Banking Spotlight: How Customer Experience Affects Growth, and Why Banks Should Take Notice

by Anne Guenther
April 25, 2018

In banking, your customer experience (CX) program is a pivotal factor for growth – or stagnation. In fact, one of the most pervasive market challenges in banking is customer centricity and how to transform this focus on the customer into a modern program that can attract and grow customers in a rapidly evolving ecosystem.

While CX has been a media buzzword for years, in practice it’s actually not that widespread in the banking space. According to a study by Deloitte, the U.S. banking industry is playing catch up in relation to implementing customer experience programs.  Large national banks lead at 55% with defined CX programs followed by regional banks at 50%, credit unions at 27%, and community banks at 16%. There’s obviously a gap, especially for regional banks, credit unions and community banks.

Customer experience programs are not pervasive in many types/sizes of banks (Source: Deloitte 2018 Banking Industry Outlook, DBR Research© February 2017 The Financial Brand)

Part of the lag is due to slower adoption of the cloud and making the move from on-premises or legacy systems. This move is a game-changer to modernize the customer experience as cloud-based applications offer banks and their clientele a more reliable solution than traditional methods of hosting these services internally, since they can be accessed at anytime, anywhere. Furthermore, cloud-based solutions can help better manage costs and improve operational efficiency ensuring that the customer experience – from transactional activity to everyday communications – is reliable and scalable.

Digital transformation: Welcome to ‘smart’ banking 

This move to the cloud is especially relevant in relation to the breadth and depth of services that customers nowadays demand as methods to conduct their banking. They want immediate answers from customer service via chat windows, social media, and text messages. A driver for this shift involves the demographics of new customers who seek a more omni-channel experience that caters to greater mobility and convenience when interacting with their banks. As such, the shift is prompting banks to invest in technology that will enhance their CX across channels. And with more channels, there’s more data – and more ways in which this data can be translated into predictive analytics to better understand customer behavior. It’s like cognitive or ‘smart’ banking.

To make this transformation, there’s a process and a system, and the system helps to enable the process. For instance, your customers or members expect a simple and frictionless experience that is seamless, mobile and secure. This involves addressing the needs of customers across all channels –  those who use online banking and apps, call contact centers, and visit branches – and establishing the internal processes to support the customer journey over time. The system can actually have a dual role: enabling the process as well as acting as a catalyst to evolve the process to meet forward-looking strategies for growth.

This is where cloud-based solutions like Unified Communications as a Service (UCaaS) come into play. UCaaS involves the integration of multiple applications with a unified interface across devices and media types to simplify the user experience in a way that represents how customers want to interact with their banking institutions – like mobile banking, instant messaging (chat), video banking, contact centers, and digital branches. 

Driving innovation to keep up with your peers – and customers 

In a study conducted by SourceMedia and American Banker, tech-savvy leaders at banks and credit unions were surveyed to gain insight into their timeline for implementing unified communications (UC). Over 50% agreed on the value of UC in improving the customer experience or internal processes, and an impressive 57% reported already implementing UC. Yet only 18% said they understand UC well.

Why unify communications now?

The way customers and their banks interact is shifting. By 2020, roughly 2B customers will conduct banking on mobile phones — far more than online.* They expect a consistent experience across all service channels and banks are noticing:

Source: SourceMedia and American Banker study: Developing a unified communications strategy: How to streamline and coordinate customer interactions across banking channels, 2018

Looking at the data, it is clear that banking industry leaders understands that importance of driving innovation, and adopting new customer centric technologies like cloud and UC. However, the specific understanding of the technology itself, and what it can do, might lag just slightly further behind. That’s a gap that needs to be closed soon, since it’s clear customers are already heading in that direction.

To help with the understanding of UC and learn more about driving innovation and CX, download  the SourceMedia Research and American Banker whitepaper Developing a Unified Communications Strategy, sponsored by Windstream Enterprise,  which provides industry expertise in relation to key considerations and approaches to building your UC strategy. With the acceleration of the banking industry’s digital transformation and availability of UCaaS solutions, you have the opportunity to lead – not lag — with your bank’s customer experience.