Financial services leaders are increasing their focus on digital-first initiatives to optimize the customer experience and increase retention and loyalty – a trend that emerged out of pandemic necessity and became a preference that is here to stay.
Verint, The Customer Engagement Company, has conducted independent research into the banking and financial services sector. The data provides insights into how financial services organizations are doing in their digital transformation and customer experience initiatives.
The Importance of a Digital-First Mindset
Leveraging digital-first engagement channels has a two-pronged benefit: enabling customers to self-serve at the same time it alleviates volumes for workers on the customer front lines. The rise of digital channels has financial services leaders asking a new set of questions: How do we use artificial intelligence (AI) and automation to deliver the right mix of self-service and human-enabled engagement to drive better customer experience?
Verint’s research on the Engagement Capacity Gap shows 62 percent of financial services leaders say digital-first engagement is their top priority. In addition, financial services firms face challenges that must be addressed including understanding and quickly acting on changing consumer behaviors (say 55%), obtaining a unified view of customer engagement from siloed interaction data (say 54%), building enduring customer relationships (say 53%), and managing the growing volume of customer interactions (says 51%).
In an environment where it’s even more expensive to acquire a new customer – while remaining extremely important to retain the ones you have – banks need to move quickly to understand and satisfy customer needs. This is likely why 66 percent say capturing voice of the customer (VoC) insights and using them to drive decisions for experience management is a high priority among their technology initiatives.
AI is the common thread that untangles the more cumbersome parts of customer engagement. That may be why 84 percent of business leaders say expanding AI and automation are top priorities this year to help improve customer interactions and enhance overall customer and employee experiences.
Optimizing Digital-First Customer Engagement
Verint’s most recent VXI for Banking report provides insight and guidance for banks as they put digital-first strategies in place. Digital channels are popular for consumers when engaging in straightforward tasks such as researching a product or service (57%), conducting a transaction (53%), and applying for a product or service (49%).
When a task is more complex, however, customers prefer a human-assisted interaction. When asked about the last time they needed to resolve an issue with their accounts, 54 percent of consumers first called the bank or visited a branch or drive-through.
Around half of those who had to resolve an issue with their account or online access said it was harder than anticipated. In fact, 29 percent of Millennials and 28 percent of Gen Z consumers spent more effort than expected to complete the primary reason for online banking.
Thirty percent of each of these generations said they would switch to a different financial institution if it required no effort on their part. Additionally, nearly two-thirds of Gen Z and Millennials who found it more difficult than expected to complete a task would make the switch.
Improving the Branch Experience for In-Person Service
Over the past few years, banks have rationalized their brick-and-mortar operations amidst shutdowns and as digital banking has grown during the pandemic. The banking industry is challenged with a scenario where they need to make it easy for personal human interactions between their employees and their customers to occur, even while overall visits to branches are still low.
Banks are calling back furloughed staff, reallocating team members who were solely dedicated to digital channels and rethinking how to adequately staff bank branches to meet fluctuating needs for in-person service.
Verint’s research highlights the need for banks to improve the in-branch experience as a crucial way to improve customer experience and satisfaction. Nearly 40 percent of consumers who visited branches reported they were left waiting longer than expected.
Banks should consider the addition of digital technology to improve the in-branch experience. Digital channels can be used by customers to make appointments through online forms or automated messaging flows. Customers can receive reminder alerts and information concerning the appointment, while branches can prepare for the volume and timing of appointments and allocate resources accordingly.
Supporting the Financial Well-being of Younger Customers
Supporting the financial well-being of younger consumers was also highlighted in our research as a vital customer experience and satisfaction factor.
In last year’s VXI for Banking report, Gen Z and Millennial consumers led the way in adopting new additive banking services such as micropayment apps like Venmo and Zelle. This year’s research shows a continuation of the need to expand banking offerings to incorporate new financial tools and technologies to empower younger consumers with the means to better manage their finances. Gen Z and Millennial banking consumers say they need more help cutting costs, tracking subscriptions, creating budgets, and managing expenses.
With the pressures of global inflation rising, assistance with financial management is likely to have a bigger impact on younger generations than it might have in the past. With many younger consumers willing to switch banking providers, banks must offer products and services to help address the gap in Gen Z and Millennials’ financial knowledge to retain a loyal customer base for the long-term. This is critical, especially given the fact that over the next decade experts say Millennials and Gen Z stand to gain trillions of dollars from previous generations in the greatest wealth transfer the country has ever experienced.
Embracing and Evolving Omnichannel in Financial Services
Financial services organizations must recognize that customers expect to interact on the engagement channel of their choice, and that the number and kind of channels has exploded compared with previous concepts of omnichannel. From live chat to messaging apps, email to social media, customers expect an effortless experience regardless of channel.
To meet these increased expectations, a new approach is needed to meet customer expectations as interactions grow and enable financial institutions to engage in a truly omnichannel way. A unified digital engagement strategy that powers customer conversations, integrates bots and AI, and is supported by knowledge is critical to this approach.
Engagement orchestration is needed to intelligently unify all customer interactions – both voice and digital. Powering asynchronous, customer-centric experiences that go beyond channels to connect the customer journey, engagement orchestration helps brands anticipate needs and orchestrate both the workforce and experience for the right outcome across any channel.
About the Author
Jenni Palocsik is vice president, marketing insights, experience and enablement at Verint.