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3 hurdles banks need to overcome

problems_banks_overcome

In this series we’ll be exploring the challenges the banking industry faces in creating a cohesive customer experience and the best ways to adopt an omnichannel approach. In this addition we’ll be looking at the obstacles banks face.

It takes 12 positive experiences to make up for one negative for the average customer. And the negative opinion of the banking industry peaked following the 2008 economic crisis, which damaged the reputations of many formerly trusted organizations to the point of near disrepair.

To this day, the financial sector is still working to rebuild the trust with its customers through improving service, adhering to tighter regulation and creating a more personal experience for the customer. Despite the steps the banks have so far taken towards this, there is still a long way to go.

Here we outline three key obstacles that the financial industry face in rebuilding customer trust and improving the customer experience.

1: Attitude vs. omnichannel

A key obstacle standing between the banks and the customer is the difficulty in adopting an omnichannel approach. Omnichannel describes an organization’s attempt to provide a seamless experience across all customer communication channels; in branch, contact centers, mobile, online etc…

Customers expect touch points to cross over digital and in-store channels. For example, checking in for a flight by scanning a code on a phone, and for their information or account with that company to be accessible through any channel, whether that be staff in a call centre, online chat, or in store.

In the omnichannel world, responsibility doesn’t lie with one department, but with every department in the organization. Omnichannel should be treated as an overall attitude that the company disseminates through its employees in every customer interaction.

When we think of the current structure of many financial institutions, branches are for selling, call centers are for servicing and digital is for marketing. But customers’ expectations have moved far beyond this model.

Becoming omnichannel requires a different approach to hiring and training staff, an area where banks are now starting to invest. In fact, the “Innovation in Retail Banking Study” by Emfa and Infosys Finicle found that channel innovation is the primary focus of banks globally, with 89 percent saying they were increasing their investment.

2: Product-centered instead of customer-centered cultures

The financial industry's current focus on selling products is blinkering their marketing strategy and service offering to customers.

Current marketing campaigns promote new current accounts, credit cards and mortgage services, but what if the marketing message honed in on what a particular customer was searching for on the website or which platform they are most commonly using? Consumers don’t think in terms of new product timelines or channels, so it seems outdated to market products in this way.

The banking sector could benefit from a customer-first approach, segmenting customers by behaviors rather than product. Imagine John and Serena have similar incomes and outgoings to their bank account. In the current marketing strategy, both might be put in the same customer segment. But John manages his finances via a mobile app, and Serena does all of her banking in branch. The Bank could increase revenue and dramatically improve the customer experience by looking at the data from various online and offline touch points and tailor their communications accordingly.

3: Poor “customer listening” skills

In recent years, banks have positioned themselves as trusted advisors and consultants to their customers, but few have figured out how to execute this with great customer service and listening to the customer’s needs. This can be attributed to the product-centered model described above, where emphasis in branch is put on the hard sell.

This is where technology can help. By uncovering invaluable insights in customer data from across all channels, analytics can help spot customer trends and needs and ultimately improve the omnichannel customer experience.

Revenue can also be increased by taking customer data from both digital and in-branch touch points. The banking sector will be able to utilize valuable and calculated information that is relevant to customers, rather than pushing for a sale on promoted products. This approach means that customer service is significantly improved in every channel, with a customer’s needs matched with the most relevant member of staff, regardless of location. Really smart approaches may also integrate deeper-level information about the customer and their banking history into the conversation to further enhance the relationship and the value of the interaction.

How to overcome the hurdles

The banking sector is now trying to catch up with the omnichannel customer experience adopted most successfully by retailers.

To achieve this, banks will have to discard the traditional organizational structure and attitude they have sustained for decades, and adopt a new outlook in the service they provide. The shift will break down segmented companies, with omnichannel adopted through every department, and the hard sell of products to a blanket segment of customers will become a customer centered service tailored to each individual’s needs.

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