According to Forrester’s Consumer Survey, around 27% of brands improved customer experience (CX) quality in 2020, 13% higher than in 2019. When the survey was conducted, companies focused on identifying and removing problems, including internal processes. In 2020, however, everything changed, forcing businesses to reconsider their core competencies in customer engagement.
Customer engagement has a direct impact on overall customer experience. Financial institutions (FIs) that dedicate significant resources to the customer experience have higher rates of recommendation, greater market share, and are more likely to up-sell or cross-sell products and services to customers. As a result, banks, credit unions and financial institutions have been incentivised to take a closer look at their engagement rates.
Mckinsey reports that CX practices that include a strong focus on engagement practices and digital transformation techniques can increase customer satisfaction by 30% and revenue by 50% making a connection between digital transformation and CX inseparable.
What is the connection between digital transformation and customer engagement?
Innovation in technology and the improvement of customer experience are crucial elements that enable companies to grow and succeed. For every digital organization in the industry, optimization of end-to-end customer experience has become increasingly important. Customer expectations and needs are changing due to the digital transformation in CX provided by leading companies.
The implementation of digital transformation for customer experience is not the responsibility of customer service, nor does it stop at the front desk. The process extends across all touchpoints of the business process, as well as the back end. Each department within an organization must be committed to optimizing and delivering seamless digital experiences to their customers.
Digital transformation offers financial institutions the opportunity to engage modern buyers and meet their expectations regarding seamless customer experience no matter the channel. According to Gartner’s research, 81% of companies compete mostly or exclusively based on CX, making customer experience a key differentiating factor for FIs from 2020.
5 ways financial institutions can benefit from implementing digital customer engagement strategies
An important aspect of digital customer experience management is being aware of the digital touchpoints you share with your customers across multiple channels and continually improving the experience your customers receive within and between those touch points. Listed below are some benefits digitizing the customer experience provides both the financial institution and customers.
1. Proactive engagement for improved financial management
Advanced digitization provides financial institutions access to a level of insight into their customers that was previously unattainable. Today, FIs are able to monitor their customers’ financial health and offer them proactive financial advice on ways to increase their wealth. Proactive engagement can take place in a variety of ways - in person or via a smartphone - depending on the preferences of each customer. FIs can provide effective insights to their customers instead of sticking to ineffective generalized offers, while helping customers take advantage of opportunities faster than ever before and minimizing their risks. Furthermore;
- banks can benefit from proper education by providing customers with better information about products and services so that they can make better financial decisions.
- they can notify customers regarding billing, application status, transaction updates or other announcements.
- financial institutions can proactively collect customer feedback in order to identify existing gaps between the institution and customers
2. Automated onboarding
A good customer experience is determined by a good first impression, and for most banking customers, that first impression occurs during the onboarding process. Usually, new customer onboarding entails filling out and signing papers, placing additional burden on onboarding teams and testing the patience of customers. Rather than taking a manual approach on the onboarding process, FIs can make it easy for their customers to provide crucial information from the comfort of their own homes via text while reducing lead response time. From there, they can leverage automation to quicken certain steps in the process, allowing customers to open accounts more quickly and enhancing their experience.
Personalization has been a top CX trend for years and now FI customers are demanding it too. According to Boston Consulting Group research, banks can also benefit from personalization at scale - if done right, it can increase revenue by 10%. There are expectations for banks to offer personalized engagement with their customers and we are beginning to see fin-techs explore the next level of personalization: hyper-personalization. Contrary to standard personalization, which uses data analytics to deliver targeted marketing and sales messages to customer segments, hyper-personalization focuses on each individual. In doing so, banks can monitor individual customers’ real-time data, AI and insights to achieve predictive analytics. With this information, FIs can increase revenue by developing more targeted, one-to-one marketing campaigns and offers.
4. Speed and accessibility
Customers will no longer base their perceptions on experience solely on price and product. Instead, expectations are driven by digital speed and accessibility. A company’s bottom line could be adversely affected by something as mundane as users having difficulty accessing the information necessary to purchase, use and onboard products that are loading slowly on their website. The number of customers visiting physical stores is declining, meaning it's up to these companies to find ways to remain connected to customers wherever they are. Customers find it frustrating to call their bank’s customer service helpline in order to report a problem, only to have to filter through an automated service system, or be put on hold. Financial institutions face a challenging circumstance as the volume of calls go up and not enough representatives are available to attend to them. Digitizing CX is all about bridging the gap between a business and its customers with the use of technology to increase the ease of use and take care of each customer’s needs and concerns.
5. Offering seamless omnichannel engagement
When FIs get the omnichannel experience right, they can win over customers. The new generation of digital savvy customers prefer to interact with service providers through various channels at their discretion. Customers want to engage with businesses via live chat, chatbots and text messages, which is gaining a lot of popularity among modern buyers. Digitizing all touchpoints and channels of engagement with the ability to receive consistent, end-to-end support is necessary to keep customers happy and engaged. Furthermore, implementing a digital transformation with a seamless omnichannel strategy will not only enhance customer experience, engagement but also improve customer retention and in turn, the bottom line. Specifically for FIs, one of the omnichannel best practices involves reducing lead response times, implementing live chat softwares compatible with multiple devices and tracking interactions across various platforms to understand customer behavior.
As financial institutions look for new ways to differentiate themselves in this digital age, those that can provide an excellent customer experience will be those that succeed. Your customers are your most valuable asset as well as your greatest advocates. Financial institutions can cultivate customer engagement by creating digitized and personalized interactions at every touchpoint to strengthen relationships and engage with customers in a deeper, more authentic way - turning customers into brand advocates.
Book a demo today to improve your financial institution’s customer engagement rate.