Financial Services and Insurance

Investing in CX: Banking’s secret weapon

Lidia Tavares Dias

By Lídia Dias

0 min read

Two women and a man discuss banking investment in CX in american banker's podcast

Financial institutions can make CX investment their secret weapon by leveraging partnerships that give them agility and speed.

In a recent survey that asked bank executives to list their priorities for 2022, they stated as the top priority to improve customers’ digital experience. In fact, almost twice as many executives consider customer experience (CX) to be more important than the second priority: enhancing data analytics capabilities. CX is definitely top of mind for bankers. But it can be very challenging to understand exactly what good CX looks like and to decide when and how to invest in CX initiatives.

Rahul Kumar, Director of Financial Services Strategy at Talkdesk, and Michelle Beyo, CEO & founder at FINAVATOR, spoke with Lisa Joyce, contributing editor and host moderator at Arizent, about:

Two women and a man discuss banking investment in CX in american banker's podcast


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Investing in CX: Banking’s secret weapon

I. The larger trends are impacting how customers interact with businesses.

Lisa Joyce: 

I’d like to begin our discussion by talking about some of the larger trends that are impacting how customers want to interact with businesses. Are customer expectations changing, and how? Do you see these trends continuing or accelerating?

Rahul Kumar: 

This is a great question to start the conversation. The fundamental piece is that customers expect convenience. They expect personalized and contextual interactions with any business they interact with. Talking about banks, this is even more important: customers expect their banks to know who they are, to understand their needs, and to deliver a frictionless banking experience.

Trends are continuing to evolve, customers expect quick and fast resolution to their needs, and this does not truly only mean they’re expecting a digital experience or self-service—those are important but what customers require from their banks can vary. If their service need is simple, yes, they want it to be delivered in a digital channel. But if it’s complex, they expect their banks to deliver a white-glove experience where they get the attention and advice they need. Customers expect more and more from their banks and credit unions.

Michelle Beyo:

Customers are looking for their banks to deliver a seamless experience. The changes in the market accelerated, the pandemic forced everybody to go online. It’s not ok to not have a seamless, safe, and secure front-end experience for customers. They want their bank experiences to be very similar to the Fintech or Amazon experience, and this is pushing banks and their legacy infrastructure to keep up to deliver experiences that are simple yet extremely secure.

II. The impact of changing customer expectations on financial institutions.

Lisa Joyce:

Those are some great points. Can we talk a little bit more about the need for this seamless experience? What’s the impact on financial institutions? What do they need to do, and where do they need to invest in CX?

Michelle Beyo:

Banks need to look at how they can partner with organizations to ensure they’re offering a seamless, digital product and a front-end experience that allows them to identify themselves, knowing they’re secure and safe.

"Leveraging partners that are committed to bringing innovation and driving agility is where banks need to start focusing on. Partners will help banks to achieve the agility they need."

Rahul Kumar, Director of Financial Services Strategy at Talkdesk

III. How can financial institutions keep up with changing customer expectations?

Lisa Joyce:

I’m assuming that great CX requires constant improvements. What was once a great experience two years ago is no longer considered great today. How do financial institutions keep up with changing customer expectations?

Rahul Kumar:

I agree with Michelle in that the pandemic was a wake-up call to banks and credit unions, in particular. They need to act now, or they risk becoming completely irrelevant. One of the biggest things that I think banks and credit unions need to look at is frankly listening to their customers, being willing to pivot quickly as the demands are changing.

We have been advocating for banks and credit unions to take a partner approach. Traditionally, banks have been burdened by legacy, taking the time to build things out—that model doesn’t work anymore. Leveraging partners that are committed to bringing innovation and to drive agility is where banks need to start focusing on. Partners can move fast, they have this mindset of doing things better and differently, and that will help banks to achieve the agility they need to meet constantly evolving customer expectations.

IV. How does organizational culture impact financial institutions’ ability to support CX initiatives?

Lisa Joyce:

What organizational changes need to happen at financial services institutions so they can move forward and support these CX initiatives? What are some best practices for getting the most out of CX?

Michelle Beyo: 

Anyone who has worked with banks as a third party understands that sometimes it can take 12 months to sign a non-disclosure agreement—it’s just organizations wanting to be cautious in their traditional banking perspective. But those that are succeeding and improving not only their product suite but also their CX are those who are able to find a way to move quicker. We’re seeing some banks trying to move up the onboarding of partners—that’s an interesting way to facilitate faster partnerships and not be lagged behind.

V. The need to rethink ways of measuring CX ROI.

Lisa Joyce: 

The traditional ways of measuring return on investment of CX maybe are no longer appropriate. Are there any new metrics that banks and credit unions should consider going forward as they measure ROI?

Rahul Kumar:

Investment in CX and innovation needs to be measured differently. Traditionally, banks and credit unions have built their business case around a CX transformation that can showcase guaranteed ROI and use traditional metrics that focus more on operational and efficiency gains. Typically, the contact center is always looked at as a cost center. Changing that is important. Making the contact center move towards growth and profitability rather than just efficiency—that’s what banks and credit unions need to think about.

With innovation, it needs to be a sense of being unafraid to fail, to continue testing and optimizing. The metrics have to reflect accordingly, making those metrics a little more customer-centric—bringing in metrics that can measure share of wallet, metrics that allow you to measure how you’re monetizing the opportunities around customer interactions. The metrics need to move and focus towards profitability and growth versus just operational and efficiency gains—this will be key.

VI. What trends or technologies should financial institutions be following?

Lisa Joyce: 

What’s next? What other trends or technologies should financial institutions be looking at if they want their CX to evolve and keep up with customer expectations?

Rahul Kumar:

Emerging technologies, cloud and AI, emerging partner ecosystems, crypto becoming more and more mainstream for banks and credit unions, and the pivot away from the traditional branch-based banking model: those trends are all going to lead to the creation of new distribution models in banking. Although these trends are opportunities, they also will continue to create new CX challenges for banks that they will need to overcome. Continuing investing in innovation and finding new partners that can help them future-proof these growth opportunities will be fundamental for banks and credit unions.

3 Transformative Banking Trends


report

3 Transformative Banking trends and what they’ll mean for customer experience in 2022

Before you go.

In a crowded and increasingly connected financial ecosystem, banks and financial institutions must adapt swiftly to rising CX megatrends to satisfy changing customer expectations. One of the biggest shifts is that customers will increasingly receive financial services that are embedded in their day-to-day lives. These emerging trends make bank contact centers a strategic asset for delivering a great client experience.

Read 3 Transformative Banking Trends and What They’ll Mean For Customer Experience in 2022 to gain insight about embedded finance, buy now, pay later loans, the evolution of bank branches, and other transformative themes in customer experience.

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Lidia Tavares Dias

Lídia Dias

Lídia is a marketing content writer that has been writing about banking and technology for the last few years. She believes in better, human-like digital experiences. When not writing, she’s probably cooking for her kids or reading crime books and thrillers.