Best Practices for Banking & Building Loyalty
4 Ways to Use Digital Transformation to Enhance Customer Experience
In the evolving financial services landscape, customer experience has emerged as a key differentiator. With increasing competition, traditional banking institutions face mounting pressures to deliver frictionless, personalized, and technology-forward experiences.
CX encompasses every interaction a customer has with a bank, from opening an account to conducting transactions. Patrons have grown accustomed to seamless and fast experiences across in-person and digital platforms, and today’s banks must meet this expectation. According to the Zendesk Customer Experience Trends Report:
· 72% of customers want immediate service
· 70% expect anyone they interact with to have full context
· 62% think experiences should flow naturally between both physical and digital spaces
· 62% agree personalized recommendations are better than general ones
Following are four digital-transformation areas banks must master to drive superior CX in 2024:
Personalized Customer Engagement
When it comes to banking services, one size does not fit all. Today’s banks must tailor what they offer to customers, from custom loan solutions to varied banking packages that may include waived fees, higher interest rates, or VIP perks.
This is an area where data analytics, including predictive analytics, can be used to capture valuable insights into customer behaviors and preferences. Such data can be used to drive personalized experiences and provide more relevant offerings for greater satisfaction and loyalty.
For example, real-time analytics can provide guidance for customer service agents or bank tellers, enabling them to aggregate data from disparate systems to instantly formulate next-best actions. An agent could tap into credit report data while in conversation with the customer, and if they meet the required threshold score, upsell them on the spot to a preferred-customer lower-interest rate loan or more elite credit card program.
Of course, today’s customers also expect continuity of services via the channel of their choosing—mobile app, website, ATM, or in-person branch visits. For digital services, this also includes the use of chatbots to provide 24/7 assistance. Today’s AI-powered, interactive chatbots are becoming more natural and intuitive, with the ability to provide fast, accurate, and personalized answers. To this end, 48% of surveyed US bank executives say they plan to use genAI to enhance customer-facing chatbots and virtual assistants.
Security and Fraud Detection
Now more than ever, banks must prioritize cybersecurity to protect sensitive customer data and transactions, not only to build brand trust but to mitigate their own substantial risks. Such threats cannot be overstated. In 2023, the number of data compromises in the US financial services industry was 744, up from 138 in 2020, making it the second-most targeted industry by cyberattacks.
A multi-layered approach using advanced data encryption coupled with robust identity verification is required to prevent unauthorized access and fraud. Transaction monitoring is another crucial aspect, enabling banks to detect and respond swiftly to potential threats. Through the use of AI algorithms and machine learning, banks can analyze vast amounts of transactional data in real time to flag suspect behavior.
Importantly, banks must strive to balance requirements for stringent security with the need for frictionless CX. The goal is for security to operate seamlessly in the background.
Streamlined Digital Onboarding
Customer onboarding is a multifaceted process involving various procedures—regulatory compliance, credit assessment, risk management, and more. Many of these steps require customer effort as well as extended wait time. Perhaps this is why a full 90% of financial institutions experience digital abandonment, resulting in substantial revenue losses.
Simplifying online account-opening with more effective digitization of documentation and verification procedures can significantly reduce customer time and effort.
For instance, banks can leverage data analytics to expedite risk assessment. By analyzing vast amounts of data in this way, banks can quickly assess the creditworthiness of applicants for various services, speeding the approval process for eligible customers and enhancing satisfaction and loyalty.
Personal Financial Management Tools
An offshoot of personalized customer engagement, banks should be able to offer tailored, comprehensive financial insights to patrons using data/predictive analytics to visualize spending patterns and budgeting, for example, and to provide personalized recommendations to help reach financial goals.
With the ability to integrate with third-party fintech apps, they should also be able to aggregate data from various accounts for holistic financial management. Such integration enables the ability to conduct seamless transactions and transfers between the customer’s accounts.
Delivering Exceptional Customer Experience
By embracing digital transformation, banks can revolutionize the way they interact with customers— offering personalized, seamless, and secure services across all channels. However, such transformation is not just about adopting new technologies; it also requires a fundamental mindset and culture shift. Banks must prioritize customer-centricity to thrive in an increasingly competitive landscape.
Those that succeed in driving better CX through digital transformation will not only retain existing customers but attract new ones as well, positively impacting their bottom lines.
About the Author:
Amit Patel is a Senior Vice President at Consulting Solutions (https://www.consultingsolutions.com/), one of the fastest-growing IT workforce and consulting services providers in North America, where he leads its national consulting practice.