There are several discussions on the importance of customer engagement in the banking sector and the role of digital experience to support the objective. With a growth in the competition, some financial institutions have changed their focus on the customer-experience transformation. The first question here arises is “Does the customer experience really show impact?”
In this article, we will brief, if the customer experience is important, building stones of the connection, and how sectors could improve on the CX.
In the first place, below is the annual report on a bank’s performance, which demonstrates an important focus such as operating in a low-interest rate, and economic metrics like ROE, expenses, or market share.
Surprisingly, there was no much focus on customer experience or engagement. As per the statistics, customer acquisition and growth remains a top priority, following by building long-term relationships with customers and generating near-term profitability
Now let’s have a deeper look at the positive sides of customer engagement
In simple terms, customer engagement is improving conversation and building trust. When done right, it has the potential to increase growth and revenue.
– As per the research conducted by Gallup, customers who are happily engaged make more purchases and switch less. Furthermore, it states happy customers share 23% of the revenue, profitability and relationship growth
– Positive and continuous customer engagement strengthens the investment, both emotionally and psychologically
– Now, banking sectors have become an essential commodity, better and positive experience remains as a key factor in customer retention. Regular engagement is essential for the banking sectors to be relevant and establish customer advocacy.
– Customers who do not feel special towards their present banks are at a major competitive vulnerability, so a strong engagement and strategies can address their issues.
Customer engagement taps deeply into basic human needs. Engagement in the banking sector is predicated as one of the effective methods, which can include animation and graphics, simple and easy-to-use interfaces, connection, training, and more.
Customers approach a bank and sign up for various reasons, some want support for education, own a home, run a business, raise a family, or optimize their money, or make some retirement plans. Hence, there is a huge need and support for uses to be done for banks in terms of understanding and engaging users.
Advanced analytics are evolving at a higher level in banking sectors, with an increasing success rate in making a risk-based decision. All the effort is to build a sophisticated and powerful capability to define the right support, value-adding offers, guidance, and celebrations. All these efforts need to be delivered to your clients at the right time in their journey that delights and help them feel connected, valued, and successful.
With the help of technology evolution, banks cans get good analytical reports, to prevent friction from the user experience, reducing customer pain points, and improving application times.
Digital engagement in banking sectors orientates the service and journey that is designed around motivating user behaviors that build a durable and strong financial partnership between the customer and the bank.
Only if you are able to identify the customer pain points you will be able to take action for better customer service and improvements. Relevant data helps companies to inspire employees and earn loyalty. Most companies want happy customers, but the main challenge is in understanding what are your customer’s pain points, how they are feeling, and developing accountability for the customer experience to derive actionable insights.
However, to get better results, customer engagement has to be combined with the following factors:
– Quantity of interactions: Digital and mobile transactions, sessions, and inquiry across channels
– Quality of interactions: Level of customer satisfaction, likes, and a number of complaints or feedbacks.
– Traditional indicators: Number of products owned, assets and value of the products
– Customer Success: How well your customers are satisfied
When the digital expansion is turning into an essential point of focus for most of the banks, a reconsideration of client outreach systems and marketing strategies are required. Changes in client engagement strategies are essential to recapture or retain growth.
For some banks and the financial institution, investment in defining more proper digital-first promoting systems are required. Client tolerance for technology and digital marketing has risen, however, personalization of advertising efforts has slacked.
To produce new income, banks should think about incentivization of well-known behavior as a tool.
Increasing the speed of the adoption of data analytics is an essential prerequisite for banks to offer important types of solutions and assistance to clients in a digital framework.
Established banks have broadly tried to improve the client experience and establish product offerings in the advanced channel. For instance, banks have tried to reduce user compliance pain points, enhance application times, and offer virtual cards. However, few have even started to assess how to advance their outreach strategies and marketing efforts in spite of the way in which customers in which clients collaborate with a financial institution is shifting.
An update is important for bank items themselves, as the manner in which banks structure products and market them is not seen as effective as one-size-fits-all is not a suitable approach. This ‘customized advice’ is effective beyond the long-term financial objectives.
Digital channels, especially mobile apps, offer clients a higher level of access to services related banking. Hence, a vital move to exploit this access appears to be prudent, and banks seeking digital extension opportunities should consider remapping their conventional engagement strategies. Such a change could recover growth from direct digital banks, which, while developing their shares of retail deposits from 14% to 28% somewhere in the range of 2014 and 2017.
These transformations have exhibited a constrained ability in setting up essential financial connections. This new data-driven, proactive approach to deal with customer outreach could help in increasing engagement and build loyalty. Customary marketing campaigns face a reduced level of returns, as more focused and customer-centric campaigns take place
Though customer engagement may not have a significant impact on growth and revenue, by implementing certain strategies, you can see a good level of growth, especially when the world is moving towards a digital platform. When implementing the new strategy, you should remember certain points, prioritize customer experience, adopt a new way of measuring customer experience, and design user journeys.