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Investing in Empathy: 4 Ways Financial Services Firms Are Improving Customer Experience


By: Marc DeCastro, Research Director, Consumer Banking, IDC, Guest Blogger

If you ask most financial services executives if being empathetic is part of their collective DNA, most will surely tell you that is the case. And no doubt they are sincere. However, asking an executive if they run an empathetic organization is akin to asking someone if they are a nice person. Most people feel they are nice but may not fully understand what it really means to be nice.

The same is true with empathy in financial services. Delivering an empathetic financial experience involves keeping the customer at the center while engaging the customer using both available data and technology on their channel of choice. Data is really the key here when trying to deliver empathy in financial services, as data provides the insight required before, during, and even after the engagement has happened.

As consumers shift to digital-first interactions, and in some cases digital-only engagement, with their financial institutions, this empathetic experience must be able to be delivered seamlessly across both digital and physical channels. If your customers find that they have a better experience when dealing with a bank employee on a particular issue or question, they will likely continue to use that channel while avoiding digital options. This is probably not what most institutions want; they want to be able to deliver the best experience possible on the channel of preference and deliver this at scale.

An example of this might be a customer who asks a question about a new product or feature using SMS text messaging. Engaging with that customer across SMS might make sense up to a certain point. However, the customer may eventually need to be directed to a website, mobile app, or bank employee if the conversation becomes too complex.

Delivering this empathetic experience boils down to two main themes. First, provide predictable communications that are personalized and are contextually aware of current and previous engagements. Communication is at the foundation of every interaction and engagement during all steps of the customer’s financial journey. Allow customers the flexibility of choosing their channel, then provide a continual flow of conversations without the need for customers to repeat information. These communications need to be capable of producing results in real time, both during customer acquisition and account servicing.

The second theme is about loyalty and building lifetime value. Achieving this requires the financial institution to focus less on pushing a transaction through from point A to point B and focus more on providing more personalized experiences and advice using contextual guidance provided by the customer and obtained through existing data points. Loyalty is something that is built over time as the institution shows not only that they care about the financial needs of their customer, but that they are able to guide them to either a different service or a resolution to an issue that makes sense and provides real-time actionable advice, like “Click here to accept” or “Select a time for one of our employees to reach out to you.”

Where to Invest in Customer Experience

Improving customer experience is a top priority for financial services executives. In fact, IDC surveyed 116 financial service executives in Feb 2021 and the top three priorities were revenue growth, improving customer experience and satisfaction, and improving operational efficiencies. There are four areas of focus that should drive investment in technology solutions to help improve customer experience. They are:

  1. Customer Intelligence. Investments here need to be able to capture as many points of data as possible, both data generated within the institution as well as third-party data sources. In order to build or provide solutions that can personalize experiences based on the context of the engagement, there must be a foundational layer of intelligence to draw from, otherwise personalization becomes difficult, if not impossible. With the right amount of customer intelligence, it leads itself nicely into the next strategic initiative, product innovation.
  2. Product Innovation. Innovation on traditional bank products and services can often be more about policy, and less about technology. Instant access to deposited checks as opposed to putting legal, but inconvenient holds for customers is simply a decision in policy based on risk of fraud. However, other innovation can leverage modern technology that provides some level of innovation. For example, a small but growing number of institutions have provided their deposit account customers with access to their direct deposit payroll a few days prior to the funds being deposited into the account. Seeing repetitive deposits of a certain amount and cadence can provide a level of comfort that the funds will be there on a specific day, thus minimizing the risk to the institution. The innovation here is in the analytics that identifies the customers that would benefit from such a product and determines when and where this makes sense.
  3. Orchestrating Customer Intelligence and Product Innovation. Now that customer intelligence and data collection have been prioritized and innovation solutions are being developed, it will be important to combine the two into tangible customer improvements. Solutions like virtual agents, next-generation chatbots, and true omnichannel engagement can result from successful implementations of new products built on top of modern architecture. Having an agile environment in place will continue to foster innovation and improve overall efficiencies.
  4. Growing Role of AI. AI solutions in financial services have begun to evolve way beyond robotic process automation and have reached the level of providing true value back to the customer and the financial institution’s employees. AI can be used to monitor text, voice, sentiment, and emotion in a way that can deliver that empathetic experience many individuals are looking for from their institution. AI solutions will not only engage with the customer directly but can identify and reimagine legacy workflows and create improved processes.

Providing a truly hyper-personalized and empathetic banking experience will require that we truly put the customer in the center of everything and view products and services not through the lens of the financial institution, but rather through the lens of the customer. To build trust, we need to think less about providing financial transactions and more about helping customers achieve their financial goals. We also need to provide employees with the same level of modernized solutions and interfaces that we provide to customers, which will create that common and fulfilling experiences.

Interested in learning more about empathy in financial services? Download this insightful, custom POV to understand how to adjust your technology strategy to meet the changing digital-first expectations of your customers. Or, check out this infographic that explores 4 Keys to Delivering Empathy in Financial Services.