By: Robert Rudolphi, Vice President Financial Services, Clarabridge
We see it over and over again; banks getting hit with larger and larger fines for taking actions that are not in the best interest of their clients. I ask, “what are the direct and indirect costs to the banks, on top of theses fines, for lost clients or lost opportunities?”
Banks are fined for decisions they made that are not in the best interest of their clients. Some examples are fraudulent activities, unfair and discriminatory practices, market manipulation, terrorist financing, and many other reasons. We know that creating high customer satisfaction drives loyal clients. This in turn normally increases up- and cross-sell opportunities, and reduces churn, ultimately driving increased profitability. So, why do banks allow actions to take place that that can hurt long term profitability and even their survival?
To amass the amount of fines listed in the title, I would argue that, although not done on purpose, banks are not really listening to their client feedback We know clients will provide feedback directly to the banks and regulators on areas where they feel they have been treated unfairly. But, are the banks listening and acting on this feedback? Understanding customer expectations and frustrations can help banks identify and prioritize areas of CX improvement on the front-line, during the customer journey, or even at self-service points.
I’ve seen many banks collect client feedback through surveys or other solicited channels. While this is a good start, it does not take into account other forms of client feedback that are just as important – this could be a customer talking directly to an employee in the retail bank, over web chat or email; talking to friends on social media; calling into the bank’s contact center; or even sharing their experiences on review websites or blogs. Surveys only make up, on average, 5% of all client feedback a company receives. If a bank only looks to client surveys, then it’s no wonder they are making decisions harmful to the client and their banking experience.
The challenge is multiplied when you consider that customer expectations are already unbelievably high. Because of CX leaders such as Apple or USAA, people routinely expect a personalized, easy, emotionally rewarding experience. Customers aren’t comparing their experience with your bank against other banks; they are comparing their experience with your bank against their own experiences with CX leaders in any industry.
So, what does this mean for banks who want to alter course and commit to a more customer-centric strategy that improves the client experience and also reduces the risks of hefty fines?
Banks need to take a more holistic approach to analyzing client feedback. They need to better listen to and act on all feedback channels, not just survey or any other single source of feedback. An inability to see or understand the end-to-end customer journey often leads to slow, incremental changes, rather than a measurable business transformation. And, with all the survey data they already have, they need to ensure they get the most out of it. Many banks often only look at single data points from survey feedback, such as star ratings, NPS scores, or CSAT scores. But, they ignore the rich commentary people provide – the reasons WHY they received specific survey scores. It’s good to know your online banking log in process scored an average rating of a 2, but why did it score a 2? What can you specifically do to improve the online log in process?
Embarking on a holistic strategy to listen to, analyze, and act on all client feedback will allow banks to make more informed business decisions that not only reduce or eliminate fines, but ultimately increase client satisfaction, which should be the ultimate goal.