It’s the busiest shopping season of the year, and companies are working hard to get you to spend your hard-earned money on the goodies they offer. Banks and others in the financial services industry are competing for your cash, too, even though they’ve got a slightly different goal. What do all of these competitors have in common, though? They’re banking on customer experience as the not-so-secret weapon in the battle for your business.
Financial services in modern times
The arena is massive, diverse, and touches our lives at every level. First in line are the banks (like Wells Fargo and Chase), responsible for processing checks, deposits, electronic payments, and transferring clients’ funds left, right, and center. National and regional banking brands connect closely with the credit/debit card organizations (e.g., American Express, Master Card, and Visa). The two categories combine to facilitate the rapid movement of monies between buyers and sellers, alongside lending money at higher interest rates than what they borrow it for.
Then there’s insurance and related services designed to offset the risk of damage to property, business assets, ships, airplanes, autos, our well-being, and lives. Their close cousins are the reinsurers (like Lloyds of London), who essentially take on the risk of the direct insurers. Also, consider the vital roles of intermediaries, agencies, and brokers (e.g., Fisher Investments, Charles Schwab) stepping in to sell policies and investments to customers and deal with all the protocols involved.
Other crucial participants are the trading platforms (e.g., TD Ameritrade, Trade Station) that digitally channel millions of dollars of transactions daily. The latter relies heavily on the patronage of asset managers that professionally assist clients to invest in bonds and equities, foreign exchange, and derivatives.
What is customer experience (CX) in financial services?
When you look at the above, it’s only the tip of a gigantic iceberg. However, putting that aside, customers’ needs have remained more or less the same over time. Indeed, it’s not the needs that have altered; it’s how we address them that has made dramatic strides in different directions. Before we get into that, let’s look closely at CX and how financial services impact it. It’s complicated and fascinating at the same time because it’s not easy to nail down customer experience in the middle of this volatile cauldron. To understand the evolving banking and financial services methods, we need to appreciate what customer experience genuinely means.
I suggest you look at the customer experience platform in financial services as consisting of a series of touchpoints from the time someone enters the process until they exit it. For example, suppose you want to raise a mortgage to buy a home. You may start by contacting your banker to discuss the matter. That could happen online or by visiting a branch, or both. After you understand a little more, browse “most popular mortgage brokers in (name a city)” online. You contact a few by email or enter a direct chat option on their sites. One or two are particularly attractive, engaging you with fast responses and transparency into how their mortgages work. They ask for more information, and so the process continues (also possibly including friends and family) until, hopefully, your final selection funds your home purchase. Before a deal concludes, there can be scores, even up to a hundred touchpoints online and offline.
As a business competing in the financial services industry, understanding CX and the customer journey (CJ) opens up a world of opportunities and explains failures. A touchpoint is robust if it keeps the customer moving forward to the next one positively. On the other hand, it takes only one defective touchpoint to veer the CJ off the rails. It can happen in the blink of an eye. For example, a rude or impatient support agent can single-handedly kill the sale.
Every customer experience platform in the industry reflects patterns; they reveal strategies that are working and those that are beginning to falter. This means that improving the customer experience in banking (and all the other subsections) depends on detailed and accurate touchpoint analysis (known as customer journey mapping). Customer experience software has been growing prolifically as Saas developers recognize that there are thousands of entities competing to enhance their customer experience in financial services.
In short, the arena is vast, embracing all the activities around balancing risk and return and converting cash into assets (like equities, property, and bonds) and vice versa. Next, we will touch on some mind-bending trends shaping the industry today.
What are the latest trends in the financial services business?
In modern times, “Fintech” has become a crucial part of the Customer Experience in Financial Services – capturing everyone’s attention. It has pushed the importance of customer experience in banking in 2021 to the forefront of the conversation. Essentially, fintech is a category that consistently threatens to disrupt traditional banking methods offering faster, safer, more secure solutions. In short, we’re talking here about a vast field of varied activities that’s evolving and looks nothing like the neatly laid-out industry it was fifty years ago.
Gone are the old days of customer experience in financial services.
Preceding the pandemic, digitization got its foot in the door of the financial services industry and moved things in a different direction. Then COVID-19 hit and accelerated the process, turning things upside down. Any similarity to how our parents viewed banking, insurance, mortgage funding, and investing is purely coincidental. Customers entering and involved in the industry have passed through a revolution of methods and strategies that made the customer experience unrecognizable versus only a few years back.
Institutions behind the services are locking into concepts of online communication, paperless records, and all the automation possible. Indeed, anyone who talks about “my banker” these days is either really rich or a little delusional. The idea of a personal advisor guiding you every step of the way to optimize your capital is fast becoming an extinct concept. Machine learning bots and AI apps are beginning to play a pivotal role in client communications. The trends genuinely revolve around five forces:
1. The digital era and the internet.
Online banking is no longer a novelty. Customers can transfer funds between their accounts and pay with auto checks at the push of a button. It’s easy to review statements going back years on your laptop. When COVID-19 galloped through the nation, banks closed many branches. People started using drive-thru telling and found it quicker, more convenient, and a lot more hygienic. PayPal was a revelation when it broke the credit card companies’ monopoly on transacting cash transfers without hassle. Since then, Venmo has made it as easy as falling off a log to send or receive money with a mobile number or email address. The old-fashioned checkbook is all but obsolete. In short, digital transformation changed the customer experience in financial services.
2. The conversation wouldn’t be complete without discussing cybersecurity.
Arguably the biggest threat to the digital takeover of banking processes are breakdowns in cybersecurity. Some customers say their biggest fear when logging into their accounts is seeing the balance hacked out of the system. As a result, financial institutions have doubled their efforts to develop customer experience software with sophisticated encryption. In addition, they constantly advise on password usage and awareness of all the latest hackers’ tricks to insert malware into the systems. It;s no under-statement to say the protection of customers’ ID details is a number one priority.
3. Putting borrowers in the driving seat.
Online mortgage broking is all the rage. All you have to do is click on a site like LendingTree.com to access the top online lenders, who end up competing for your business – a specialized marketplace for mortgages, home equity loans, auto loans, and personal loans. Pre-approvals and fund-readiness are the compelling drivers in real estate markets so customers can buy a home without reservation. Also, consolidating credit card debt balances into one lower-interest loan has become a standard, relatively seamless exercise. This navigation flexibility opens up all loan verticals within hours, even minutes.
4. Safer, faster lending processes with blockchain technology.
The many facilitators and committees checking and double-checking your mortgage application have become a clumsy and slowing process obstruction. One of the most significant advantages of deploying blockchain technology is that many middle facilitators are no longer necessary. Many banks are moving into this new realm to shorten the number of intermediaries, therefore significantly reducing the closing costs without compromising the loan solidity. Although not an industry norm yet, it’s rapidly moving toward the vision of making a secure, low-cost customer experience management platform a reality.
5. Trading platforms incorporate cutting-edge customer experience management software to keep customers ahead of the curve.
Consider training with a mainstream trading platform – like TD Ameritrade – and this is what you’ll see the company promises to provide:
- Fast access to everything a trader needs to control and navigate accounts with an easy-to-use customer experience management platform on your phone, tablet, or smart watch.
- A range of real-time quotes, alongside insightful integrated charts and indicators (like Relative Strength Indices and scores of other metrics) at market speed.
- Ability to establish price alerts and watch lists synced with multiple other partner platforms (if relevant).
Overall, to stick with this example, TD claims that their customer experience management software puts professionally powerful resources in the palm of the average trader’s hand.
SoGoSurvey is a leader in the financial services CX arena, providing clients with all the resources they need to engage customers in banking, loans, and asset trading. Its team can connect you to a range of surveys that will highlight all the primary touchpoints to make the CJ seamless and hassle-free. Their knowledge of the latest trend dynamics is unsurpassed. For example, when one steps into dealing with investments and savings, extra care is a watchword. SoGoSurvey understands every aspect of the customer experience in financial services, thus removing unnecessary stress while saving you time and money.
Ready to invest in your customer experience? Request a demo today!