By Hervé Mazenod, Managing Director, Financial Services Sector at Webhelp
You can almost hear the collective sigh of relief from financial service providers following their business operations being pushed to the limits during the pandemic. But as the industry creates its new roadmap for the future, we must take care not to lose sight of the massive gains we realised, albeit inadvertently, as a result of COVID. While pain and challenge grabbed the headlines, this was also a time of unparalleled development – where financial service brands rapidly adopted a renewed sense of purpose and delivered urgent, game-changing business transformations.
Since then, we’ve seen a slowdown in momentum – despite there being more pressure to optimise operational resilience, cost and service. In parallel, members of the public still rank financial services 15th out of 16 industries in terms of public trust, according to the 2022 Edelman Trust Barometer. That’s despite a slight increase of 3% from last year.
It’s no secret that the financial services industry is grappling with a ‘perfect storm’ of political, environmental, social, technological, legal, and economic (PESTLE) challenges. All that, alongside managing pressure from shareholders to reduce the costs of service, improve revenue and delivery, and protect people and organizations from risks.
But there is another, harder reality – it’s time for some brands to face a few home truths regarding their response. The global financial services sector makes up around 20-25% of the global economy – we have the people, brains, passion, and power to proactively steer and redesign the global industry around challenges. So, by definition, we must accept some level of responsibility for the business pains we are now facing.
Creating great customer experiences, digitisation, responding to stricter regulation – these themes are nothing new. Over decades, scores of banks and insurers have responded to PESTLE challenges by implementing ambitious change programmes. And while there’s absolutely nothing wrong with aiming high, the problem comes when brands are unwilling to consider better ways of working than delivering big batch, inflexible, four-year plans. It can take months just to scope out the work, design a change, or run some trials. By the time brands implement these plans, everything has changed – they’ve got a new political situation, interest rates have gone up and they’re already behind the curve.
That way of working isn’t right for customers either. A key way for financial service firms to build trust with customers is to solve their problems when things go wrong. But research shows that 25% of customers couldn’t get their problem solved completely on the first contact – be it poor customer journeys, poorly-designed apps/tech, or failing automation.
These glitches could be viewed as being at odds with requirements of the FCA’s new Consumer Duty. It requires financial service companies to “deliver good outcomes for retail customers” and to compete “vigorously in the interests of customers, in line with its mission to better protect customers.”
The financial services industry is working hard to deliver customer experiences – bringing in new products and services, available easily through apps, and supported with ever-increasing due diligence requirements. And so change itself is not a problem – it’s the methodology that is. We cannot solve this by either tinkering around the edges or preparing wholly unwieldy plans. We must ‘change the change’, stop ‘analysis paralysis’, and take a more agile view in order to be more responsive – especially amid the looming recession – when financial services are grappling for talent in an employees’ market.
Retail and fintech: beacons for future innovation?
It’s widely acknowledged that fintech is leading the way in enabling rapid change and delivering milestones at pace. In parallel, we take lessons learned from the ‘best in class’ innovation emerging from retail, which has optimised customer journeys to a different level.
Take The Very Group for example – the company created a Customer Closeness Center (CCC) – an environment they can use to identify and test improvements to CX, customer journeys, and user experiences in a real customer environment, in real time. This involved gathering insights which inform key business changes and rolling out digital technologies such as chatbots. The Very Group also improved voice and email services on the front line, upgraded complaints management, and are delivering significant transformation of back office.
This transformation led to a 33% year-on-year reduction in average contacts, reduced cost by over £5 million in contact reductions alone, and achieved a 73% First Contact Resolution rate. It also achieved a 35% score on Net Promoter, based on customers who made contact using the telephone, which is more than 20% better than the industry average. It was effort, not luck, that saw them win several CX and innovation awards – particularly the way in which the group implemented change; linked up technology, data, process, and people; and tested and continuously improved the solution daily and weekly.
Changing the change brings happier customers, better employee engagement, and improved resilience and overall profitability. And there’s nothing stopping the rest of the financial services industry from becoming the next globally-leading industry for transforming operations and delivering integrated customer experience.
