FinTech Reviews and Interviews

Why is it so hard for Financial Service Companies to Communicate with Consumers?

Most financial institutions share the same problem – poor customer communications. This is a common criticism from customers and industry analysts alike.  Phrases like “financial services lowest in customer satisfaction” are regularly thrown around, and numerous surveys and studies confirm that customers feel confused. This can lead to the conclusion that their bank, for example, simply does not care about them. Many complain, but don’t understand exactly why something so seemingly basic like giving them information gets mishandled.

On the other hand, communicating and servicing clients with a variety of needs is not an easy task. Financial institutions can improve and unite these channels by identifying the main reasons why their customer communications fail.

Common Pitfalls for Financial Institutions

Automated vs. In Person

Consumers are not confident in fully automated branches when it comes to significant financial decisions. Though it may seem surprising, a TimeTrade’s survey  found that younger people prefer “face-to-face” interaction when making big choices. Millennials are now buying their first homes, or taking out loans, and want in-person assistance for these major purchasing decisions. Digital or remote support can help, but losing too much of the human touch can be detrimental. Financial institutions should be looking toward digital transformation, but also keep in mind there is a “last mile” need for human customer service.

Mobility

Many financial institutions still struggle to balance their mobility channels. The annual Eptica Multichannel Customer Experience Study evaluated several UK financial brands’ ability to answer ten routine customer questions through their websites. They also evaluated the speed and accuracy of email responses to customer inquiries from online channels. It found that with web-based communication, banks performed the best and most could answer at least 7 of the 10 routine questions. They fell behind in areas like Twitter, online chat, and most notably, email. Email was by far the worst performer of all the communication platforms. Only two banks offered email services to non-customers, and of those two, only one responded – 17 hours later.

Outside of major purchasing decisions, younger generations want to interact digitally whenever and wherever.  It is imperative to get mobile right, structurally and strategically. PWC’s retail banking study found that 49.4% of all customer interactions are online, and 40% of US consumers will move to another provider if a bank’s site is not optimized for mobile devices. Since it is generally easier and more profitable to retain clients rather than sign new ones, it is vital to maintain your core base, and easy mobile access can help.

Accessibility, lack of confidence and trust

Customers want banking to be transparent and simple, and there is a clear disconnect in what executives think is happening and reality.  In another TimeTrade survey of C-level executives, 3 out of 4 believe that it is easy to interact with their institution, 22% feel that it is easier in some channels but not in others, and a mere 3% say that it isn’t easy interacting with their institution. Banking comprises some of the most complicated, bureaucratic processes that consumers will ever have to deal with, such as loan applications and submissions. In many cases, it isn’t possible to become a member without physically going to the branch.

The internet also results in less loyalty. With seemingly endless choices right at their fingertips, customers don’t feel tied to their banks. Frost & Sullivan found that nearly half of financial service sector customers (47.4 %) are not strongly loyal to their banks: 26.8% consider themselves somewhat so, while 20.6% are neutral or not loyal. Unsurprisingly, Frost & Sullivan also found that only 20.1% of customers say they are very confident their bank understands them. This can diminish the loyalty a person feels to their bank and may lead to evaluating new options or opening accounts with competitors.

Solutions

Balance automation with human touch

While digital is extremely important, there is no replacement for an expert when a client is having a crisis. PWC found that 60% of great experiences are dependent on great staff.

Electronic channels are ideal for certain types of interactions – such as making day-to-day recommendations like basic fund transfers or billing alerts. However, when consumers have questions or are confused about aspects of services, it’s important to be able to talk to someone and get an answer, not go through an endless phone tree or be rerouted back to a website.

Improve digital capabilities

The more technology a firm utilizes, the more convenient access they give their consumers. While research previously mentioned shows that customers want to interact with people for significant decisions, when it comes to the everyday activities, convenience is what consumers want with any industry they deal with. Financial services are no different, and need to meet them where they are. In 2017, consumers compare every company’s customer service to the leaders like Google and Amazon, not just other financial companies. Having an app, social media outreach, and a highly functioning website are quickly becoming more crucial than brick and mortar locations. Additionally, these channels need to interact cohesively with each other.  Frost & Sullivan also found that less than half (43%) of consumers feel that banks and credit unions today are providing a consistent experience across all channels, and that needs to change. Omnichannel communications should be prioritized.

Map the customer journey using data

TimeTrade’s survey found that an overwhelming majority of customers (88%) use two or more channels to interact with their bank, and 46% use three or more channels within a 12-month period. Consumers want to know their financial institutions are secure with their data and don’t keep asking them for the same information time and again. Data security is extremely important, but harnessing data will help consumers have a more streamlined experience at each customer touchpoint.

Know which channels customers favor for each type of support, service and transaction. For example, Ernst & Young’s study found European customers prefer online channels for balance inquiry (60%) and bill payments/transfers (67%), whereas they prefer going to a branch when seeking advice (62%) or purchasing products and/or services (64%). Understanding customer preferences will set a company up to perform better and retain more of their customers.

It isn’t easy to implement these major improvements to customer communication, especially with the scale of major organizations and other priorities financial institutions must improve to remain competitive. Digital is the future and needs to be a top priority. Improving the consistency of digital channels like social, online, and email is often overlooked; they cannot continue to be siloed practices. It is very easy to fall behind and most of the financial industry is already playing catch-up. An accelerated digital strategy, personalized approach to customer communications, and consistent human presence will help bridge the gap between financial institutions and their target markets.

By: David Squibb, Chief Sales and Marketing Officer, Xpertdoc

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