Restore the bank manager’s view with a personalized customer experience
Through Mike Ferguson, Redpoint Global Vice President Services, EMEA
As a child, in the 1970s, my father took me to the local bank to open my first savings account. Dad said it was important for the bank manager to see that I was being reasonable with my money so that when applying for a mortgage the bank manager would know me as a good client and grant me a good mortgage deal.
Almost 50 years later, I have had a few mortgage transactions and have never met the bank manager. However, the idea of a caring person out there to help me with my finances taunts me in times of frustration when trying to determine which of a range of complex financial products is the best value for me as a ‘individual. I’m even more frustrated when my brand loyalty means I can’t access introductory offers aimed at gaining new customers from other brands.
A recent survey conducted by Redpoint Global with Dynata Research highlights the problem, revealing a major mismatch between the level of personalized service expected by customers and the service provided by banks. Of the 1,000 customers surveyed, 82% said they expected their bank to understand them personally, while only 38% said their bank met that expectation.
Why is there a customer experience gap in the banking industry?
The transition to digital banking has been accompanied by a shift to a self-service strategy: the customer pays by check through an ATM, checks their balance through a mobile app, chooses financial products on a website. The availability of bank customer service staff has been drastically reduced to direct customers to these new interfaces.
In this self-service world, the concept of the customer is reduced to a set of financial products and banks are becoming even more product-oriented.
the Open bank This initiative was created in part to help customers get the big picture by linking accounts and viewing everything on one portal. In the Open Banking 2020 annual report, the Nesta challenge A survey revealed that 38% of consumers who adopted Open Banking attributed the switch to a desire for personalized support. But that does not solve the central problem with banks – the fact that the banks themselves do not meet the expectations of personalized banking services.
What would it take to bridge the customer experience gap?
What can we expect from our 1970s bank manager to know from their customers? Income, expenses, credit risk, loans, savings, investments as standard, but also what is happening in the life of this client: is the client recently married? Is the client / household going to empty out soon, or maybe save for college? With the big picture, our ideal bank manager instinctively understands the customer’s lifetime value and sees the customer as a whole person.
In an industry where banks compete with each other to get customers to switch providers and where the benefits to customers of brand loyalty have been minimized, we find that uptake of change offers is limited and customer satisfaction. customers decreases. Can banks change their approach and differentiate themselves by rewarding long-term business relationships with a great customer experience?
So today, is it possible for a financial institution to know each customer as an individual, understand their life stage and lifetime value, and use that information to be relevant in the context of the customer journey? It certainly adds value to the customer and the bank regardless of the product portfolio or total assets. By restoring the traditional view of the bank manager with deep, personal understanding, a financial institution is rewarded with more satisfied – and loyal customers.
In a digital world, how can the vision of the customer’s “bank manager” be restored?
The first step in a customer-centric approach is to break down the data, processes, and business silos that indicate a product-centric approach. By combining all sources of customer data into a single customer view, a financial institution builds a strong database that is central to creating personalized omnichannel experiences.
Maintaining a complete set of customer data then poses two further challenges: how to create insight and understanding from that data (bank manager’s view) and how to deliver suggestions and decisions to customers at speed. a click on a web page or a chatbot?
Creating information from large-scale, high-speed data requires automated machine learning (AML). Machine learning models embedded in a digital customer experience platform can be configured to identify patterns and groups of customer behavior and to make decisions to optimize any metrics (customer lifetime value, discounts on products, etc.) by bringing machine learning in line with data feeds, models will not become obsolete and will not have to rely on error-prone human judgment for audience segmentation . Rather, built-in machine learning allows hundreds or thousands of models to run simultaneously, always testing and optimizing the best action or offer for each customer segment.
Real-time data collection and response capability through the bank’s digital channels is essential to deliver the best customer experience. Real time allows the financial institution to deliver a higher quality action or offer to a customer on any channel that is aligned with the interests and needs of the customer at the time of the interaction.
In a recent Digital banking report who surveyed global financial institutions on their top strategic priorities through 2021, digital banking transformation (75%) and improving customer experience (51%) were surveyed as the top two areas for interest. Improved Customer Experience has been defined as an institution knowing its customers, their behaviors and needs, and providing contextual advice and recommendations based on needs and opportunities in real time.
This combination of single customer view, AML, and real-time decisions are all needed to create that elusive quality customer experience for bank managers.