Digital Transformation in Banking: The Customer Experience Expectation Gap

by | May 11, 2021

The Impact Of Digital Transformation On CX In Banking

Doxim recently co-hosted a webinar with The Financial Brand. One of the discussion points was the state of digital transformation in banking, and how it impacts customer experience.

According to guest speaker Jim Marous, owner of the Digital Banking Report and Co-Publisher of The Financial Brand, there is a massive performance gap between what banking customers expect when it comes to customer experience (in general, across channels) and what banks are providing.

“66% of customers expect finance companies to understand their unique needs and expectations. But only 27% of customers feel the financial services industry provides great service and support.”

Banking industry not meeting customer expectations
The bottom line is, prior to the pandemic, banks were not meeting customer experience expectations and this “gap of dissatisfaction” has widened notably since.

Consumers are now more demanding, expecting their financial institutions to not only manage their financial affairs but also contribute to an improvement in their quality of life. As much as 59% of customers agreed that the crisis raised their standard for customer services.

Here are some of the key takeaways from the webinar relating to digital transformation in banking, and the impact on CX:

Banks need to work towards customer insight maturity

Customer insight maturity relates to the degree of accuracy and comprehensiveness of the bank’s insight into each customer. This is important, as customer insight maturity directly affects engagement and customer satisfaction.

When a bank has a high level of customer insight maturity, it means the institution knows and understands their customer and rewards them from the beginning of the relationship onwards. From the moment the customer opens an account, they feel seen, understood and appreciated.

A low level of customer insight maturity means the bank is still hung up on product-based campaigns that treat customers as part of a segment. These campaigns focus on what the company provides, rather than what the individual customer wants and needs.

The way to achieve high customer insight maturity is through data, analytics and the personalization of experiences, all of which are achievable through digital transformation.

Customers will trade information for value, but not in the absence of trust

There are two primary factors involved in encouraging customers to share information with their bank.

  1. Consumers expect companies to personalize offers and experiences and are willing to share information with their bank if they believe they are getting value in return. But banks are no longer being compared to their peers alone. Consumers are comparing the value and experience they receive to the likes of Amazon, Netflix, Apple Pay and Uber, as well as every other engagement they have been involved in.
  2. The other factor is trust. Building a trust relationship is directly tied to the ability to personalize the experience through information, offers and advice that is highly relevant to the individual’s circumstances.

Consumer trust in the ability of banks to look after their financial well-being dropped from 43% in 2018 to 29% in 2020.

Trust in businesses to look after financial well-being has dropped

Omnichannel experience is harder to achieve but more important than ever

Another result of the pandemic is the escalation in adoption and usage of digital channels, such as mobile apps and online banking. Most would agree that this change in channel use will be permanent and continue to grow.

That’s not to say that physical branches will disappear, rather banks need to invest in all channels in order to offer engagement options and allow the customer to select those that they prefer.

To create a seamless, consistent experience across channels, banks need to have a view of the customer’s interaction across the organization. Without this, customers will still feel like they are dealing with different departments and get frustrated when having to repeat or re-explain information to different representatives.

One way to move towards a seamless omnichannel experience is to offer omnichannel communication based on the customer’s preference.

For more insights on digital transformation in banking, watch the on-demand webinar: How communication drives digital banking transformation and maximizes customer lifetime value. WATCH THE WEBINAR ON DEMAND

3. Expansion of digital products

As banking customer behavior shifts, banks must move with the times, or risk getting left behind. Many banks today are exploring the power and potential of open banking, which can allow them to offer more innovative products and services to their customers, as well as to better compete with fintech companies and other non-traditional financial service providers.

As you shift your banking business model to reach new segments or provide an enhanced array of services, communication becomes even more pivotal to your success. After all, if your customers don’t know which new services they qualify for, or how those services will help them meet their goals, then they are unlikely to explore them further. CCM technology can be leveraged here to provide personalized on-statement messaging that directs customers to the right products and services, as well as 1:1 personalized “explainer” videos to help them get started.

Adjusting your bank’s priorities to thrive in 2023

In an era of constant change, the key to successfully transforming your bank’s business model will be to stay attuned to the changing needs and preferences of customers, and to be open to exploring new opportunities and technologies that can help your FI stay competitive and relevant. But these new opportunities are doomed to fail if you do not clearly communicate their benefits and make it simple for customers to access them.

That is why transforming your customer communication strategy is the best first step to broader digital transformation. By updating your approach to communications to meet omnichannel customer needs, you also position your bank to communicate the benefits of changes in your broader organization, like new or enhanced products and services. The pace of change in banking has never been brisker – but with the right strategic approach to these changes, the future is bright.

Investing in a modern customer communication management and engagement platform is an essential part modernizing your banking strategy, as it can provide the personalized digital experiences that will keep your bank or credit union ahead of the competition. It helps provide a great customer experience, and builds rich relationships, which in turn results in customers for life and a competitive advantage in the rapidly evolving financial marketplace.

How Doxim can address the banking customer communications trends identified and help future-proof your digital banking strategy

banking customer communications trends

Doxim’s experienced consultants and omnichannel platform can help transform your customer experience in many ways, including:

  • Gathering and utilizing customer data to continually improve the personalization of communications.
  • Building trust with customers via communication (via print, PDF, HTML, email, text, and online interactive experiences).
  • Leveraging interactive video to drive personalized digital customer experiences, such as interactive statements, bills, or reports, that offer visual engagement and real-time interactivity
  • Putting customer data, including customer statements, at the fingertips of your service representatives for immediate and personal service.
  • Making a meaningful connection with value-added content, like information about philanthropic activities, on customer statements.

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