The Advisory Career

Keeping Your Clients: A Refocus On Retention

Four factors of successful customer-centered financial services

by Eric Rosenzweig

Mr. Rosenzweig is Managing Director, Financial Services, with Kin + Carta, a global digital transformation business, which recently published the 2020 Change Report. He is responsible for all client relationships, overall delivery execution and strategic portfolio growth.

For several years, Capital One, a financial institution with more than 25 years of industry experience, has been releasing unique ads for its latest iteration – Capital One Cafes. The alliterative idea received its fair share of mockery for its notion of combining coffee shop culture with financial services.

However, the idea is illustrative of the industry’s broad transition away from cost-based product offerings toward customer experience-oriented initiatives. According to Temkin Experience Rankings, 69% of customers who abandon their banks cite poor service as the impetus for their decision. As a result, 2019 saw financial services providers reach significant milestones in their approach to customer retention and profitability by becoming more customer-driven than ever before.

For leaders, the implications are enormous. As customer demands shift and digital platforms expand the number of niche offers, many organizations are being forced to adapt or be left behind.

Simply put, in 2020 and beyond, customer service, and the technologies that power this priority, will be increasingly critical to success. For small operations and big banks alike, here are four implications of a customer-centered financial services sector.

Clients Demand ‘Fricitonless’ Experience

According to a study on customer expectations within the financial sector, 40% of a bank’s clients are more inclined to remain loyal to a platform that offers a personalized experience.

Similarly, more than half of a bank’s clients are looking for a seamless, omnichannel in-person and virtual experience that is uniquely personalized. To meet this demand, today’s financial institutions need robust in-person offerings, but they need to provide parallel services through their web and mobile platforms that are just as interpersonal.

Moreover, as the recent coronavirus crisis illuminates, there is a prominent need for advanced access to financial information and usability mechanisms that are accessible even when bank branches close. Even before social distancing became a colloquial expression, people were mobile-first, a priority that is both convenient and, at times, critical to success.

Most importantly, while customers want to connect with companies in many different ways, they are looking for a singular feature on every platform – a human experience without delay.

Of course, as organizations work to bring real-time services to their customers, leaders will be forced to reconsider their priorities in the give-and-take of customer experience, organizational efficiency, employee experience, and corporate liability.

Financial Services Companies Are Tech Companies (And Vice Versa)

In 2019, some of the largest and most prolific tech companies took significant steps toward becoming financial services companies.

Most notably, Apple launched the Apple Card, a direct financial product that accompanies its integrated software and hardware offerings. Apple Card, which began with the backing of Goldman Sachs, had a rocky start, as its algorithms were accused of discriminating against women, but, in general, the product is well-received. Primarily, it’s indicative of a broad trend among tech companies.

Facebook first attempted to launch a cryptocurrency in conjunction with dozens of big banks and fintech companies, and, when that effort fell flat, released Facebook Pay, a service that will facilitate transactions on its platforms and between its billions of users. In addition, Google will begin offering checking accounts to its users through a partnership with Citi Group.

Taken together, it’s clear that, regardless of a company’s designated sector, many platforms are becoming financial service providers, and many already in the financial services sector are reimagining themselves as tech companies. Consequently, banking is getting broader. For existing companies, this means that they may need to adjust their aesthetics, brand ethos, and product offers to compete with tech companies that are meeting customers where they already spend a significant portion of their time.

Every company is somewhere on their journey of becoming a fully digital-enabled business. However, leaders need to be careful that, as they embrace this transition, they don’t denounce or vilify their primary industry. Otherwise, leaders are prone to pursue aimless strategies that can eclipse more attainable opportunities for growth.

AI: Delivering More Efficient, Empathetic Customer Service

In many ways, a personalized customer service experience requires companies to capitalize on the mountains of data that they already collect and store. Interestingly, while more than 2.5 quintillion bytes of data are generated every day, and 90% of the world’s data was created in the past several years, making it a particularly prescient resource for companies, trying to develop a data-driven customer experience is still a challenge.

Taken together, it’s clear that, regardless of a company’s designated sector, many platforms are becoming financial service providers, and many already in the financial services sector are reimagining themselves as tech companies. Consequently, for example, banking is getting broader

When it comes to producing a more efficient, empathetic, and consistent customer service experience, data is like water. It’s the resource needed for the initiative to survive. Unfortunately, many companies are drowning in data, unable to capitalize on its potential to create new and better customer experiences. Thankfully, developments in artificial intelligence are making it possible to harness vast amounts of siloed information, translating it into meaningful, actionable insights that platforms can use to craft the customer experience that users demand.

Google and a collection of SaaS startups are allowing companies to achieve unique insights into complex and elusive human behaviors that can help companies respond to their customers’ shifting wants and needs.

Similarly, artificial intelligence is enabling new technologies like AI-powered chatbots to offer 24/7 human-like support. Already dozens of out-of-the-box products have come to market, and some companies are opting to develop their own chatbot from the ground up. In total, it’s expected that $4.5 billion will be invested in this technology by next year. For financial service providers, it’s estimated that 90% of their customer interactions will include chatbots.

AI-powered chatbots are quickly becoming a ubiquitous part of the online experience, and customers are responding positively to their implementation. What’s more, there are many benefits of AI-powered chatbots, including:

  • Providing always-accessible customer support that includes human-like qualities
  • Freeing customer service personnel to handle more complicated support requests
  • Offering an easy-to-use, virtual service for an increasingly digital-first customer base
  • Developing a data-driven feedback loop based on customer engagement
  • Meeting customer expectations for immediacy and accessibility

A real-time customer service experience has proven to unlock new revenue streams, increase capabilities, and identify areas of growth across many different industries.

Now with the emergence of artificial intelligence, the far-reaching financial services sector is positioned to create new and better customer experiences using the data that they already have. However, after years of passively collecting customer data, it’s time to put that information to work to create an immersive customer service-centered experience.

How Internal Adaptations Produce Real-Time Enabled Experiences

As anyone who has ever experienced an organizational reprioritization will testify, change is challenging. Indeed, organizational change requires a holistic effort that transcends just a rebranding effort. It’s a reorientation of the entire company ethos to best position the platform for success now and in the years ahead.

Most importantly, change is a process that requires real leadership, people who will embrace the symbiotic maturation of new opportunities and new tools to provide the best possible customer experience.

In this sense, tried and true tactics like preaching “customer obsession” won’t be enough to get the job done. Instead, leaders need to set clear goals and priorities to make real-time enabled experiences a reality.

In general, this means:

  • Measuring Success Categories
    Identify a “North Star Metric” for success that every team member can prioritize and work towards.
  • Engage employees in the process
    Change is hard, and employees are on the front lines of these efforts. Putting your organization at the forefront of the latest opportunities and tools can inspire employee success, and their experiences and feedback will ensure a seamless implementation of new customer experience criteria.
  • Avoid Multi-Directional Initiatives
    Customer service teams are being asked to do more with more. They have more data than ever before, and they are trying to seamlessly meet customers exactly where they are with the solutions that they most urgently need. All of this capability can make things confusing.

Along the way, it’s ok to incrementally develop a custom-center culture. Progress rarely occurs without some degree of failure. Instead, be specific about where your organization is headed and get creative in your pursuit of those ends.

Clients Demand ‘Compelling Experience’

Undoubtedly, customer experience is surpassing traditional differentiators like low rates or fees meant to entice new customers and retain existing ones.

In many ways, the foundation of business is the old adage “the customer is always right.” Now, customers have recognized their place, and they are looking for companies in every sector to provide a compelling experience. In 2020 and beyond, it’s a prerequisite for loyalty, which means that it’s something that financial service providers have to embrace.

By building products that cater to customers’ desires for an immediate, frictionless, comprehensive experience and by continually refining those efforts through data-driven, reflective practices, any company can ready itself to meet the moment.

Capital One Cafes may not be the idea that transforms the industry, but they stand as an emblem for change that should remind every financial service provider that the customer experience comes first, and they know it.