Two steps to success: Why financial services companies need to master the customer journey

Financial services companies are under more pressure than ever before to both defend and gain market share. With so many businesses in the sector citing customer experience as a key focus, or as the differentiator they will use to win custom, it is more important than ever to be precise about what it actually means.

Customer experience is a catch-all term, and it can encompass a vast variety of interactions, from applying for a mortgage to a simple balance check. For many financial services companies, there can be thousands, if not millions, of touch-points with customers every day, each one contributing to that experience. Ensuring every one of them is successful is a substantial task. So, where to begin?

Define the customer journey

Banks should look past the intimidatingly large umbrella term and focus on what is more tangible. The customer journey is one of the most crucial elements of customer experience, and getting it right is a significant challenge. A journey can be long or short, urgent or routine, profitable or loss-making, but each one needs due care and attention. Something as small as a phone call to change an address can become a negative experience if the customer does not get the resolution they need, or if it takes too long to complete.

Customers now use apps and technology extensively in their everyday lives. They are not only well informed but also impatient for a response and for good service. They expect to be served quickly.

Gaining a clear and precise understanding of the customer journey is a vital step for any financial services company. Banks need to examine when the first interaction starts and ends, how it differs for each customer, and how it differs for each type of request. Stripping back to the basics is a step banks often overlook when they set out to improve the experience, but without it they cannot make that experience any better.

A uniform approach to every customer on a given journey is not feasible, and some banks have an easier task than others. Monzo, for example, which has won recognition for good customer service, has a very targeted audience. Challenger banks tend to attract younger customers, or tech-savvy members of an older generation who are frustrated with the bigger banks. For these customers, mobile is not just acceptable, it is the primary way they deal with their bank. It is no surprise that chatbots work for most of them, that fewer of them call in the first instance, and that the customer journey is therefore narrower.

At the other end of the spectrum are the legacy banks. They have been established for decades and hold huge customer bases. Some of those customers want to use a branch, others prefer the phone and a real person, others want a strong app experience with limited human contact, and others want to do everything outside business hours. That breadth is a real challenge for large banks.

The transformation in these legacy businesses has been immense in a relatively short period. In 2012, for example, Barclays had no mobile customers and its branch network handled around one million customer interactions a month. By 2018 it had 6.5 million mobile customers and was handling 150 million customer interactions a month. Every customer journey is different, and so is every customer. Working out the journey is a bigger challenge in this context, which makes it all the more important.

Take immediate action

The good news is that defining the customer journey is not complicated. Too many companies hold misconceptions about the process, and those misconceptions block something that can be straightforward. There are two practical steps a company can take to understand and define its customer journey accurately.

The first is customer segmentation, grouping customers into demographic categories such as age and location. This categorisation ensures each group is set on the journey most appropriate to their query and their profile. The second is channel identification, which examines who is making contact, through which channel, and how well each channel handles different types of request. The result is a clear view of the types of customer a business has and the channels they are most likely to use, so the business can tailor what it offers, and to whom.

Do not be distracted by technology

Much is made of the transformative power of technology. Challenger banks build their offering on it, and legacy banks are working hard to incorporate it across their operations. But technology should enhance the customer journey, not be the sole driver of it. It is a facilitator, and to get the best from it the end-to-end processes have to be thoroughly tested for efficiency.

Companies often assume customer experience equals the latest technology. We have had requests to implement AI, virtual assistants and many other tech services over the years. All of it is possible, and these technologies can be transformative, but they are no use layered onto weak foundations. Financial services companies need to get the basics of the customer journey right first, asking questions such as why a customer is calling, how long it takes to handle the call, and how the customer feels at the end of it.

It is striking how many companies are not getting these basics right. We once worked with a large retail bank that had 17 customer service numbers listed on its site, 15 of them inactive. It was a cheap, quick fix that fresh eyes and the right support could identify easily. Another client found that many customers were calling to check their balance despite being registered for mobile banking, because the digital process was broken.

At a time when many providers want to sell financial services businesses large, expensive transformation contracts, the value of simplification cannot be overstated. The right customer experience expertise does not sell technology for its own sake. It delivers practical changes that make a business better tomorrow, next week, and for years to come.