What You Need to Know About Customer Experience in Financial Services
The first in our series of articles looking at how customer experience differs per industry and what the additional challenges for each one are.
There are some steps a solid customer experience strategy should always follow, regardless of the sector it is implemented in, including putting the customer first, providing a timely response to queries, ensuring a choice of contact points and putting them into an omni-channel model, and always trying to stay ahead of an issue so it cannot escalate into something much more difficult to solve down the line.
SEE ALSO: The Trending Topics in Customer Experience
And then there are elements that are specific to the industry; Sure's Customer Experience Director called telecoms "complex" compared to other sectors, and YO! Sushi's People Director said that within hospitality people don't have to go to a particular establishment, so the big challenge is providing such a great CX that they want to come back and tell their friends and family about their experience.
So, what makes customer experience in financial services more challenging and how are CX leaders overcoming these hurdles? We asked experts from Standard Life, Direct Line Group, Premium Credit Ltd and more.
Issue of Trust
First and foremost there is of course the precarious issue of trust, which has received a major hit in the banking sector in particular and has rippled throughout the entire financial service industry - even to other areas (just think of the horsemeat scandal, which dominated UK headlines in 2013).
Richard Beaven, Former Operations Director of the Insurance Division at Lloyds Banking Group, went as far as to say that "we are no longer trusted to put the customer at the heart of thinking", at the recent Customer Experience Transformation: Insurance conference in London.
But once you've established that issue, how can you (re)gain trust from your customer base?
According to Beaven it is all in reducing customer effort. If a customer has a claim and they call up they want to get it sorted there and then. So giving the guys on the front line the capability to resolve such issues over the various contact points will add incredible value.
He explained that in his former role at Lloyds banking Group on average it would take an astonishing 38 days for a health claim to be paid. On one occasions the customer even passed away before the claim had been processed.
Eliminating this delay and decreasing effort will result in happier customers and an empowered front line team, he said. Which, of course, ultimately will lead to a more loyal customer base and a trusting relationship.
Head of Marketing at Direct Line Group, Mark Evans, also put an emphasis on taking the hassle out of a claim, or other interaction with your customers.
He explained: "There is an important nuance within insurance that differentiates us from other industries, in that the key moment of truth when utility is provided is when the customer makes a claim. However this is a relatively infrequent occurrence.
"At the time that customers lives have been impacted and we need to get them back on track as fast as possible, being efficient and taking all the hassle out of the process is the focus of our Direct Line 'fixer' approach."
Slow Adoption of CX
In addition, Adam Morghem, Head of Marketing at Premium Credit Ltd, highlighted that the difference between financial services and other industries is that the former has been slower to adopt customer experience strategies.
"This is not all the company's fault," he argued, "they are traditionally conservative, with ancient systems and are steeped in tradition. This often dates back many tens; if not hundreds, of years and anyone who has tried to teach an elderly relative to use an iPad will know that it's new and foreign.
"That said, it's certainly true that the financial services industry can do more - much more. Even the most sedentary of populations will move if pushed or ignored long enough."
If you're facing the same issues within your company, what steps can you take to adopt CX strategies and elevate the customer's experience?
Morghem has a tried and tested tip for financial services companies. He said: "At RSA [where he previously worked] we opened a customer dialogue to understand where we were doing well and where we needed to improve.
"Senior management took the responsibility to contact those who felt that we were failing and to listen to their concerns. The outcome was that customers felt they were being heard and; most importantly, saw action taken."
This aligns well with the comments of Stephen Ingledew, Managing Director Customer & Marketing at Standard Life, who previously said that financial services companies should be more like retailers and highlighted the importance of "emotional engagement".
He said: One positive of financial services marketing and customer engagement, is that we are helping families secure their financial futures. There are huge opportunities to engage with customers on an emotional level. But there is also a certain level of apathy, if people don't feel that their goals are achievable, or would rather not think about the future. So the challenge for us is to overcome this inertia and show people, in easy, simple steps, how to engage with their savings.
"There is a lot we can learn from other industries. If you look at retail or distribution, these sectors have historically been much better at engaging with customers, partly helped by the fact that their products are tangible. Applying thinking from the retail sector to savings is helping us build more of an emotional connection with our customers."
He added that the emotional approach is one they're aiming for at Standard Life: "We try to shift the way we do our communications and marketing to give customer experience much more that element of emotional engagement and understanding, rather than just presenting facts."
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What are your thoughts on the difference in customer experience approaches across industries? Which sectors have a more challenging road ahead, and which should be looked at for inspiration?
Email email@example.com with your thoughts and we may include them in one of our future CX spotlights on another industry.