Changes, Risks, and Fines: Why Banks Need CEM

By: Clarabridge Team

March 25, 2014

By: Charlie Ydoate, VP of Finance Industry & Latin America


Banking corporations have tended not to be early adopters of Customer Experience Management (CEM) solutions. In general, either they have not recognized the value of a formal CEM program, or they have tried to take care of it with existing processes.  One reason is that banking has traditionally been a very “sticky” industry, with customers staying with their bank for many years, often in spite of marginal or even poor customer service. Another reason is that data analysis is a big part of what banking corporations do daily, so they assume that it is something they can handle. It’s easy to understand why they might be reluctant to invest in a third-party CEM solution.

The problem for banking, however, is that things have changed.

Banks aren’t local:  Even though most banking corporations are now huge, distributed organizations spanning large geographical areas, people still hold their local banks accountable for each web-based transaction, each interaction with a teller, and every glitch in the mobile app. Capturing feedback from consumers regardless of how they have encountered you – in any branch, through an app, or online – enables you to ensure a consistent experience that increases loyalty.

Money walks fast:  It has become easier than ever to transfer funds from one bank to another with a simple online transaction.  It only takes one bad customer experience for a customer to close their accounts and move to another bank. Ensuring that customers aren’t having those bad experiences becomes a priority.

Compliance is mandatory:  Banks are at risk for millions of dollars in fines if they are not in compliance with federal regulations, and this is increasingly tied to customer experience. For example, when banking customers in the U.S. submit complaints through the Consumer Financial Protection Bureau (CFPB) website, banks have “15 days to respond to [the consumer] and the CFPB. Companies are expected to close all but the most complicated complaints within 60 days.” This isn’t a long time to wade through the vast volume of customer feedback and identify the issue and then close the loop with the customers and the regulatory agency.

Banks in other parts of the world follow similar requirements. They must have a way to close the loop both with customers and government agencies regarding customer issues to avoid huge fines and brand damage; it makes sense to have systems in place to capture and respond to these issues before the CFPB, FINRA, or another agency gets involved.

“Social” doesn’t mean “friendly”:  Social media is a great place to vent about bad customer experiences. Your customer’s friends (and their friends, and their friend-of-a -friends, etc.) can all know about a problem with your customer service within minutes. A comprehensive CEM solution that understands social networks and their nuances is the only way to make sure you know about it, too.

CEM solutions will help your banking organization manage the customer experience across the entire enterprise, keep your customers from moving to the competition, help avoid huge fines through regulatory compliance, and keep your fingers on the pulse of customer sentiment – and all of that helps your bottom line.