The demanding digital-first customer has greater expectations and wants better experiences. Time-poor and choice-rich, they seek value, personalisation and convenience. Meanwhile, agile, digital-led players continue to create opportunities and challenges for more established financial institutions and increased regulation is reshaping the finance sector, altering banking behaviour worldwide.
Here are some guiding principles for being able to exceed customer expectations and deliver an outstanding experience in an ever-changing industry.
- Build trust
- Personalise the experience
- Understand what makes customers loyal
- Drive differentiation
- Be brave
1. Build trust
Your customers want to know that their finances and sensitive information are in safe hands. Against the backdrop of several high-profile cyber-attacks within the last few years, customers want reassurance from their banks. Companies must be transparent in how they manage and use customer data in dealing with these perceived threats and also invest in robust security as trust is the most powerful currency in today’s volatile environment.
So, whilst traditional financial institutions have so far managed to keep things at bay, they can’t afford to be complacent. In today’s competitive banking landscape, trust has quickly become a critical factor in in differentiating and delivering a positive customer experience.
2. Personalise the experience
In the Open Banking era, collaboration with authorised third-parties will allow banks to deliver highly personalised, relevant and contextualised experiences to their customers. Consumers will feel truly understood and valued, inevitably driving a heightened level of engagement.
If banks can truly harness the powerful transactional data to better target customers and deliver an improved, personalised experience, this will give customers more choice and control than before – and many believe it will ratchet up customers’ expectations of their banking experience.
Despite their initial reluctance towards open APIs, banks are starting to understand their potential, with almost 70% implementing API gateways to accelerate digital banking innovation. 41% see an API gateway an enabler of the developer ecosystem, while almost 3% as a chance to open up to third parties. One size no longer fits all. Banks must use smart technologies to personalise offerings and distribution channels.*
3. Understand what makes customers loyal
With the increased noise of competition and sheer volume of choice it is hardly surprising that customers can suffer from information overload and engagement-apathy can be the result of this saturation. The more engaged your customer set the more likely they will be to reach out, react and become truly loyal brand advocates.
A commissioned study conducted by Forrester Consulting on behalf of Collinson revealed that the majority of the Financial Services companies surveyed (66%) did not understand what is driving customer loyalty, putting customer relationships and profitability at risk. These organisations are taking a disjointed approach to loyalty, with over half (53%) failing to collect sufficient data to gain a deeper understanding of who their customers are.
The research also found a disconnection between business objectives and loyalty objectives, and that they are not measuring the right information to determine if their loyalty strategy is working. In this category however the Financial Services companies responded more positively than the other sectors surveyed. It is clear that the primary focus and objective for loyalty strategy in Financial Services is acquisition with over half indicating this was the intention (57%). More than half however (55%) do not have a loyalty strategy with clearly defined business objectives and goals.
Companies need to put loyalty back on track by becoming better aligned in terms of their objectives, what they measure and what success looks like.
4. Drive differentiation
Added value benefits have long been a proven strategy to drive the core objectives of customer acquisition and retention. Being able to differentiate and augment your product offering is increasingly important, especially if it is an enhancement with high perceived value.
Exceeding customer expectations goes hand in hand with providing shrewder experiences which can resonate powerfully with your customers when meeting a specific or focused need. Airport lounge memberships have long been successfully used as an inclusive benefit of a current account or credit card, offered to higher value and more profitable customers. As the operator of Priority Pass, Collinson has been able to support its clients in offering its customers a more positive experience in the airport environment. Increasingly, lounge access can also be offered as an instant benefit in the event of a flight delay, and in this way, it becomes an appealing and differentiated solution for the mass market.
5. Be brave
For incumbent institutions, bravery is about differentiating yourself from competitors by adopting the trends that are being introduced by the challenger banks and mammoth technology players.
With the dawn of GDPR, it is no surprise that some traditional banks are nervous to capitalise on the customer data that they hold. However, challenger banks such as Monzo openly show a consumer their spending habits and this has merely cemented its popularity.
If banks are able to better understand their customers, they will be able to provide a better experience, which will inevitably lead to a heightened level of engagement. And engagement comes full circle, right back to loyalty, and even advocacy.
So, it’s not about stepping outside the industry benchmark, but instead having the confidence to shift it. And to be the first one to do so.
Final thoughts
At Collinson we believe that today customer experience is the ultimate battleground between competing brands.
The aftermath of these changes and the accepted new paradigm firmly puts the customer in control. The value of a customer’s brand perception, product relevance, cost to acquire new customers and process transparency has never been more important in maintaining customer relationships and profitability.
*Source: Backbase – Banking 2025 Whitepaper
