Financial services

Customer experience in the digital age.

CX is a key business differentiator

Customer experience (CX) is a huge deal in financial services. In fiercely competitive and highly regulated markets, the experience you provide your customers is as important as the products and services you offer. If you get it right, the payoff can be huge.

New research from Harvard Business Review Analytic Services, sponsored by Verizon, shows that many financial services companies see CX as their main business differentiator — 62% say it’s a top-two differentiator. That puts it squarely on top of the pile — 37% say product/service quality is a top-two differentiator and 34% brand reputation1.

And CX isn’t just important to retail banks. It’s a key differentiator for investment banks too. In fact, a higher proportion of companies that are completely or primarily B2B than of those that are completely or primarily B2C say it’s a top-two differentiator — 64% vs. 52%1.

Over two-thirds (67%) of financial services companies in the survey say that their main competition comes from dominant established players. 10% say it’s from disruptive new entrants, and 27% from both1. Great CX can be highly effective against both incumbents and agile new entrants, and can deliver significant benefits to your bottom line.

But few companies are best-in-class

While CX is clearly a big focus for financial services companies, there’s plenty of room for improvement. Just half (54%) say that their scores for overall customer satisfaction have improved in the past two years – behind the figure for all industries (57%)1. Of course, the 2008 crash had a significant impact on the image of the financial services sector.

Financial services companies have a relatively low opinion of their own performance. Only 37% of financial services companies say they’re performing very well when it comes to CX1. And just 21% of financial services companies are best-in-class — they see CX as a key business differentiator and say they’re doing it well. That’s in line with the all-industry figure of 22%1.

CX a top priority

It’s not surprising then that well over half (56%) of financial services organizations say CX is one of their top three priorities over the next 12 months. And why a further 31% say it’s their number one priority1.

Drawing on the new research from Harvard Business Review Analytic Services, we’ll look at how you can overcome the barriers to delivering great CX and achieve competitive advantage.

In banking, you can’t separate the products from the experience. How we deliver is becoming more important than what we deliver.Head of innovation at one of the world’s largest banks1

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29% of financial services firms say they’ve gained market share because of excellent customer service1.

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Great customer experience provides a competitive edge. But many financial services organizations don’t think they’re performing very well in this area.

Customer experience in the digital age — financial services

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Digital drives CXFinancial services companies have recognized the importance of digital to delivering great CX. And they’re leading the way when it comes to engaging with customers through digital channels. 80% engage with customers online, compared with 70% across all industries, 48% use mobile apps (35% across all industries), and 60% use social platforms (53%)1.

Great technology is key to great CX. Financial services companies are ahead of most — but they still have a long way to go.

Top 3 barriers to CXAs with respondents across all sectors, financial services companies say organizational silos form the biggest barrier to improving CX. The next biggest is inflexible, outdated technology — ahead of cultural resistance, which is second on the list across all respondents.

CX has always been a key differentiator for financial services companies and it’s likely that many have already made great efforts to achieve a CX culture. But, in the digital age, customer expectations about how they interact with businesses are changing — they expect to be able to reach a business anytime, anywhere and from any device. Financial service companies feel less comfortable that they currently have the right tools in place to meet these expectations.

How to become best-in-class.

54% of financial services firms strongly believe that technology is as important as people to delivering great CX1.

“Figure 1: Biggest barriers to improving CX1.

Text/SMS

43%

30%

48%

35%

80%70%

44%38%

60%53%

Mobile apps

Online Mobile website

Social platforms

Financial services All organizations

Figure 2: How financial services companies engage with customers1.

49%

41%

Organizational silos

43%

30%

Inflexible, outdated technology

34%

38%

Cultural resistance

Financial servicesAll organizations

Customer experience in the digital age — financial services

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Aim for omnichannel

Today customers expect a seamless omnichannel experience, which gives them a consistent level of service regardless of how they engage with an organization. And that’s being made possible by the latest technologies.

Financial services companies see themselves as at the early stages of the omnichannel journey — they have multiple touchpoints with customers and have visibility of past interaction history across channels. Most have some way to go before they’re ready to offer a truly personalized service and anticipate customer needs. But they’re further down the path than organizations in most others sectors, which say they have multiple touchpoints but have no visibility of past customer interactions1.

Digital provides customer insightThe ability to collect and analyze data on customer behavior is key to achieving omnichannel CX. So it’s good that financial services companies report better than average visibility of customer data: 53% say customer data is integrated and accessible across some, but not all, platforms, compared with 43% across all sectors. But just 14% of financial services firms say they have a single customer view across all their platforms — that’s the same as the all-industry figure1.

Opportunities to improve digital CX

Financial services companies — whether they’re in consumer banking, wealth management, trading or capital markets — are recognizing that customer expectations have changed. Customers expect to be able to interact and transact in a vast number of ways — and for that interaction to be personalized. In the digital age, you need to focus on completely different CX differentiators. Thankfully, today’s technology is up to the task.

Customer expectations of interaction mean you need to retool and refine all your customer channels — physical and virtual. For example, a chat application that offers secure text, audio and video interaction (over the public internet), and secure archiving, offers a host of benefits and a remarkably different customer experience. And providing access to such an application from multiple devices offers the anytime, anywhere experience that’s now essential to win and retain customers.

The back-end integration of web and mobile channels enables the collection and management of data to inform new and compelling customer experiences. Availability, scalability and reliability of systems, applications, connectivity and storage are essential to delivering great CX and establishing a credible and trusted brand.

Only 20% of financial services companies say the quality of their CX is consistent across all channels1.

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Delivering great CX in the digital age means combining a simple, intuitive self-service model with a personal and engaging experience made possible by sophisticated analytics and new systems of engagement1.

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Figure 3: Steps taken in financial services to improve digital CX1.

49%

Increased responsiveness

Customer self-service options

Engaging web interfaces

Personalization

56%

34%

51%

Multi-function mobile apps

39%

Omnichannel experience

29%

24/7 online chat

17%

Customer experience in the digital age — financial services

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Who leads digital CX strategy?

CDO CIOCMO

12%

7% 8%

13%

22% 22%

Who chooses digital CX technologies?

CDO CIOCMO

12%

7%

25%27%

10% 10%

Financial services All organizations

CX isn’t just about customer service and sales, it depends upon every part of an organization. Embedding a CX culture can mean far-reaching organizational change and requires champions across the business.

A strong CMO/CIO partnership12% of financial services companies have a CDO who leads digital strategy and chooses the technologies to enable it1. But for the majority, the relationship between the CMO and CIO remains key.

The good news is that 45% of financial services companies say their CMO and CIO form a well-matched partnership and collaborate productively for a common goal. That’s well ahead of the overall average across all sectors of 34%. But 40% say they are either reluctant allies or distant relations1.

To achieve great customer experience, you need to break down organizational silos.

Tackle the hard stuff.

1 Data from a 2015 Harvard Business Review Analytic Services survey, sponsored by Verizon.

The view from Verizon

For many organizations, delivering great CX means pushing through wholesale change. Transformation projects are challenging. But every step that you take to make your IT infrastructure more manageable, flexible and scalable can help your whole business. Choosing the right partners can help you achieve digital transformation and bring IT and business goals into closer alignment. This is critical not only to improving CX, but also attracting and retaining new talent, and building a sustainable competitive advantage.

About this research“Customer experience in the digital age”, the new report from Harvard Business Review Analytic Services, sponsored by Verizon, is based on 494 responses. The respondents represent all key organizational functions, a broad range of business sizes, many countries around the world, and six key vertical sectors.

Read the full report: www.verizonenterprise.com/hbrcx

Figure 4: Who has responsibility for digital CX?1.

Who leads digital CX strategy?

CDO CIOCMO

12%

7% 8%

13%

22% 22%

Who chooses digital CX technologies?

CDO CIOCMO

12%

7%

25%27%

10% 10%

Financial services All organizations

Customer experience in the digital age — financial services