Landon Barnes, Principal, CX Strategy Consulting at UserTesting
The banking sector, like many others, has faced a significant challenge as the pandemic forced a massive shift in the way financial institutions conducted business. While even traditional banks have been adjusting and modernising their approach in recent years, for example adding new features to online banking apps and the closure of some brick-and-mortar branches, the pandemic dramatically accelerated the pace of digitisation – an area in which fintechs were already excelling.
The pace of change means banks need to be more conscious than ever before that they’re rebuilding customer loyalty – the vital ingredient for customer retention. One way financial institutions can ensure they’re building this is by looking at overall customer experience (CX) delivered across all touchpoints.
While CX has increasingly become a focus in establishing loyalty, one of the most vital success factors for it is often overlooked; empathy. Customer empathy means building a deeper understanding of customers – who they are, what they’re going through, and their motivations. It enables banks to deliver meaningful experiences that best meet customers’ needs.
Finance as a whole is among many sectors which have room for improvement in delivering empathy-driven CX, often struggling to assess and measure empathy as it is an intangible metric. That’s why we undertook research to create the UK Banking Empathy Experience Index (EXi), establishing a benchmark by which both traditional banks and fintechs are measured on their ability to offer empathy-driven experiences.
From a study of 3,820 individuals, the report ranks the biggest names in British banking on how well they’re delivering empathy-driven CX, with Nationwide coming top of the leaderboard, the only traditional bank to score above the average of 57.2, with a score of 61.20. This was followed closely by fintechs including Monzo (59.89) and HSBC’s fintech-style brand, First Direct Bank (59.01).
In undertaking this research we were able to not only rank the UK’s banking industry but also identify clear room for improvement in the sector. Only 12% of traditional bank customers and 15% of fintech customers reported they receive ‘excellent’ experiences from their current provider. This was also reflected in the number of customers tempted to switch, with 22% of fintech customers and 18% of traditional bank customers seriously considering changing providers in the next year.
Based on our analysis of the current state of customer empathy in the sector, we’ve identified three key recommendations for banks to improve their empathy-driven experiences and maximise customer loyalty.
- Take what your customers love about in-person transactions into the digital experience
While banking is an increasingly digital space, customers don’t want to give up the sense of personal connection with their bank. Banking is about more than just knowing the balance of their accounts; it’s about the feeling of walking into a brick-and-mortar branch for a conversation with an employee who already knows their name and needs. This type of interpersonal connection and sense of community creates a trust that banks must work to embed into their digital experiences.
Our report found that NatWest is great at doing this by understanding its customers’ needs at specific moments, even in a digital environment. NatWest recognises that its customers may experience times of financial difficulty and has designed experiences to help them; these include training employees to recognise the signs of someone who is struggling, as well as speaking to customers to recommend services that can help them. The positive response to this has shown that if you keep your customers’ best interests at heart, they will repay you with loyalty.
- Consider employee experience
Brands often overlook the incredible link between customer and employee experience. Interactions with happy employees generally lead to happier customers, and employees who feel like their company is empathising with them will do a better job empathising with customers.
We’ve all had customer service interactions where it’s painfully obvious the person serving you doesn’t care about your overall experience. By engaging with employees and demonstrating the importance of their work, management can ensure their teams feel valued, positively affecting the customer experience. Try shining a spotlight on examples of excellent customer experiences throughout the company, showing the amazing things employees can do for customers.
It’s vital that as financial institutions are mapping out their customer journey, they simultaneously assess their employee experience. Collecting insights from employees can also help identify friction points that may be missed when looking through the perspective of senior staff only, and can help employees feel valued and heard by the company.
- Provide your customers with an exceptional experience
We now are in a time where customer expectations are higher than ever, and firms/institutions are competing with their customers’ last exceptional experience, no matter the industry. It’s no longer enough for businesses to compare against competitors in their industry but instead must look beyond, to examples of best-in-class customer experience from across all other industries.
Identify the ultimate experiences your customers receive elsewhere as a source of inspiration, and consider how to adopt features of these interactions into your own business. To remain competitive and build loyalty, it’s vital that you deliver meaningful and memorable experiences to your customers that go above and beyond their expectations.
By keeping these three focuses in mind, you can upgrade your customer’s experience, build empathy and reap the benefit of loyalty from customers who feel connected to and truly understood.
