Customer eXperience programmes in Financial Services 2013

Customer Experience Management Survey 2013

Customer Experience Programmes in Financial Services 2013

A survey from


About this survey

The aim of this survey, conducted in August 2013, was to get a snapshot of how banks are taking action to improve customer satisfaction, by focusing on how a customer interacts with the bank – from the products and channels on offer, communications with bank representatives, through to complaint handling and resolution.

This online survey received 103 responses from 52 different European retail financial groups and card bodies across 12 countries, with the UK having the largest number of respondents.

Executive summary

• 95 per cent of responders have either completed a customer experience management transformation programme, are in the midst of one or are planning one.

• The need to ensure customers get an appropriately consistent service as they move across channels is driving investment in integrated multi-channel delivery. But legacy infrastructure is the biggest hurdle to achieving this goal.

• Trust and reputation trump loyalty and advocacy as the key values banks would like to encapsulate in their interactions with customers.

• A head of customer experience has been appointed by 40 per cent of banks to take responsibility for these programmes. But they are not in it alone. 61 per cent of respondents say that C-level executives have an active role to play in developing day-to-day customer strategies. At most banks, budget for customer experience programmes is held by various lines of business.

• Smartphone market penetration and the rise of mobile banking services are seen as the biggest trends affecting the customer experience.

• Big Data ranked second in importance as banks seek to scour the masses of data they have to spot trends and inter-relationships that would previously have gone ignored, and turn this into actionable intelligence to improve customer interactions and satisfaction.

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3

Unlike some bank projects, such as compliance initiatives, customer experience (CX)is not something that can be addressed once, finalised and translated to business-as-usual activity. It is really a journey of constant refinement. Despite this, 15 per cent of respondents claim to have completed extensive customer experience programmes.

As banks took a reputational beating during and after the global financial crisis, some of the most affected banking groups have undertaken significant re-engineering of bank management structures. This has often included investment in new senior management roles and training customer service staff who are tasked with evaluating, measuring and quickly fixing the problems that are driving customer dissatisfaction.

The number of banks investing in customer experience management is on the rise. The trend is being accelerated as banks at the leading edge of customer engagement make their achievements known through their quarterly /annual reports and media. 60 per cent of respondents say they are in the middle of a customer experience programme, while a further 20 per cent are in the planning stage.

Q1: Enhancing the overall customer experience:

CX investment underway

My bank does not have the budget or resources for a customer experience project

My bank has already completed an extensive customer experience programme

My bank is planning on starting a project to enhance the overall customer experience

My bank is in the middle of a project to enhance the overall customer experience

15%

20%60%

5%


To get the best results from a customer experience programme, it has to be a business-led change underpinned by an integrated IT platform. If anything has been learned from large complex CRM software implementations over the past 15 years it is that programmes that are IT-led, focusing overtly on creating a magical single platform, can yield very little benefit for significant outlay.

Similarly, programmes that focus too much on sales conversion based on customer behaviour insight, rather than delivering an experience with the bank that is satisfying for the customer, often fail to live up to initial promises.

Enabling customers to move seamlessly across channels that are convenient for them, and provide access to products and service they require is absolutely key to customer satisfaction. This fact was recognised by 92 per cent of survey respondents, who said an integrated multi-channel delivery approach is necessary.

Q2: What programmes are necessary to ensure high levels of customer satisfaction? (Tick all that apply)

4

Getting satisfaction

An integrated multi-channel delivery programme

An enhanced digital offering

A single IT platform that eliminates product silos

Heavy investment in call-centres

83%

48%

20%

92%Trust

Reputation

Loyalty

Intimacy

Advocacy


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Engendering trust

The core function of a retail bank is to keep their customers’ money safe and to provide them with products and services to help manage their financial affairs. As a byproduct of this, banks also retain a lot of sensitive data. For these reasons it is not surprising to see trust ranked the most important value around which banks want to build their customer relationships. When trust is gone, a run on deposits can quickly cause a retail bank to fail in extreme circumstances.

But trust can take many forms. From the essential trust that my money is safe in the bank, to trust that if a problem arises in dealing with the bank, my requests and complaints will be taken seriously and handled efficiently.

The value that most polarised survey respondents was advocacy, with 20 per cent ranking it a top priority, but 36 per cent ranking it last.

Q3: Which values are important when developing customer experience programmes?

17%

13%

18%

20%

35% Trust

Reputation

Loyalty

Intimacy

Advocacy

30%

28%

14%

8%

20%

17%

35%

21%

8%

17%

21%

14%

24%

28%

12%

15%

10%

23%

36%

16%

1 2 3 4 5


Almost all banks surveyed are at least in the planning phase of a customer experience programme. Although ultimately CEOs take final responsibility, a growing number of financial institutions are appointing heads of customer experience to oversee the details of the programme.

40 per cent of respondents claim to have a head of customer experience in their organisation. Where this role does not exist, responsibility tends to lie with the product or marketing heads to drive customer experience strategies for the organisation

Q4: Who in your organisation is most responsible for driving the customer experience?

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Who is in charge?

Head of customer experience

Head of product

Head of marketing

Head of sales

Head of IT

24%

19%

15%

40%

2%


7

Obstacles to improvement

While government regulation is providing a push for banks to improve their customer service in many markets (for example the UK’s FSA requiring that banks publish complaints data), regulatory compliance is not seen by most as a hindrance to improving satisfaction. But IT system complexity and lack of integration is. 37 per cent of respondents say their organisation’s legacy infrastructure is the biggest hurdle to better customer service.

Although there is a lot of hype in the market from organisations and individuals promising to help banks embed a customer-centric culture as part of their transformation projects, internal culture was only seen as an obstacle by 16 per cent of respondents.

If an organisation’s customer experience champions can’t find the budget to effectively deliver higher customer service (a challenge for 20 per cent of respondents), everything else becomes more difficult. But with buy-in from senior management levels, budget in place and the right strategy, there are a range of solutions in the market to help banks leap over the IT hurdle.

Q5: What most stops your organisation from delivering high levels of ongoing customer service?

15%

19%

40%

Legacy Infrastructure

Budget

Lack of internal strategy

Internal Culture

Regulations

24%

2%

20%

19%

16%37%

8%


Large customer experience programmes may draw budget from a number of areas within a bank, depending on the component project. For example, channel integration or deployment of a solution for monitoring data about customer interactions might come from an IT budget, whereas staff training might come from human resources, sales or product.

In any case, the line of business is seen as the major source of funding for customer experience programmes, with more than half (51 per cent) saying the majority of budget came from here.

In Q4, we saw that the head of customer experience was most often responsible for these programmes. This question suggests that these managers sit within the line of business structures, or if they have separate lines of reporting that they get most of their funding from the line of business.

Q6: Where does the majority of the budget for a customer experience programme come from?

8

19%

37%

Line of business

Marketing

Sales

IT

Customer services

20%

8%

Who holds the purse strings?

20%

12%

11%

51%

6%


9

Executive oversight

As many banks seek to rehabilitate their reputations after the global financial crisis, or to differentiate themselves from those that suffered the most during this period, C-level executives, marketing and investor relations teams have begun placing much more importance on customer satisfaction benchmarks as well as acquisition and retention figures.

They are no longer seen as just key performance indicators to be looked at quarterly in management appraisals or mentioned in reports if the results are good. Large drops in complaints or faster time to resolution are now numbers to sing and dance about. And as a result, the majority (61 per cent) of banks expect their C-level executives to play an active role in developing day-to-day customer strategies.

Q7: Do you believe that the C-Suite has an active role to play in developing day-to-day customer strategies?

31%

Strongly agree

Agree

Neutral

Somewhat agree

10%

30%

28%


Q8: Which trend is the most important in enabling the customer experience?

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The majority (58 per cent) of respondents see the trend for nearly universal smartphone penetration as having the biggest impact on how customers experience their banks. It has become such a critical channel for interaction that some customers will switch banks to make use of their preferred m-site or app.

Almost all banks today will have at least some kind of basic mobile channel, along with a business case for enhancements and development.

New customer acquisition will undoubtedly be a key part of that business case. But banks also need to consider how to align the customer’s mobile experience with other channels as well as the end-goal of their customer experience transformation journey.

As the mobile banking channel matures and becomes more integrated with a multi-channel approach to customer experience management, Big Data will play a bigger role. 18 per cent of respondents see this as the most important enabler for customer experience.

Banks generate vast amounts of data relating to customer behaviour and interactions across touch points. Growing mobile channel usage will only add to this, and banks need to find a way to analyse stored data, and monitor data in real time, to generate new product and service ideas and improve communication and personalised experiences.

Mobile and big data

58%

Mobile

Big data

Social media outreach

Loyalty programmes and vouchers

Cloud

4%

18%

11%

9%


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Q9: Which industry, outside of finance, do you think is delivering exceptional customer experience?

Looking for inspiration

When banks benchmark their customer satisfaction and experience delivery, they are looking not only at their peers, but also other industries. Multi-channel retail in particular is seen as providing examples of exceptional customer experience, with 56 per cent of survey respondents considering the leading companies in that sector good examples to emulate.

And there are some similarities. Like banking, the retail sector comprises companies that operate a mix of bricks and mortar and online channel, and those that are online only. But the financial industry is much more constrained by regulation in the range of customer data it is able to aggregate with other sources and use.

56%

Multi-channel retail

Travel and transport

Telcos

Local retail

11%

19%

14%


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Business

Customer eXperience programmes in Financial Services 2013