Customer Experience: The Great Differentiator

by Steve DuPerrieu

Observe the modern banking landscape, and discover a fierce battleground: institution pitted against institution—all vying for the consumer’s attention in a continuous struggle defined by new technology and flashy innovation.

Look closer, however, and at the core of all the fluff lies a basic truth: banking as a service is still very much a commodity. How, then, can bankers escape this position of commodity and break free of the status quo?

The answer lies not in standalone innovations, but in an enhanced overall customer experience.

This comes according to

CSI’s 2018 Banking Priorities Study

, which polls banking executives from across the country. This year’s survey captured feedback from 236 bankers nationwide, all sharing their perspective on which issues, technologies and strategies would affect the financial industry the most during 2018.

Here’s what they had to say:

A Fine-tuned Customer Experience

48% of bankers plan to increase spending on customer experience initiatives in 2018

Based on the study, bankers obviously find value in the customer experience—they are willing to spend more to enhance it, after all—but do they truly understand what it means? What value does your institution bring to your customers’ everyday lives? How do customers feel when they are at your bank or use your services? These questions help define the customer experience for your institution.

David Albertazzi, a senior analyst for Aite Group, weighed in on CSI’s survey results. As he puts it: “The only true differentiation today is around customer experience, and that’s where financial institutions have to compete.”

So how do bankers plan to improve the customer experience this year? The first step centers on digital enhancements.

The Digital Drive Intensifies

38% of bankers will improve the customer experience with digital enhancements

Today, more than ever, external forces shape customer expectations. Banks must realize that they are not solely competing with other financial institutions when it comes to customer experiences. Netflix and Amazon, among others, have ushered in an age of instant accessibility and gratification that have defined customer expectations.

Matching this expectation is no easy task. But, more and more, banks are focused on how they deliver products and services to their customers in a new era, where digital is the primary channel. They’re undertaking various projects that help them streamline their service delivery, accomplishing two feats: giving better products and services to their customers, and doing so in a more efficient and cost-effective manner that drives customer profitability.

Albertazzi agrees: “It makes a lot of sense that digital banking is at the top of the list, especially for community financial institutions. They’re looking at bridging any feature or functionality gaps that they have within their digital banking offerings, and that’s providing that more consistent experience and advanced functionality.

“We know that a lot of the transactions have migrated to the digital channels; and it’s a never-ending process around customer experience improvement, not a beginning and an end. I think you’ll be seeing that year over year.”

According to CSI’s poll, digital innovations for this year will center on:

Digital enhancements, though vital to the success of financial institutions, cannot be isolated. They must interact and collaborate with other banking initiatives to formulate an omnichannel strategy.

A Concrete Omnichannel Strategy

At 48%, reaching new customers through an omnichannel strategy took the second spot for greatest opportunities in 2018

The idea behind omnichannel banking is consistency: creating a singular customer experience across all channels. For example, a feature-rich mobile app, though initially enticing, falls flat as a standalone innovation. If a functionality of that app—say, opening a new account—doesn’t integrate with other channels, the customer experience takes a hit.

Banks’ increased interest in omnichannel strategies indicates that the industry is moving away from an early adopter phase and toward implementation, as omnichannel initiatives gather steam throughout the market. Aite’s Albertazzi concurs:

“This is in line with what we’re seeing; everything surrounds the customer experience, so pursuing omnichannel is obviously rising in importance. It’s all about providing a consistent experience between channels, so if I start a transaction in one channel I can complete it in another, and so on.”

But how will banks realize an omnichannel strategy? Although each institution must take stock of their unique customer base, CSI’s survey unearthed the three most sought-after omnichannel tactics:

Each on their own, these items cannot provide maximize value to your bank. However, use them in conjunction with other functionalities across your institution, and you have the ability to greatly enhance a customer’s experience—and thus, their loyalty.

To read the full results of this year’s survey, download CSI’s Banking Priorities Executive Report 2018.

Steve DuPerrieu is vice president of channels and analytics for CSI. In his role, he provides leadership for CSI’s delivery channel strategy, which includes digital banking, payment services, business and analytics software, and branch/retail delivery solutions. Steve is also a board member for the Association for Financial Technology (AFT).