The latest UK Customer Satisfaction Index unveiled that banks and financial services are seriously lagging behind other industries such as retail, tourism and leisure. The findings from the Institute of Customer Service, are a unique measure of not only the current state of customer satisfaction in the UK, but are an overview of the development of a number of different trends over time.
In recent years, cost pressures and a number of strict new legislations have forced banks and financial organisations to adjust their long-established business models. Alongside this, additional elements such as increasing costs and a reduction in overall footfall numbers in high street bank branches, has led to over 900 branch closures in 2017 alone.
This could leave vast swathes of the population, particularly the elderly, who are often less familiar with the latest technology or simply prefer a more familiar experience, cut off from banking services.
Despite banks continuing to embrace online and mobile banking applications, which are cheaper to run and suit the requirements of technology-savvy customers, a recent study found that most customers, including millennials, still prefer having a physical branch nearby, particularly for major transactions such as choosing and applying for a mortgage. Therefore the decision to close so many high street branches is having a detrimental effect on overall customer satisfaction.
Over the past decade, we have witnessed a growing numbers of digitally agile Fintech players entering the financial market. Alongside the recent launch of PSD2 initiative, which has made it a legal requirement for banks to share their customer's data. We will see banks being forced to drastically shift their business strategy as the challenge to retain their customer-base intensifies. In order to maintain customer satisfaction, banks will need to shift their focus away from product offerings and towards a more interconnected, simple, and personalised customer service.
Empowering banks in their struggle against competitors must involve an end-to-end reimagining of the traditional business model. To thrive in this environment, digital adoption & innovation are key, and the focus needs to be on new solutions for both back-end and customer facing services. It is essential that banks innovate their products and services, leveraging emerging technologies such as AI and machine learning. Even expanding their app offering can enable financial providers to bridge the gap between physical and digital.
Banks need to think beyond a 'one-size-fits-all' strategy to cater to customer's increasing demand. For customers based in remote areas, or in regions that have been dealt the blow of a recent branch closure, mobile-based technologies can be used to organise roaming advisors, who can then be connected to isolated customers. This will provide customers with the increased level of service they desire, and improve overall customer satisfaction.
In the digital age, customers demand more self-service options and any-time, anywhere service. Banks and financial institutions can attract and retain customers by providing a compelling multi-channel experience across a number of touch points. Expanding the service offering to include self-service options, chat-bots, and telephone banking will further improve customer satisfaction, by ensuring that clients who struggle with technology will still be able to access banking services. The industry can tap into innovations that, for example, recognise different customers' voices when they telephone bank, enabling the bank to predicting the purpose of their call and automatically forward them to the most relevant department, streamlining the customer experience and saving them time.
In this day and age the customer should be at the heart of every business decision. With the front-runners of the Customer Satisfaction Index leading the charge when it comes to putting the customer first, the findings of the survey highlight the need for in-person services, especially in an increasingly digital world. Financial institutions need to focus on further fostering trust and providing financial advice that complement their current digital offerings.
More importantly, it is essential to bear in mind that despite the recent findings, not all is lost for banks. Yorkshire Bank was in the top five best performing organisations, showing that there is a winning formula that banks can tap into to improve customer satisfaction. The increasing number of innovative technologies entering the market, means that now is the best possible time for financial institutions to reposition their focus towards their longer-term growth strategies.
Ultimately, financial service providers banks need to find a way to strike a balance between online services and the advantages of a high-street network. Just because banks are closing branches, doesn't mean that client satisfaction should be overlooked. By embracing the different channels available, it is possible to strike a harmonious balance.
Bhupender Singh is CEO of Intelenet® Global Services