User Experience

The Importance of Customer Service in the Era of Digital Banks

Identifying gaps in customers’ overall experience

When we ask executives at community banks and credit unions (CUs) what sets them apart from their competitors, we get the same answer every single time: “It’s our customer service.” However, when thinking about customer satisfaction, it is important to consider where and how banks and CUs interact with their customers. From studies we have performed with many of our clients, the vast majority of interactions happen in remote and digital spaces.

That said, there seems to be a disconnect at many community banks and CUs between what consumers look for in terms of customer service and how problem resolution occurs.

So, how can these organizations identify gaps in their customers’ overall experience (so they can better address them)? In this article, we attempt to answer that question.

Anatomy of the Customer Experience

A customer’s experience with a community bank or CU is most often happening through a digital third-party and, when things go wrong, on the phone with a contact center. In these areas, organizations have various problems.

Third-Party Vendors

The majority of community banks and CUs don’t own the digital experiences beyond their public websites. Account opening, credit applications, online and mobile banking, chat, appointment booking, calculators, and many other experiences are owned by third-party vendors. These are often cobbled together into a “Frankenstein monster” of experiences. This is further exacerbated by the attitude towards the public website, which is seen by many bankers as a static electronic catalog of the organization’s products.

While we understand the historic reasons leading us to this point, we like to challenge executives and ask, “Your organizations wouldn’t dream of outsourcing the branch experience, so why are you OK with outsourcing your digital experience?”

Digital Experience

Customers tend to compare their digital experiences to those in other parts of their lives (Netflix, Zappos, Amazon, etc) and don’t necessarily understand why their community bank doesn’t measure up. In some cases, they understand that the organization is too small to be like the bigger companies, but they wish they found a way to have better experiences. During our research, we heard directly from a majority of banking customers that they didn’t understand why there is such a big difference in experiences throughout a single organization.

Customer Service

While customer service experiences are owned and controlled by an organization, contact centers are managed for operational efficiency rather than optimized for customer experiences. Contact center agents aren’t equipped to be able to provide “delightful experiences” as many organizations say they aim to do. Agents don’t have access to the consumer’s full relationship with the organization. They are required to navigate a myriad of systems to answer questions about the many products offered. While there is a focus on training, knowledge bases and other tools that could assist agents are not usually deployed. Additionally, many agents are trained to keep calls short and to control costs. Further, many community banks and CUs don’t offer digital channels that most modern consumers expect, like chat and social media service.

Customers tell us that, as a result, they are frustrated with long phone waits, difficulty in authenticating before getting an answer to a question or problem, and lackluster performance from agents. “It’s amazing how often their systems freeze up when I’m on the phone,” one customer told us. Having observed the other side, agents use such excuses to buy time while navigating through systems or getting approval to do something they aren’t authorized to do.

What can community banks and CUs do to address these problems?

Organizations can tackle each of the problems detailed here by deploying more technology. However, these issues are symptoms of a much larger problem: the strategic need to change business models to meet customer expectations. While many organizations’ executive teams and boards can and do identify the main problem, they find themselves unsure how to proceed.
In our experience, these are the best ways to address these problems:

  • Find someone that can help leadership define a plan. Most bank executives are excellent leaders and managers but their experience has been focused on running the business, not changing it. We have worked with many organizations to put such a plan together. Changing a business model is not a simple refurbishment but a soul-searching exercise.
  • Once there is a plan, leadership needs to be ready to roll-up their sleeves and get involved. A business model cannot be delegated to a single leader like a Chief Digital Officer, CIO, or CMO. Limiting change to a single function will deliver change in, and friction with, a single function.
  • Build empathy across the organization by interacting with customers directly. Customer-focus needs to become a real goal of the organization, and not just relegated to the call center and the branch. Design-Thinking or Jobs to Be Done (JTBD) disciplines should be implemented in the organization to put the customers at the center of all activities. This includes putting processes in place to speak to customers directly as well as building and understanding customer journeys (not process maps) to further build empathy throughout the organization. Every initiative, internal or external, must be examined to understand the impact on the customer journey.
  • An agile approach to work should be adopted. Agile and agile-like methodologies aren’t limited to software development. Having a continuous loop of value-added activities performed and managed by the organization allows for a quick pivot that will match market changes and the approach of new entrants to the industry like fintech firms.
  • Empower value-stream owners to make decisions. Design-Thinking, JTBD, and Agile bring a need to have empowered value-stream owners that don’t have to run every single decision through an executive team. Instead, they update leadership and ask for direction through a defined process.
  • Eliminate ‘Shiny Object Syndrome’. The silver bullet platform doesn’t exist and any vendor that tells you otherwise shouldn’t be trusted. Simply put, the banking industry needs to view technology as an enabler, not as the sole driver of digital transformation.

Shifting to a business model with an emphasis on customer services should be an ongoing effort. As business models change within and outside the industry, customer needs change and, with that, so do banking customer experience trends. We are living through a change that seemed to have begun with the introduction of the internet, accelerated by mobile technologies, and put on steroids by the pandemic. The banking business model was able to move at the speed of change in the past. That is no longer true.