How do banks achieve loyalty in the branchless era

By Chris Colley, Regional Director – Europe, Middle East & Africa  at Medallia

Research released last month by consumer group Which? revealed that banks and building societies closed an average of 60 branches per month in the past three years.

The banks say the branch closures are due to the increasing number of people banking online. However, TSB’s recent digital banking systems failure (which will end up costing the bank more than £100 million) shows that not all banks are ready ditch the branch completely.

At a purely function level, it doesn’t really matter whether you are banking online, via an app or going in branch – what matters is the experience the customer receives to perform the task they set out to do. Assuming that the trend towards a branchless era continues, how can banks ensure they provide a customer experience that keeps customers engaged and ‘top of wallet’?

First, it’s important to understand the importance of customer experience to an organisation’s success. Medallia research of 8,000 consumers in the US, UK, France and Germany found that experience was the single greatest factor when it comes to choosing a brand or organisation. And almost two thirds (65 percent) of consumers said they actively avoided a company or brand in the past year because of a bad experience.

In an age when customer experience is so important, organisations need to go above and beyond to keep customers loyal. Our research found that less than one in 10 people said dealings with their bank in the past year had exceeded their expectations. In the US this was as high as 19 percent, but a mere 2.5 percent in France. And when consumers were asked if they have noticed a change in the customer experience with their bank, just 12 percent said it had improved. US banks are leading the way in customer experience, with almost a quarter (23 percent) noticing an improvement in the past 12 months, compared with 14 percent of Brits, 13 percent of French and 11 percent of Germans.

This lack of innovation in customer experience has serious implications for loyalty. An important first step is to play an active role listening, and acting upon, customer feedback and key customer experience metrics. Those that are listening to customers and understanding which elements of the experience are working and which are letting customers down are best placed to improve, and ultimately exceed customer expectations.

So, what do customers want from their bank?

Our research shows that ultimately, they are not ready for a completely digital experience. Almost two thirds (63 percent) of consumers want the ability to chat or engage with a live agent or representative – this was highest in the UK and US, both with 70 percent.

From a customer experience perspective, what matters most is a  consistent level of service across both physical and digital channels – which was a requirement for 64 percent of consumers. Additionally, 62 percent said they want a frictionless flow of information across channels – confirming the frustration of being able to perform one action on one platform, but not another. Banks that create a truly omni-channel experience are best placed to create loyal customers.

Timeliness is also key, regardless of the channel that the customer chooses to engage with. More than half (57 percent) of consumers expect a real-time response to a query and they want that response to be on their preferred channel. UK and US consumers are more demanding in this regard, with 68 percent wanting real-time responses, while this was 47 percent and 44 percent in France and Germany respectively. If the consumer is making a complaint, the expectations increase even further, with 70 percent of consumers expecting an immediate response.

As well as maintaining a human element to the customer experience, consumers want their interactions to be personal – they want to be acknowledged as an important customer and expect to be treated on an individual level. Half the consumers in the study said they expect a personalised experience from their bank. Another 50 percent of Brits said they want the financial services companies they do repeat business with to know who they are. A third of all respondents said they want customer service agents to be instantly familiar with their customer history.

Ultimately, banks need to ensure they get the balance right between the human and digital customer experience. Digital and online banking services are vital to add convenience and provide basic levels of support, while human interaction is important for more complex enquiries. If banks do head towards a branchless model, they must be able to provide a personal, or human experience to keep customers loyal. This can be achieved by those digital channels that create a more human experience such as online chat. Most importantly, banks need to have systems in place that recognise each customer at an individual level and collect customer feedback on the customer experience. They also need to empower customer service agents with the right information, so they are able to provide the quick and personal experience that consumers demand.

By Chris Colley, Regional Director – Europe, Middle East & Africa  at Medallia

Research released last month by consumer group Which? revealed that banks and building societies closed an average of 60 branches per month in the past three years.

The banks say the branch closures are due to the increasing number of people banking online. However, TSB’s recent digital banking systems failure (which will end up costing the bank more than £100 million) shows that not all banks are ready ditch the branch completely.

At a purely function level, it doesn’t really matter whether you are banking online, via an app or going in branch – what matters is the experience the customer receives to perform the task they set out to do. Assuming that the trend towards a branchless era continues, how can banks ensure they provide a customer experience that keeps customers engaged and ‘top of wallet’?

First, it’s important to understand the importance of customer experience to an organisation’s success. Medallia research of 8,000 consumers in the US, UK, France and Germany found that experience was the single greatest factor when it comes to choosing a brand or organisation. And almost two thirds (65 percent) of consumers said they actively avoided a company or brand in the past year because of a bad experience.

In an age when customer experience is so important, organisations need to go above and beyond to keep customers loyal. Our research found that less than one in 10 people said dealings with their bank in the past year had exceeded their expectations. In the US this was as high as 19 percent, but a mere 2.5 percent in France. And when consumers were asked if they have noticed a change in the customer experience with their bank, just 12 percent said it had improved. US banks are leading the way in customer experience, with almost a quarter (23 percent) noticing an improvement in the past 12 months, compared with 14 percent of Brits, 13 percent of French and 11 percent of Germans.

This lack of innovation in customer experience has serious implications for loyalty. An important first step is to play an active role listening, and acting upon, customer feedback and key customer experience metrics. Those that are listening to customers and understanding which elements of the experience are working and which are letting customers down are best placed to improve, and ultimately exceed customer expectations.

So, what do customers want from their bank?

Our research shows that ultimately, they are not ready for a completely digital experience. Almost two thirds (63 percent) of consumers want the ability to chat or engage with a live agent or representative – this was highest in the UK and US, both with 70 percent.

From a customer experience perspective, what matters most is a  consistent level of service across both physical and digital channels – which was a requirement for 64 percent of consumers. Additionally, 62 percent said they want a frictionless flow of information across channels – confirming the frustration of being able to perform one action on one platform, but not another. Banks that create a truly omni-channel experience are best placed to create loyal customers.

Timeliness is also key, regardless of the channel that the customer chooses to engage with. More than half (57 percent) of consumers expect a real-time response to a query and they want that response to be on their preferred channel. UK and US consumers are more demanding in this regard, with 68 percent wanting real-time responses, while this was 47 percent and 44 percent in France and Germany respectively. If the consumer is making a complaint, the expectations increase even further, with 70 percent of consumers expecting an immediate response.

As well as maintaining a human element to the customer experience, consumers want their interactions to be personal – they want to be acknowledged as an important customer and expect to be treated on an individual level. Half the consumers in the study said they expect a personalised experience from their bank. Another 50 percent of Brits said they want the financial services companies they do repeat business with to know who they are. A third of all respondents said they want customer service agents to be instantly familiar with their customer history.

Ultimately, banks need to ensure they get the balance right between the human and digital customer experience. Digital and online banking services are vital to add convenience and provide basic levels of support, while human interaction is important for more complex enquiries. If banks do head towards a branchless model, they must be able to provide a personal, or human experience to keep customers loyal. This can be achieved by those digital channels that create a more human experience such as online chat. Most importantly, banks need to have systems in place that recognise each customer at an individual level and collect customer feedback on the customer experience. They also need to empower customer service agents with the right information, so they are able to provide the quick and personal experience that consumers demand.