article |
Step Up Your CX

Financial Services CX: From transactional experiences to relationship-building

Here’s how financial institutions can maintain momentum on building better customer relationships. 

If 2021 was about accelerated customer experience, 2022 will be about maintaining that momentum and driving growth. Keen to fend off competitors, financial institutions from established banks to startup fintechs are prioritizing technology, talent, and innovation as they continue to shift from transactional experiences to building better customer relationships.

Financial institutions are also enjoying high levels of consumer trust. In July, Deposit Accounts surveyed more than 900 consumers with bank accounts to see where they’re putting their trust. The findings suggest that the pandemic positively impacted consumers’ loyalty to their financial institution. Overall, 71% say their financial institution did right by consumers during the pandemic, and 30% feel more loyal to their financial institution as a result. This is a prime opportunity for banks and other financial institutions to make the most of the consumer trust that they accrued over the past year and turn it into lasting loyalty. Here’s how.

Help consumers improve their financial health
In the wake of the COVID-19 pandemic and rising inflation, there’s a huge opportunity for banks, credit unions, and other financial institutions to win the loyalty of customers and drive engagement by helping them overcome financial challenges and improve their financial well-being. More than two in five consumers (44%) who described themselves as living paycheck-to-paycheck were “extremely” interested in becoming more financially literate, according to a survey from and Unifund.

Some banks have already caught on. In a survey of the best banks that help customers with their financial well-being, Capital One, USAA, and Chime were tied with 48% of their customers saying the banks help them improve their financial health and performance, according to Forbes.

“Everybody's talking about customer experience and being customer-centric [yet] when you look at what kind of experiences banks are delivering it’s very much focused on transactions and financial products,” says Aurélie L’Hostis, a senior analyst in Forrester’s financial services practice. “If banks want to serve customers better…it’s about genuinely focusing on the financial well-being of their customers and creating emotionally engaging experiences.”

Helping customers improve their financial well-being means more than providing them with calculators and tools for large “life event” decisions, such as buying a house, getting married, or saving for retirement, pointed out EY in a report. “Ultimately, it is beyond being able to make and afford the macro-decisions for the macro-moments, it’s about…thinking of finance as a utility – a service that is continually available to support our overall well-being, whereby we have enough confidence in our ability to spend, save and invest so that we can fully engage with our day-to-day lives, jobs, and society at large.”

Capital One, for example, offers educational content on how to make a budget and other topics; automated alerts that warn consumers about suspicious charges, and a credit monitoring tool with tips on how to improve a credit score.

For financial institutions, helping consumers better manage their finances and achieve financial stability could open up new revenue streams while having a positive impact on people’s lives—a win-win situation. The winners will find innovative ways to delivering value, such as through partnerships, providing access to additional financial tools and more.  

Remove friction from the customer experience
By 2030, 80% of heritage financial services firms will go out of business, become commoditized or exist only formally but not competing effectively, according to Gartner. The best way to differentiate services is through frictionless omnichannel experiences. “Customers want and expect a streamlined service and ease of use across any channel they prefer to reach you,” says John Li, co-founder and CTO of lending company Fig Loans. “We want a smooth, systematic approach to protect and strengthen our branding and a more cohesive consumer experience.”

Organizational silos are one of the “biggest obstacles in the way of omnichannel,” Li notes. To overcome that challenge, his company is “creating teams of cross-organizational employees to ensure that the right messages are conveyed to every department, so we can remove the obstacles in the way of truly seamless collaboration.”

In an always-on world, automation and artificial intelligence are also essential in enabling companies to scale resources and provide a human touch while reducing costs through increased efficiency.

For Nate Tsang, founder and CEO of the investment research platform WallStreetZen, one of his goals is to “improve the automated experience.” As the company grows, it’s critical that the company’s customer support keeps up with that growth. “Our CX channels [e.g., email, social] have to accommodate [customer] needs so we keep strong engagement,” Tsang says.

To scale resources, Tsang is looking into business process automation (BPA) to expand on the robotic process automation (RPA) tools that his company already uses. “RPA has been useful so far for automating workflows for individual employees. BPA is about connecting those workflows across the entire CX timeline,” Tsang notes.

Automation can also help ensure that customers receive the right type of service to match their needs, Tsang adds. “Customers who have specific product questions and complaints often prefer having a human on the other end. Customers and prospects who need general guidance get speed and efficiency, leaving us more time to handle the callers. By achieving that, we improve outcomes for both audiences.”

Ultimately, the ideal experience that customers have with his company should be, “invisible,” Tsang continues. “Creating an amazing automation is all well and good, but if it doesn't deliver time-savings or convenience to the customer, then it's just for show.”

Reflect consumer values
As consumers become more mindful of how the companies they do business with impact society and the environment, attention is turning to financial institutions. Nearly three quarters (72%) of consumers say they feel it is more important than ever that the companies they buy from reflect their values, according to a recent study.

Another study found that the types of social responsibility consumers look for most in a bank are assistance with financial hardships and giving back to the community. Indeed, “everyone wants to follow a business with a cause,” notes Cliff Auerswald, president of All Reverse Mortgage. For its cause, the reverse mortgage lending firm, which is run by veterans, has prioritized “reaching out to veterans [to] help them live financially secure,” Auerswald says. The company plans to increase its customer outreach to veterans through more word-of-mouth referrals and a greater marketing push, in addition to hiring more veterans (currently 80% of the employees are veterans).

The environmental, social, governance (ESG) movement in the financial industry is also having a moment. From January through May, more than 600 news releases from S&P 500 companies mentioned ESG principles—more than double the rate of the same period last year, reported the Wall Street Journal.

“When companies align their purpose with doing good, they can build deeper connections with their stakeholders and, in turn, amplify the company’s relevance in their stakeholders’ lives,” according to Deloitte Insights. However, consumers are more marketing savvy than ever and will quickly call out inauthentic attempts to support a cause or reflect consumer values.

For financial institutions, the way forward is understanding the core values that define their customer base and living up to those values. Those who make it a priority can expect increased growth, engagement, and retention. 

Aligning with customers is the future
Most financial institutions are not known for an innovative, digital-first customer experience. However, the pandemic and resulting lockdowns forced customers to rely on financial institutions’ digital services for a wider range of transactions and exposed them to new touchpoints. Banks and other financial services firms are in a prime position to maintain that momentum and deepen customer trust by understanding their customers’ needs and delivering on those expectations.