The financial services sector continues to work on improving customer experience, and its understanding of consumer behavior to better engage with customers. In the current economic downturn, the need to lean into digital-first channels, AI and automation can benefit organizations as they seek to address new and evolving customer needs.
By Jenni Palocsik
Leveraging digital-first channels is an enormous business focus which has a two-pronged benefit: enabling customers to self-serve at the same time it alleviates workers on the customer front lines. The rise of digital channels has financial services leaders asking a new set of questions: How do we use AI and automation to deliver the right mix of self-service and human-enabled engagement to drive better customer experience (CX)?
Verint’s research on the Engagement Capacity Gap shows 62 percent of financial services leaders say digital-first engagement is their top priority. Still, financial services firms face challenges that must be addressed including: Understanding and quickly acting on changing consumer behaviors (says 55%), obtaining a unified view of customer engagement from siloed interaction data (says 54%), building enduring customer relationships (says 53%), and managing the growing volume of customer interactions (says 51%).
In an environment where it’s a lot more expensive to acquire a new customer – and extremely important to retain the ones you have, banks need to understand their customer’s needs and protect them while they do it. In our study, 66 percent say voice of the customer (VoC) and experience management is a high-priority technology initiative. In addition, 51 percent say they plan to increase spending on compliance, security, and fraud solutions.
AI is the common thread that untangles the more cumbersome parts of customer engagement. That may be why 84 percent of business leaders say expanding AI and automation are top priorities this year to help improve customer interactions and enhance overall customer and employee experiences.
Financial services providers and banks are looking at what consumers value in their banking relationships. Verint recently conducted research to understand the key drivers of customer satisfaction in banking with insights from a survey of more than 5,000 consumers across Gen Z, Millennials, Gen X and Baby Boomer demographics.
When choosing a new bank, our research shows fraud protection (83%) and fraud alerts (60%) are among the top factors consumers consider. This is not surprising, given the rise in fraud that has accompanied the acceleration of digital banking during the pandemic.
Guidance for Digital-First Customer Engagement
The research provides guidance for banks as they put digital-first strategies in place. Digital channels are popular for straightforward tasks such as: Researching a product or service (57%), conducting a transaction (53%), and applying for a product or service (49%).
When a task is more complex, however, customers prefer a human-assisted interaction. When asked about the last time they needed to resolve an issue with their accounts, 54 percent of consumers first called the bank or visited a branch or drive-through. Baby Boomers were more likely than younger consumers to go inside the bank (27%) – at least 10 percentage points higher than younger consumers.
Around half of those who had to resolve an issue with their account or online access said it was harder than anticipated. And 43 percent of Gen Z and 40 percent of Millennials say they spent either a little or a lot more effort than expected completing their most recent task.
Thirty percent of each of these generations said they would switch to a different financial institution if it required no effort on their part. Additionally, nearly two-thirds of Gen Z and Millennials who found it more difficult than expected to complete a task would make the switch.
Banks Come Up Short on In-Person Support
Our banking research also highlights the need for banks to improve the in-branch experience as a crucial way to improve customer experience and satisfaction. Nearly 40 percent of consumers who visited branches reported they were left waiting longer than expected.
This may be why 68 percent of financial services executives plan to increase staffing levels, despite challenges to recruit skilled talent.
Over the past few years, banks have rationalized their brick-and-mortar operations amidst shutdowns and as digital banking has grown during the pandemic. The banking industry is challenged with a scenario where they need personal human interactions between their employees and their customers, even while overall visits to branches are still low.
Banks are calling back furloughed staff, reallocating team members who were solely dedicated to digital channels and rethinking how to adequately staff bank branches to meet fluctuating needs for in-person service.
Retooling Needed to Support Younger Customers
Supporting the financial wellbeing of younger consumers was also highlighted in our research as an important customer experience and satisfaction factor.
In last year’s VXI for Banking report, Gen Z and Millennial consumers led the way in adopting new additive banking services such as micropayment apps such as Venmo and Zelle. This year’s research shows a continuation of the need to expand banking offerings to incorporate new financial tools and technologies to empower younger consumers with the means to better manage their finances.
This year’s study found Gen Z and Millennial banking consumers need more help cutting costs, tracking subscriptions, creating budgets, and managing expenses.
With the pressures of global inflation rising, assistance with financial management is likely to have a bigger impact on younger generations than it might have in the past. With many younger consumers willing to switch banking providers, banks must offer products and services to help address the gap in Gen Z and Millennials’ financial knowledge to retain a loyal customer base for the long-term. This is critical, especially given the fact that over the next decade, experts say Millennials and Gen-Z stand to gain trillions of dollars from previous generations in the greatest wealth transfer the country has ever experienced.
Customer Experience is Competitive Advantage
The financial services sector continues to struggle with understanding and quickly acting on changing consumer behaviors, securing a unified view of customer engagement from siloed interaction data, improving the in-branch experience and supporting the financial well-being of younger consumers.
Leveraging digital-first strategies, AI and automation will deliver the winning solutions they need to stay competitive, maintain loyalty and achieve long-term success.
About the Author
Jenni Palocsik is vice president, marketing insights, experience and enablement at Verint.