understand the significance of their customer performance measurement insights to their innovation strategy.

It's not oversimplifying matters to say that the greatest customer experience opportunity the financial industry has is its digital offerings.

The survey asked customers what they value most from their financial institutions. The answers: safety, security, transparency, and trust. And the best ways to make an almost immediate impact on those factors? Digital transactions.

Investing in Data

It's no longer a "hurry-up offense" move to invest in data analytics tools, software, and personnel. It's a competitive necessity. Even if customers still desire a close personal connection with their bank, they have come to value digital experience convenience and quality over even the best physical or call center experience.

"The right information, analyzed in the right way, can ensure that the financial institution can provide the right offer at the right time.”

Jim Marous, Co-Publisher of The Financial Brand and Owner/Publisher of The Digital Banking Report

Banks and financial institutions need to offer much more than multi-channel transaction ability and mobile apps. Investing in data analytics is equally necessary. Whether it is part of compliance efforts or a focused intent to upgrade your digital offerings, the time has come to employ technology to capture, collect, analyze, and act on customer experience data. It's this information that will help you anticipate and proactively meet customer needs and wants.

(As a reminder—which should go without saying, particularly in light of the recent Equifax breach—invest in cybersecurity measures as well.)

How to Get Started

If your institution is in in the early stages of building a customer data collection strategy, keep in mind a few key customer insights:

• online activity
• phone locations
• verbal contact with customers
• social media analytics
• spending behaviors

While all of these data points are important, spending behavior can be particularly actionable. With the insights, you can implement a digital engagement process to notify customers via SMS about their ability to pay significant and recurring monthly expenses like their mortgage. Those interactions can help customers meet savings goals and alert them of unusual spending in their accounts. Both support the message that you care about the relationship—and they do it via the digital platform your customers want.

There's so much potential in digital banking and analytics platforms, but neither will work in the absence of one final critical capability. Patience. There are no silver bullets. Financial institutions can no less rest on tradition than they can implement a digital strategy and expect instant results. As Marous states, “By taking a data-driven and process-oriented approach to improving customer experiences, financial institutions may only fix one little thing at a time, but these small victories will result in the achievement of competitive advantages.”

How well banks collect and apply data and advanced analytics will define which ones win. Just as is the case in other industries, using every resource available to innovate wisely and continually is at the heart of a successful “hurry-up offense.” HORNE can help you keep a windshield view and put the resources in place to innovate with intelligence and agility in the areas that mean the most to your customer.

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 [1] https://thefinancialbrand.com/63654/banking-customer-experience-research-survey/