Banking customer experiences shouldn’t look this bad

It’s a uniquely challenging time to be a banker. Just how tough is it? Tough enough that bankers are getting some sympathy from the rest of us.

Marc DeCastro, research director at IDC Financial Insights, said it best in a recent webinar. As he put it, “bankers no longer have to hide their occupation at cocktail parties.”

According to the latest World Retail Banking Report from Capgemini, however, storm clouds are gathering over banks (and their IT networks).

Positive customer experiences declined worldwide for the first time in three years, dipping from 41.6 per cent in 2013 to 39.5 in 2014. In more than a quarter of the countries surveyed, the number of positive customer experiences dropped by more than 10 per cent.

“To reverse the troubling decline in positive experiences, banks need to fully understand evolving customer preferences,” Capgemini suggests.

The report says technology plays a role in both the problem and its possible solutions. Based on the study, here are key challenges today’s banks face in delivering customer experience:

Demographics: Generation Y customers to want mobile banking channels the most – and are the least satisfied with their overall banking experience. “Retail banks must begin paying attention to the needs and expectations of Gen Yers, as their influence is only expected to grow,” the report says.

Irrelevant innovation: Innovation is pointless if it’s irrelevant to customer needs, the study states. Case in point: although Turkish banks were among the world’s first to offer mobile apps, social banking, contactless payments and touch screen debit cards (yes, that’s really a thing), they rank in the bottom five globally for positive customer experiences.

Service expectation vs. delivery gap: Fact 1) Customers ranked access to account information as the most important bank service overall. Fact 2) 89 per cent of customers have a social media account. Fact 3) Only 0.1 per cent of bank customers can actually access their account information on social media today.

Non-bank competitors: “Heightened customer expectations caused by increased adoption of digital devices and advances from non-bank competitors are also factors,” Capgemini concludes. “Freed from the burden of legacy systems, these non-banks are nimbler in developing new financial services … that not only cater to rising customer expectations but continually push those expectations higher.”

Capgemini’s report offers banks a multi-pronged prescription for this ailing customer experience scenario:

Embrace omni-channel: Since “the bank no longer reflects where a customer goes, but what a customer does,” banks must provide “a seamless and unified customer experience through all channels.”

Go big on data: “Data mining will need to be leveraged…(for) understanding individual customer habits and preferences as channels evolve.”

Keep innovation options open: “With technology advancing so quickly… banks should maintain flexible IT and domain architectures” to plan for the future.

Three easy steps, right? Not so easy when you’re a massive financial institution bound by shareholder demands, legacy IT, increasing security concerns and evolving compliance rules.

Learn how a Canadian bank drove a competitive edge with a collaborative network, an Allstream case study