Tom Huxtable, Director, Thunderhead
Historically, building societies are seen as the epitome of trust and empathy.
They’ve always had customers at the heart of their business, and it’s fair to say that they operate on a relatively simple and robust principal of co-operation – something all companies should aspire to.
The business world today is facing an interesting challenge when it comes to customer engagement. As customers expect more, they are demanding higher levels of service and value and, according to a recent PWC Banking and Retail 2020 report, their level of trust is currently at an all-time low.
Interestingly though, this presents an opportunity for some B2C financial services to get ahead. They have the chance to meet customer expectations by emulating the original Building Society ethos.
How can consumer financial services drive long-term relationships, build trust and attend to customer’s needs in an era of digital transformation?
Here’s some key considerations –
Stay relevant amongst competition
Customer engagement is a fundamental driver for all industries but it can be hard to achieve. It can also be hard to stand out and lead the way when it comes to best practice in personal finance.
All financial services face pressures from new, dynamic market entrants, who have clout and power thanks to their scale and reach. These companies have made it easy for customers to carry out simple transactions online and via apps – which gives an overall more effortless service – something consumers crave as it fits around their busy life. Our customer journey with these kind of companies – not always banking – is smooth, effortless and the brands are visibly working with us rather than causing obstacles. To replicate this, providers can look at their customer journey and ensure the experience feels like a partnership, trying to understand the customer as much as possible and using insight from online and offline touch-points to meet the customers’ in the moment needs.
By championing customer loyalty and being local,financial services can conduct an extremely personalised service, using technology to assist. It’s time to extend personalization throughout the entire customer journey online and offline. This is a message highlighted in BCG’s recent Global Banking 2018: The Power of Personalization report, which stresses how retail banks who have implemented the most effective digital strategies – that cater to the customer convenience – are seeing an increase in economic benefit.
Breaking the mould: letting go of the outdated channel approach
An ongoing challenge for FS is adapting to changes in customer expectations around experience. Today’s consumer is anticipating seamless experience based on their preferences – and look for a buying experience that resembles a journey rather than a regimental process.
Banks and building societies, insurers and pension houses are holding pivotal conversations with their clients every day, and this dialogue is more than just data orientated. It’s important to get it right. A recent study conducted by Accenture highlighted that 89% of customers become frustrated with having to repeat their story to multiple representatives (unsurprisingly!). The relationship a customer has with your business will be fortified by demonstrating an in-depth knowledge of individual accounts.
Mindful customer engagement will equate to business growth
Bain & Company recently shared insights in the report titled, ‘Evolving the Customer Experience in Banking’as to how the customer experience in banking is ever-changing, demonstrating a view that slow adaptation to new technologies could be responsible for holding financial institutions back. For banks, this means they are “ vulnerable to losing the special status they once enjoyed”.
Customers expect a high standard of customer service from all of their investments, and their pursuit of value means they feel no loyalty to any one institution. With freedom of choice and a plethora of options, switching companies to find a better deal is the result if they receive inadequate service. Disruptor banks and lenders offer tempting deals, and if there is no fundamental loyalty in the existing relationship – it is very likely the customer will switch. Without any core client loyalty, financial institutions are at risk of losing significant growth/revenue. With that said, Monzo are without a doubt, true pioneers when it comes to creating value partnerships with customers in the financial services sector. Their recent public crowdfunding activity saw the bank invite its customers to invest up to £2,000 in a round that raised over £20,000,000 in just two days. The invitation favoured loyal customers, offering early access to those who had invested in previous rounds, and only offering eligibility to pre-existing customers. This innovative approach put community at the core of the business, and made customers feel part of something bold and exciting. A organic act of engagement and inclusion that saw the company rewarded royally.
Time to hit the reset button and inject a little 17c wisdom into customer relationships
When customers see incoming calls from a business, they can only assume that something is wrong or up fro renewal – why else would they be contacting you? What a shame. This perceived disinterest by financial services could be easily resolved by some timelier check-ins. How about a general chat that doesn’t involve discussing renewal? Yes, let’s put that in place!
Reinstalling the human element to business is essential to form customer loyalty. Timely and mindful interactions with a consumer will ultimately allow financial services to become more trustworthy. By observing, listening to crucial signals from personal conversations with customers, business will know the right platforms to invest in to understand customer intention and deliver what the customer really wants.
It is time to be human towards the customer and see them as people, not a financial bottom line.