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How customer experience can transform the future of financial services

The financial services industry is characterized by large-scale operations and strict regulations, often resulting in the commoditization of services driven by a one-size-fits-all-customers mindset. In the past, this has led to subpar customer experience as well as an inadvertent exclusion of certain groups and communities. 


Recently, we’re seeing changes on both fronts. For example, the adoption of the Unified Payments Interface (UPI) in India has accelerated the role of mobile in financial services. Focussed government initiatives such as Open Credit Enablement Network (OCEN) are democratizing digital lending for the SME sector. Financial services organizations are increasingly recognizing the importance of CX in customer engagement, retention and brand equity.


Yet most financial institutions struggle with leveraging the potential of CX, stuck between the conflicting goals of sustaining operations and innovation for the future. This leads to fragmented initiatives, competing priorities and the neglect of larger CX. To make matters worse, these organizations aren’t typically designed to overcome these kinds of challenges.


Through this blog, we have tried to analyze the belief-behavior gap across the organizations based on a HBR survey sponsored by Thoughtworks. Financial services execs believe that CX is the key differentiator — even above quality of products and services — but are unable to leverage its potential. We’ve further examined what the organizations can do to embark on their CX transformation journey with simpler and incremental steps.

Silos hinder holistic CX


40% of respondents identify organizational/team silos as their biggest challenge in leveraging CX in the survey. It’s common for customers to encounter breaks in service when moving between different touchpoints or departments. This happens as departments focus on their own objectives and metrics without considering the overall customer journey. 


Data silos further exacerbate the issue. Sharing and accessing comprehensive customer profiles across departments and channels is deemed too complex. Fragmented data limits organizational understanding of customer needs and preferences; this results in a reactive, standardized approach that addresses urgent needs but fails to deliver a holistic and proactive customer experience. 


Difficulty measuring the impact of CX deprioritized initiatives


The next big challenge is the difficulty of adequately measuring the impact of CX efforts. 30% of business leaders identify this as critical. Most organizations that responded to the survey said they tend to focus on only a few enterprise-level metrics linked to revenue, customer retention, NPS and customer satisfaction. Operational challenges like long customer journeys, especially in services such as lending, make it difficult to trace the CX impact across various touchpoints. Experience-focused organizations need to analyze the change in CX metrics to the key KPIs that matter most to them. So, as an example, measuring NPS is not enough; organizations need to analyze the reasons linked to its movement increase or decrease. 


Suboptimal digital technology creates CX friction


23% of respondents in the survey also say that their organizations lack the digital technology to deliver consistent CX. Legacy architecture limits seamless omnichannel experiences, creating friction while integrating with the larger ecosystem. Without the right data platforms and analytics engines, relationship managers struggle to offer personalized services at scale. Digital customers are increasingly looking for self-service options (AI-backed intelligent chat bots) and need relationship management intervention only for certain critical or exceptional scenarios. This means relationship managers and front line employees need the data-aided insights around the customers for a speedy and efficient resolution.


Accelerating the CX journey


Organizations can begin their CX transformation journey with less disruptive initiatives, such as performing a CX assessment of their current web and mobile interfaces, to identify ways to make interactions more intuitive and user-friendly, thus harvesting low-hanging fruit (while also continuing to monitor and track CX initiatives). Another incremental step can be simplifying the user onboarding process with easier document submission, verification and approval. This can further help reduce the overall turn around time for customers.


From our experience working with global financial institutions, we’ve identified fundamental principles that will help execute successful CX programs wherever you are in your journey.


Define the true north of your CX


Only 13% of financial services executives strongly agree that all departments share a common understanding of ‘their ideal CX,’ according to our Pulse Survey Report. Before you begin implementing CX initiatives, then, it’s vital that you develop a shared vision of the ideal customer experience. This must always be rooted in real-world insight. It’s also worth assigning accountability for CX goals and ensuring all levels of the organization are aware of its importance.


Focus on ‘moments of truth’


Moments of truth are critical touchpoints in the customer journey that significantly elevate the overall experience. This could be a customizable online banking dashboard to access all necessary information or an AI-driven interactive advisory for investments. Moments of truth might vary based on the customer persona, so developing a deeper understanding of different types of users is essential.


Prioritize a thin slice of the CX strategy and execute


Ideas and strategies have a shelf life — original insights and market conditions can quickly change. Therefore, prioritize small slices to test strategies quickly and capture value before the market changes. 


Map CX transformation to customer value


Identify CX goals and define success metrics that are linked  to customer value. We recommend key focus areas linked to retention, revenue and referral:


  • Retention - Improve digital engagement. Improved digital CX encourages customers to engage more frequently  (Digital Adoption Rate, App usage) and seamlessly with online platforms, improving convenience and revenue. Enhanced experiences also foster stickiness with the platform, reducing customer churn (Customer retention rate) and boosting repeat purchases


  • Referral - Enhance customer loyalty  Improved CX leads to increased customer advocacy (NPS) and referrals


  • Reduce Customer Complaints and Disputes - Better CX addresses customer issues promptly, reducing complaints and disputes. This improves customer satisfaction, loyalty, and lowers the risk of reputation damage. Certain key metrics like Customer effort score (CES), Complaint Resolution Time, Complaint Volume, Dispute Resolution Rate can help us gauge the impact of CX initiative and customer satisfaction


  • Revenue - Better CX drives stronger customer relationships. This can lead to increased cross-selling (Average revenue per customer) and upselling. This, in turn, raises the average revenue generated from each customer over their lifetime (CLTV)


Reimagine the convergence of physical and digital


Customers realize value as a function of convenience, trust and transparency. We advise integrating physical and digital touchpoints for a unified and personalized experience.


Believe in achievable and measurable CX


Approach the CX journey in manageable milestones powered by lean and iterative initiatives that can adapt to market changes quickly. Make small incremental changes to the customer experience and measure success regularly. 


Working with a CX partner


As technology becomes more and more critical to delivering an excellent customer experience, working with the right digital transformation partner is essential. A good CX partner can help discover, design and co-implement unique CX journeys for financial organizations in a measurable way. They will apply the lenses of product, design, technology and data together to ensure:


  • Employees and departments are prepped for seamless collaboration


  • Immersive and engaging experiences for customers


  • Seamless integration of essential building blocks like regulations and security


A robust CX strategy translates a bank’s vision for the future into specific and actionable processes, technology and data goals. It addresses customers' financial and emotional needs without compromising on the demands of scale, regulation and compliance. It builds a competitive advantage for the financial institution by empowering customers and employees alike.

Disclaimer: The statements and opinions expressed in this article are those of the author(s) and do not necessarily reflect the positions of Thoughtworks.

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