Traditionally, financial brands have competed based on product offerings, price, and customer service. But that’s no longer enough. Differentiation now depends on the customer experience, with early adopters of this business strategy already reaping the benefits.
According to a study by research firm Ovum, in partnership with Adobe (CMO.com’s parent company), financial companies that are more progressive “act in a much more coherent and collaborative manner and design their processes and experiences from the viewpoint of the customer. Every link in the value chain is connected, and departments collaborate to drive value to the customer.”
Also of note: These more advanced organizations report higher revenue, the study found.
Other factors are prompting financial brands to step up their game, too. Well-informed customers, competitive products and services, and even tech giants--such as Apple, Facebook, and Amazon, who are trying to win consumer time and attention--also are contributing to heightened competition, according to the study.
Below we take a look at three ways in which financial services companies are trying to separate themselves from the competition:
Financial institutions are making strides toward customer experience-led strategies, especially on mobile. Case in point: Banks including Citi and J.P. Morgan Chase have invested in taking self-service to the next level in their mobile apps. Consumers can now deposit checks remotely; activate new credit or ATM/debit cards; send, receive, and request money; make trades; manage investments—you name it.
“Everything that we do, all day long, is with a nod to experience first,” said Citi CMO Jennifer Breithaupt, in an interview with CMO.com late last year. “If it’s not going to help or enable our customers or give them an advantage, it’s something that we don’t want to do or focus on.”
A study done last year by Accenture found that consumers want more digital self-service features and functionality from their banks. Banks recognize that “the more features they add, the more [experiences] they could provide to their customer base,” said Rob Krugman, chief digital officer at fintech company Broadridge.
In addition to mobile enablement, financial brands continue to seek other ways to engage customers on a more personal level.
In a previous interview with CMO.com, New York Times bestselling author Dan Heath said that retail banking, specifically, has visibility into many different transitions that consumers go through in their lives: marriage, new jobs, new house, and other assets that require financing.
“These transitions are opportunities for peak moments,” Heath said.
T. Rowe Price, for example, which sells college and retirement savings plans, is committed to educating customers about these options of long-term financial planning. One way it has been doing so is through personalized videos, which motivate account holders to take action at select times, such as during an annual year-in summary review and when the child beneficiary’s birthday is approaching.
Capital One’s Second Look is another example of a brand looking out for its customers. The program monitors customer spending and helps detect anomalies, such as unexpected charges. For example, a customer might receive a notification on his phone alerting him to an unusual spending increase on his power bill, along with a graph via the app showing how much the bill has increased from the previous month.
“Our business is built on intangibles—on customer experience, and on the outstanding software, supported by high-grade analytics, that makes that experience great,” said Capital One CIO Rob Alexander, in a talk about the brand’s big data transformation.
Easy Does It
Finally, what’s an experience if it doesn’t make life easier for the customer? Zelle, Broadridge’s Krugman noted, is an interesting solution that, through a conglomerate of banks, has been able to create a seamless experience for peer-to-peer (P2P) payments.
“By integrating [Zelle’s] P2P capability across a number of different banks, consumers can transact in a space that they are already comfortable in,” he noted. “It’s the seamless experience that is now integrated in your financial services system that allows you to pay other resources very quickly and easily.”
Contactless payment is another way brands are simplifying the payment process. Alexander Petrov, chief technology officer at Paygine, an open blockchain financial platform, pointed to two examples: Visa payWave and Mastercard PayPass, neither of which require a PIN or signature from the customer for making purchases less than $100.
“This not only changed the customer experience in many cases, but opened totally new segments for card usage, [such as] transportation, and created an infrastructure for very new ways to pay [using] mobile wallets,” Krugman added.
How To Succeed
The customer experience bar seems at the highest when customers believe intrinsically that the brand not only knows who they are, but cares about them.
“Winning in this new reality requires customer experience to become the competitive differentiator,” said Jim Dicso, CEO of SundaySky.
He suggested four CX checkpoints by which financial services firms can gauge themselves:
- The experience should be helpful and valuable, delivering useful information to the customer to achieve his or her goals.
- The experience must be emotionally engaging, making the customer feel appreciated and valued.
- The experience has to be contextually relevant, proactively providing what the customer needs and wants at the time of an interaction.
- The experience should be motivating, influencing a behavior change with an inspiring call to action.
According to Broadridge’s Krugman, “Organizations should no longer be asking, ‘What do we want the customer to do?’” Instead, they should be looking at what the customer already is doing and then figure out how to tie that into an existing experience.
“It’s a lot easier to ask people to do things in an environment that they’re already comfortable with versus asking them to do something new and change their behavior,” he told CMO.com.