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Data & Analytics

11:21 AM
Fergus Gordon, A.T. Kearney
Fergus Gordon, A.T. Kearney

A How-To Guide To Improving Customer Experience

Banks are focused more than ever on improving their customer experience. Here we offer a step-by-step guide to assessing and improving your bank’s customer experience.

“Get into shape” is a perennial favorite New Year’s resolution for the general population. So is improving the customer experience for retail banking executives. And just like getting fit, customer experience improvement requires dedicated focus and an ongoing commitment to achieving one’s goal. Here are four steps that top performers have gone through to get their customer experience in tip-top shape.

Step 1: Health check

First things first! Before you begin, you need to know what shape you are in so you know where to focus and how hard you can push yourself. Performed internally or with an external consultant, this checkup should measure how well your customer, product, process and staff performances stack up against the “healthy” voice of customer benchmarks. Like most banks, the results probably won’t surprise you: disjointed, complex and manual processes prevent you from serving customers in a consistent, timely and error-free fashion; a bloated menu of products confuses the customer; a one-size-fits-all pricing menu leaves little room for differentiation; and customer-facing staff, despite being eager to help, spend too much time on administrative activities at the expense of customer service. While the results of the checkup may initially depress you, don’t’ worry. With persistence, hard work and the following tips for success it won’t be long before you’ll start showing signs of an improved customer experience.

Step 2: Lose Weight – Responsibly

Now that you know where you are, your next course of action is to lose weight by streamlining processes, clarifying roles and responsibilities, and simplifying your product menu.

Streamlining Processes

An effort focused on improving process performance using “lean” principles can have a dramatic on the customer experience. For example, we have seen clients who have been able to reduce mortgage application-to-funding process cycle-times by 80%, while simultaneously reducing the number of signatures by 75% and eliminating 80% of process hand-offs. The keys to the success of this effort are automating manual tasks through data integration and workflow, and eliminating the root cause of errors through document simplification and data validation. Clarify Roles and Responsibilities

Clarifying roles and responsibilities not only ensures that customers know who to contact, but also keeps staff clear on who is responsible for what task. As part of this effort, it is particularly important to ensure customer-facing staff focus on customers rather than administrative activities. For example, one bank was able to more than double the customer-facing time of branch staff by both transferring simple administrative process responsibilities to a cheaper, centralized role and introducing a new, specialized sales role to handle more complex product sales. Simplify Product Menu

It probably won’t surprise you that 90% of new customer sales come from only 30% of the product portfolio. The remaining 70% of products either aren’t sold anymore, adding to complexity and ongoing operating costs, or have special features associated with them that make them hard for customers to understand and therefore for staff to sell. By rationalizing the product mix and simplifying product features to meet customer demands, we have seen one bank reduce product origination cycle time by up to 25% and increase sales per branch by 2%. In addition, product feature simplification also shortened customers’ purchasing decisions and made it easier for them to purchase products online.

Step 3: Increase Core Strength

OK – so you’ve trimmed down. That’s great. Now it’s time to strengthen your ability to meet customer needs by improving three key sales and service capabilities: the single client view, customer analytics and branch operating rhythms.

Single Client View

It’s difficult to serve customers without a complete and up-to-date customer profile. While most banks have made progress on this front and can now see a full view of banking and credit card relationships held by a customer, too many banks haven’t incorporated mortgage and investment accounts into this view. In addition to a full account view, leaders have also incorporated loyalty and lifetime value metrics, segment participation, activity history and relationship information.

Customer Analytics

When we refer to analytics, we’re talking about generating customer insights that can be applied during a customer interaction to create value. The key word here is ‘applied’. To start out, basic insights should be generated that can be easily understood by staff and customers. For example, one leading bank increased cross-sell rates in pilot locations by 5% in 12 months by having staff select next-best products from a basic 3x3 matrix that compared income with age. The key to success wasn’t the complexity of the insight, but rather its ease of use. Customers also found the “customers like you” nature of the insight appealing, as staff were able to clearly explain the rationale for product recommendations.

Branch Operating Rhythms

Strengthening branch operating rhythms is not only good for growth, it helps to ensure that the right messages and product offers reach consumers. From our study of leading practice banks and retailers, we have found that structured branch operating processes, supported by the right content and visible branch leadership, can have a dramatic impact on the ability of branch staff to drive sales that meet the needs of customers. For example, at one bank we found that branches with high customer satisfaction scores (and sales) were those with branch managers who were excellent at disseminating corporate marketing messages to the front line, coaching branch sales staff and executing branch manager routines.

Step 4: Improve Agility

Having gained strength, it’s now time to become more nimble. This means improving the speed with which you can respond to customers and tailoring the customer experience to individual needs through an integrated channel experience and real-time processing.

Integrated Channel Experience

Those who effectively integrate their channels find that multi-channel customers not only tend to be more satisfied, they also tend to be more profitable. The key to improving the multi-channel customer experience is to deeply understand where and how to integrate channels across key customer journeys. For example, today customers spend the most time researching new products online and enter the branch to complete the product purchase – thus, one key to orchestrating this customer journey is to ensure a seamless handoff from the online channel to the branch. Similarly, with the rapid emergence of the mobile channel as the primary self-service channel, a core part of a product’s origination process should be to register, install and educate customers to use mobile functionality. But remember, you can’t do all of this at once. Success will require prioritization of the customer journeys and careful selection of channel integration points.

Real-Time Processing

The latest core banking systems used by banks like BBVA Compass and Commonwealth Bank of Australia allow real-time processing. This means that customers are instantly able to view account updates and access funds they transfer from one account to another. Staff can also tailor product offerings to customer needs in real time, using preconfigured product building blocks. In addition to significant improvements in customer experience, banks that have also used core platform replacement an excuse to revamp their operating models have realized efficiency gains of 20 to 30 percent. That said, we recognize that all this functionality comes at a cost, both in time and effort.

This may all seem a little daunting. But just as on the first day in the gym, when you see all those fit people around you and think, “I can never be like that,” you really can. All it takes is commitment to the cause, a plan and hard work.

Fergus Gordon is a partner at A.T. Kearney’s financial institutions consulting practice.

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