Covid-19’s Powerful Boost To Digital-first Financial Services
In this 2-part blog series, Olga Zakharenkava takes a look at how changing consumer behavior and rapid digital adoption are affecting the way financial services organizations such as banks and credit unions interact with their customers or members.
In part 1, Olga looks at how consumer behavior is changing, how the acceleration of digital adoption is affecting the way financial services companies interact with their customers and concludes with ways in which they can improve CX in the future without face-to-face interaction.
The shift to digital channels was already well underway prior to 2020. However, the restrictions and challenges brought on by COVID-19 accelerated the need for organizations to provide digital services. It also impacted the willingness of customers to migrate to digital, motivating a sharp increase in conversion rates and greater usage of digital channels.
Through this seismic shift, customer experience (CX) has remained the most important factor in retaining customers, highlighting further the need for consistent, personalized, and relevant communication.
- 80% of consumers are more likely to do business with a company that offers personalized experiences. Source: Epsilon (2018)
- 86% of buyers are willing to pay more for a great customer experience. Source: PWC (2020)
- 80% of consumers point to speed, convenience, knowledgeable help, and friendly service as the most important elements of a positive customer experience. Source: PWC (2018)
Usage of Financial Services Channels Shifted During COVID-19
It’s no surprise that COVID-19 changed the way people interact with their bank or credit union.
Branch capacity amongst US banks declined by 12% between December 2019 and July 2020 as branches experienced less in-person interactions and some had no option but to close.
Meanwhile, mobile and online banking activity increased, growing both the number of customers transacting on these channels and the frequency of usage. This is not a temporary change - if customers are comfortable using online/mobile banking channels, it’s unlikely that all customers who previously preferred visiting branches, will return to the branch.
The last time there was a global crisis, banks were widely perceived to be a big part of the problem. This time around, banks are central to the solution.
By taking a digital-first approach, financial services providers are well-positioned to help customers adapt
Financial services providers such as banks and credit unions are well-positioned to help customers adapt to a digital branchless reality.
First, by optimizing online/mobile channels, customers can still manage their personal finances without visiting a branch. Also, financial services providers can leverage digital channels and tools to address their customers’ specific financial needs (which is critical at this very stressful time,) through regular and relevant, hyper-personalized communications.
How financial services can improve CX in the post-COVID-19, contactless landscape
Even before COVID-19, customers wanted omnichannel, consistent, relevant, and personalized experiences. These needs have been heightened by the impact of COVID restrictions on face-to-face interactions and branch services.
The 2020 pandemic has increased customer sensitivity and caused a shift from the “attention economy to the trust economy,” as trust has become one of the most important elements between a company and its customers.
There is also a marked change in the values that customers expect to see from their service providers, with an emphasis on kindness, community, and purpose. Customers want to feel a connection, outside of the service they receive.
For financial services, this is especially important, because customers entrust the organization with their most sensitive information and personal assets.
Put employees and customers at the center of digital transformation
Research shows that customer experience leaders have highly engaged employees, who are more likely to recommend the company’s products and services and display a higher level of accountability. It follows that organizations need to take care of their employees as a priority - the happier the employee, the better the customer experience.
A good employee experience (EX) is critical to a great customer experience (CX)
It’s understandable that employees are also stressed about their jobs, anxious about the wellbeing of their families and feeling uncertain about the future. The sudden migration to digital channels not only placed a strain on customers, but also impacted employees, who had to adapt to new channels, while supporting even more demanding customers through this change.
Taking care of employees is critical to successful change management. It’s important to tell employees why the change they are going through matters to customers and to our changing society overall, and to help them deal with the additional stress in a positive way. A focus on the health and wellbeing of employees, and a commitment to regular communication and learning opportunities, is essential.
Employees at the frontline are dealing with customers who are stressed about their finances, anxious about change and are in need of extra support to make the transition to digital.
To counter this, banks must educate employees and equip them with the skills and tools they need to help customers feel comfortable engaging on digital channels.
TIPS: Educating employees on digital migration is critical, as is providing the right tools and information to help them support customers in various ways:
- Assist customers to adopt digital faster through segment-specific campaigns
- Ease anxiety with an emphasis on the security and full privacy regulation compliance of digital channels
- Get the right message across using on-demand coaching sessions and bite-size video tutorials in clear, plain language
- Consider implementing user experience analytics and contextual help tools, such as Walkme or Pendo, among many others, to measure progress
Introduce frictionless experiences to help customers in distress
A 2019 study by McKinsey asked customers how frequently they engage digitally with their banks and more than 50% of US banking customers said infrequently or not at all. However, COVID-19 has forced customers to be in contact with their financial services providers and embrace digital channels - possibly under duress.
Banks and credit unions need to help customers deal with stress and anxiety, which are known to lead to short-sighted financial decisions. This is the time to provide exceptional value through financial support, such as cost savings, payment holidays or avoiding price increases.
In addition to offering exceptional value, banks and credit unions should focus on each customer or member journey and remove any interaction that causes friction. When people are anxious and uncertain, the last thing they need is to be frustrated by a complex communication and issue resolution process.
TIPS: Offer professional help to make financial decisions and ensure processes are simple and intuitive:
- Make it easier to apply for new financial products, especially given that ‘digital-only’ might be new to many customers
- Identify and communicate appropriate relief programs, such as pausing loan payments or loan restructuring
- Whenever possible, educate customers on available government relief programs
- Select best of breed technology solutions to enable frictionless digital self-service
Let us help your banking organization achieve a great CX through innovative, relevant & engaging digital customer communications
Vice President, CCM Product Management & Product Marketing at Doxim.
Olga focuses on delivering business value to Doxim’s clients through world-class SaaS CCM solutions. She has a strong background in CCM technology for the regulated industries, product management and project management.
Olga joined Doxim in 2017 as the head of Product Marketing, Demand Generation, and Communications, and prior to Doxim, held product, marketing and strategy leadership positions at companies of all sizes, from startups to Fortune 500, including Telmetrics, OpenText, and JVL.
Olga holds an MBA from the Paul Merage School of Business at the University of California, an Honors Master's degree in Finance, and an Honors Bachelor's degree in Economics and International Management. Olga is a regular contributor to industry media, covering topics in marketing, financial services, productivity, and work management.