To get a feel for why customer engagement is fast becoming the number one challenge for retail banks across the globe, it’s worth looking at some statistics over in the UK that also resonate with banks in most other developed nations.
According to the Payments Council, the number of Britons switching bank accounts grew by 12 percent to 1.16 million in 2014. Conversely, a survey by the Customer Contact Association (CCA) found that just 3 percent of consumers felt truly engaged by their banks and that engagement played a huge role in their decision to switch.
Add into the mix that 18 percent of consumers in a 2014 Market Force study stated they had visited a bank’s physical branch within the past 90 days to speak with an advisor (with 57 percent completing at least one transaction), and what this tells us is that banking customers want to be engaged, but that they want engagements to happen across both on and offline channels.
This means tapping into Andy O’Dell’s four forms of customer engagement – contextual, convenience, emotional and social, but to do this there are a number of steps traditional retail banks will have to take in order to be in a position to be seen by customers as truly ‘engaged.’
Get executive buy-in
Firstly, research from Collinson Group has found that just 29 percent of financial sector executive boards currently place customer experience, the bedrock of improved engagement, as a top priority in their banks.
With this level dramatically improving a rung down the ladder (48 percent of senior managers state customer experience as a top priority), it is likely that the drive for improved customer engagement will hinge on senior management, and their ability to get executive level decision-makers on board with engagement programs.
Improve satisfaction
Of course, the result of executive buy-in is that banks will begin to see customer satisfaction as an leading metric for success, and restructure in order to make customer engagement an organization-wide objective.
CRM technology is vital for reaching the right customers at the right time.
Many retail banks have started to broadcast this as their goal, but statistics suggest it’s harder to achieve than simply declaring a change of philosophy. KPMG’s most recent study on the subject shows satisfaction levels are still low among banking customers, but many banks will need to remove silos in their hierarchy to free employees up to be able to focus on customer engagement. This means giving more attention to customer service in the front office, the KPMG report highlights, and a better use of engagement-driving technology in the back office.
Enhanced CRM tech
If you look at the enhancement of mobile banking, there’s no denying that banks are delivering sufficient customer-facing technology. But a byproduct of focusing on this technology will require a renewed focus on CRM. This is already happening in most retail banks, with reports of a 57% increase in CRM sales within the finance sector alone, across 2014.
However, it is newer technology within the CRM suite, such as social listening, Voice of the Customer (VoC) and sentiment analysis tools that will be vital to banks tying up the information flowing between their customer-facing technology, as well as their front and back offices, and using it to engage customers with the right communications at the right time.
Take a leaner approach
And if all else fails, retail banks may have to start new beta banks in order to become more engaged. This may seem like a sensationalized idea, but research from Adaptive Lab’s James Haycock and former Daily Telegraph technology editor, Shane Richmond says that in cases where some retail banks have too much legacy in their technology and hierarchy, this may be the best future option.
A cursory glance at the success of some of the UK’s new “challenger” banks such as Metro Bank and First Direct shows that, free from the shackles, retail banks are able to combine physical stores and smart technology (both customer-facing and in the back office) to deliver better customer engagement. And the current satisfaction ratings of the two above-mentioned banks only help aid this radical suggestion.
