Rethinking CX Is a Tall Order for FSI
- By CDOTrends editors
- December 28, 2021
Customer experience (CX) is fast becoming the key market differentiator for enterprises of all stripes — and the financial services industry (FSI) is no different. However, the rise of digital-native fintech startups has disrupted the status quo for FSI firms in offering fast, flexible services with equally flexible pricing plans and changed the way customers rate their experience with the incumbents.
FSI companies aren’t sitting still; they are digitalizing themselves to stay in the game. But developing a superior CX hinges on far more than an agile digital platform with a holistic view of the customer. And it requires a serious rethink of how CX is measured in the first place.
FSI businesses need to rethink how they evaluate CX because the customers themselves don’t think about brands the way they used to. The increasing ubiquity of digital channels means that customers increasingly expect every brand they interact with to match their experience expectations, regardless of industry segment.
“People aren’t comparing us with other banks or even other payment solutions. They’re comparing us with things like their Netflix experience,” says an executive with HSBC-backed mobile payments firm PayMe.
Legacy complexity
That’s a tall order for FSI firms to overcome, not least because digital natives aren’t encumbered by a complex ecosystem backed by ancient legacy processes.
Incumbent FSI companies generally are. Their business is complex by nature, and the systems that support financial services are a hodgepodge of technologies and processes across different divisions and geographies, only some of which may be standardized, notes a managing director at London Stock Exchange Group.
“There's a reason you need COBOL programmers in certain places — you still have some systems that have been around for a while, and you can't decommission those easily and start from scratch the way a virtual bank is able to do today,” he says.
Of course, there is no shortage of technology solutions on offer to simplify that legacy complexity. But advanced technology alone doesn’t guarantee better CX. It’s how you use it in a way that delivers the experience customers want — even when customers have conflicting expectations.
An executive from insurance firm AIA offers the example of SMS notifications whenever a customer logs onto a banking or insurance app. “Those SMSs are to assure the customer we take security seriously, but if they get too many messages, it becomes annoying.”
Customer insights
Another challenge FSI companies face is leveraging big data to improve CX and provide valuable insights to customers, whether it’s justifying the claim of a good insurance premium or evaluating mortgage portfolio risks for things like climate change.
However, an executive from insurance firm Marsh McLennan says the trick is finding out what kinds of insights the customer would find valuable. “How do you get their feedback so that you can really understand what would make it better for them and to continue to enhance those experiences?”
An executive from QBE Insurance agrees, adding that perhaps e-commerce companies are already showing the way forward. “You buy something, and immediately they put up a box saying, give us our score out of five, and put your comments here right now. That’s brave and revolutionary because every other customer that might purchase the same item can see that immediately. That's where financial services need to get to.”
This raises a key challenge for FSI companies in harnessing customer data to inform their CX strategy or any other purpose: the FSI sector is highly regulated, especially when it comes to data, says the PayMe executive. “Even if we want to share with our consumers how much we know about them [and] what are the moments that we will interact with your life as a brand, we’re stopped by legal and compliance because that is encroaching upon [consumers’] privacy.”
The AIA executive agrees, noting that even sharing data between different departments creates legal and compliance issues that are difficult to get around. There’s also the challenge of leveraging data from, say, social network posts without coming across as intrusive or creepy.
On the other hand, observes one executive from insurance company FWD, a lot of that depends on the relationship you have with your customers.
“For brands I like, I'm very forgiving, so you can get away with quite a bit. For brands I love, I might actually volunteer something that you might not even be looking for,” he says. “So if I come to you with issues or challenges that I want you to fix or improve, I feel like I’m trying to help.”
Make CX your cultural DNA
The good news is that none of these challenges is insurmountable. However, it does mean that as FSI companies transform with the times, their CX strategy also needs to transform to a model where they focus on the customer journey, enabling them to be better able to listen to their customers and respond to their needs, says Pat Bolster, head of Greater China at Qualtrics.
Moreover, he adds, FSI companies need to evaluate their CX investments based on business outcomes instead, such as customer lifetime value, the share of wallet and brand perception, among others.
The FWD executive agrees, adding that companies need to make CX part of their cultural DNA for this change to happen.
“You want to be able to build a culture where everyone's thinking about how to build my relationship with my customer on a one-on-one basis and scale that across my entire customer base.”
The PayMe executive adds, “CX should be embedded in the culture of every department, and at the C-suite level rather than just as a department. It has to be from the top down, all the way to the front line. Then you’re not just simply reacting to customer feedback — you’re working on it as a problem statement and prioritizing it as key problems you want to solve.”
Image credit: iStockphoto/Omar Osman