In the years following the 2008 crash, banks and financial services were the least trusted industry. This highlights the impact of financial crises on the industry’s reputation and credibility. In the 15 years since, trust moved back into neutral, only for it to be threatened again by a string of banking failures at Silicon Valley Bank (SVB), First Republic and Credit Suisse, and the subsequent acquiring of lenders by large banks. Although the crisis may appear to be in the rearview mirror, as interest rates continue to rise, other banks may well find they have made similar investment errors to SVB. While we continue teetering on unsteady grounds, with deliberations about the U.S. debt ceiling reaching a peak, banks and other financial institutions need to rethink how they engender trust among customers through the experiences they deliver. Now more than ever, with customer concern running high, the industry needs to take steps to make customer experience (CX) an integral part of both their crisis response and regular operations alike.
CX Should Be a Top Priority
Despite more than half of financial services industry executives believing customer experience is a “critical priority,” according to Qualtrics financial services industry research from March 2023, not all firms have seen improvement — or made the appropriate investments — when it comes to CX. Past financial crises and heightened regulation have established a culture of risk aversion and cost control. And yet, research shows that, during the last recession (2007-2009), organizations that invested in CX outperformed the market, in stark contrast with those that failed to do so. With all this in mind, it is imperative that financial institutions gather customer experience signals to maintain relationships, particularly in the aftermath of a crisis.
When financial institutions establish listening channels, they can gauge customer emotion and intent, understand what is and isn’t working for customers, and ideate what can be done to improve customer interactions and satisfaction. Critically, this should not be one-way traffic. By creating a bidirectional flow of information with customers in multiple channels — by closing the loop with them, for example, based on the signals they provide — and by setting up processes and workflows to drive improvements derived from customer feedback, organizations can alleviate customer concerns with speed and empathy. While poor CX was not the root cause of current market volatility, it can be a solution to addressing lingering fears and ensuring distrust does not foment.
Leaders in CX know that focusing on experience is the path to building trust and loyalty, particularly in highly regulated industries. GM Financial, the financial services arm of General Motors, has led the industry in loyalty for years now. It has taken focused effort to make improvements to the company’s CX program — opening up new communication channels, using technology to analyze both solicited and unsolicited feedback from customers across channels, and taking those insights to inform personalized actions at scale via digital channels and higher-touch human interactions too. The company’s response during the Covid-19 pandemic — using theme discovery and emotion recognition to equip its chatbot to handle the themes that mattered most to customers — illustrates the power of CX to make a difference in times of crisis.
Prioritizing customer experience in such times helps both mitigate the risk of customer attrition and fortify companies’ bottom line. In fact, 90% of financial services leaders strongly or somewhat agree that delivering a better experience leads to more market share, making CX not only important for customer relationships but also overall corporate success (Qualtrics financial services industry research).
Embedding CX in All Touchpoints
For a modern, well-rounded customer experience program, CX needs to be the focus across the entire customer journey rather than isolated touchpoints or interactions — from reading online reviews and onboarding, to interacting with customer support, ongoing account management and even separation. All of these moments in a customer’s journey — whether digital, via telephone or in-person — are opportunities for the organization to understand the overall journey better and deliver differentiated experiences that mitigate the risk of customers turning to the competition.
After a crisis, it is especially vital that organizations clearly and effectively communicate with their customers through their preferred channel of communication. In an environment of heightened scrutiny, and with the specter of new regulations following recent banking failures, the industry is in a time of transition. If and when new regulations are imposed, banks should seek feedback from customers to understand how changes may impact their behaviors. Customer feedback in the wake of new regulation can help institutions identify and understand gaps in the quality of the services delivered.
Although consumers increasingly want to access banking services through digital channels, human contact remains a vital part of providing a quality customer experience and building trust. The same Qualtrics research found that, despite the shift to digital banking in recent years, human engagement continues to be important to customers, with person-to-person interactions in branches, messaging channels and over the phone all impacting customer experience greatly. The firms that succeed will be those that manage to balance digital experiences with a human touch as needed, so that concerns that emerge can be understood quickly and met with compassion at scale.
CX Moving Forward
Customer experience is an indispensable tool when navigating volatility and alleviating customer concerns. Customer experience needs to be a priority for financial services, as not only is it a key factor in maintaining customer relationships when the economy thrives, it is also vital for managing customer expectations in times of crisis. As the industry navigates the fallout from recent banking failures and learns valuable lessons to help manage future crises, customer experience will be critical in not only recovering from current volatile conditions, but also in building and maintaining trust among customers for the future.