Today’s financial services organizations covet customer insight and understanding like never before. It represents the key to growth and profitability in an industry increasingly saddled with a more stringent regulatory environment, as well as diminished product differentiation and more limited fee-based revenue opportunities. Our current banking climate calls on financial institutions to adjust their customer service strategies to create a more profound and robust customer experience.
Oracle recently took stock of the state of the customer experience across 12 industries, including financial services. As part of the study, titled “Global Insights on Succeeding in the Customer Experience Era,” Oracle surveyed 227 senior financial services executives in 18 countries regarding their organizations’ investment in customer behavior solutions. The study looked at the potential financial impact of the customer experience, the challenges businesses face while delivering that experience and the programs and initiatives that have been most effective in delivering results.
The findings shed light on an important industry reality. We found significant urgency to create more engaging relationships with customers based on their behavior within and outside their banking relationships to drive new revenue, especially in light of margin pressures and subpar return on equity in the United States and Europe. At the same time, financial services organizations are seeking to streamline duplicate systems and reduce costs. The two objectives ‒ expanded customer experience focus and streamlined infrastructure ‒ need not be mutually exclusive.
The Missing 18%
A key finding suggests that while financial services executives recognize the importance of complete customer satisfaction, they are not always quick to address it. Financial services organizations must implement flexible processes and systems, both on premise and in the cloud, to serve customers through their entire experience lifecycle. Over 75% of executives surveyed believe their customers’ experiences impact brand advocacy. It is the responsibility of the institution to continually listen, measure, test and adjust the customer approach in real time. Yet, only 23% of financial executives surveyed say they have an advanced customer experience program in place, allowing significant opportunity for institutions that can take that step.
The study highlights the need for executives to step up their customer experience game. For example, executives surveyed said that their organizations are unable to capitalize on an additional 18% of revenue, on average, by not offering a positive, consistent, and engaging customer experience. Cited obstacles to the improvement of customer engagement include technology limitations and lack of a 360 degreecustomer view across all touch points.
In an effort to maintain, or increase, that 18% percent of revenue, nearly a third of the financial services organizations indicated that they plan to soon invest in analytical tools to better understand customer behavior and gain an integrated view of customers and their needs. Ninety- three percent say that improving the customer experience is one of their top three priorities for the next two years. So, how does a financial institution shift out of idle and into full gear toward this goal?
Traditionally, the financial services sector has invested heavily in information technology, which can lay an important foundation for dynamic customer experience strategies. A single view of the customer is essential, yet remains a sticking point for many organizations as they struggle to manage an increasingly complex maze of custom one-off integrations between siloed information sources. Customer experience solutions that support a unified customer view, interactions across all channels, including social media, and a consistent high-quality experience across all channels form the bedrock for next-gen customer experience strategies.
Further, the ability to capture and leverage big data, in conjunction with customer experience solutions, provides an even more enhanced understanding of the customer from both an internal 360 degree perspective as well as an external social view. Robust analytics enable organizations to identify and analyze trends, thus supporting meaningful personalization and integration while driving continuous improvement. Financial institutions that employ a unified analytical approach with data conformity are able to offer flexible customer solutions for individual subject areas without compromising data consistency.
Successfully addressing the customer insight challenge involves not only defining processes and metrics, but taking that definition a step further to conclusive measurement. To optimize customer analytics and improve the cross-channel solution, financial service solutions must operationalize, distinguish and measure customer insight processes at an efficient speed.
As powerful as it is, technology alone cannot ensure an outstanding customer experience. Financial institutions need to dedicate resources to the creation of a comprehensive strategy that begins with research on customer behavior, fosters a customer-centric culture and works towards seamless experience delivery. Frequent evaluation throughout the improvement process is key and manageable. Conduct timely, targeted customer surveys to gather feedback and gauge overall satisfaction. The proactive and personalized communication with customers will deepen engagement as they know their voice is being heard. As a part of customer research, map out the customer journey throughout institution touch points.
Prioritizing the customer experience is the first step to identifying and setting in motion the people, process, and technology changes that will enable a financial institution to stand above the rest.
Mr. Midtbo is industry vice president, Financial Services Global Business Unit, at Redwood City, Calif.-based Oracle. He can be reached at [email protected].
Holly Hughes, BAI CMO, will share BAI’s latest banking channel research and host a conversation with Colleen Wilson, Vice President, Product at MANTL, on what the trends mean for financial services leaders....
Compliance training and professional development courses that are efficient, effective and on-point. Give your people the latest industry-approved tools they need to improve performance, reduce operational risk and better serve your customers.