The future of banking: Overhauling customer experience strategies

Banks have been hit from multiple directions this year. From the collapse of multiple banks earlier this year to a push for more regulations from financial regulators and concern over CEO pay, banks have struggled to get their message across in this environment.

In addition, there are also ongoing trends of customers turning to neobanks or fintechs for financial services. Other tech giants are also jumping into banking services, such as Apple with its high interest savings account.

Another concern is that many banks are shuttering branches, which makes it more difficult for customers to get banking services when they need it, especially for financial advice on serious decisions.

What is the key to banking success in this environment? The answer is to overhaul customer experience strategies to meet consumers where they are.

To gain insights into successful banking customer experience strategies, ATM Marketplace conducted an email interview with Marbue Brown, founder of The Customer Obsession Advantage and former managing director and head of customer experience at JPMorgan Chase. Following are excerpts from that interview.

Q. What are some areas banks get right when it comes to customer service?

A.Banking is a complex service and requires a high bar to deliver exceptional customer experience. Even so, banks are stepping up to the plate to deliver at high level. For example, banks have embraced the concept of enabling customers to do business when, where and how they choose. To that end, they offer a wide array of popular self-service options that don't require customers to visit a branch, including digital account opening, electronic check deposits, electronic funds transfers, online bill pay, online balance inquiries and online securities trading. Additionally, apps have been equipped with virtual assistants to facilitate discovery and usage of these and other self-serve capabilities.

Meanwhile, banks have also introduced a variety of measures to enhance the in-branch experience, including lobby ambassadors to welcome and guide branch visitors, digital check-in to reduce lines, improve the wait time experience and facilitate seamless transition into transactions, pre-scheduled appointments to minimize or eliminate the in-branch wait for a banker, paperless transactions to reduce bureaucracy for customers and enhanced authentication measures to reduce incidents where customers are unable to accomplish their intended objective because they lack the necessary materials to authenticate.

Banks have also embraced the concept of seeing around corners to give customers what they want before they know they need it, at least in some areas. For example, they provide critical push notifications to protect customers from unpleasant surprises, including fraud alerts for suspicious transactions, low-balance alerts to help avoid overdrafts and insufficient funds incidents, and scam alerts in Zelle and wire transfer workflows.

Banks have embraced the principle of working backward from the customer and updated their policies to make them more customer friendly. That includes adding grace periods for customers to "cure" overdrafts, eliminating fees for checks with insufficient funds and offering low-fee/no-fee accounts. Banks have also introduced financial health education and tools to help customers manage their money better and build wealth. That includes free credit score inquiries, budgeting tools and snapshots of spending patterns.

Q. What are areas they struggle with building customer loyalty?

A.Despite all of the steps banks have taken to upgrade their customer experience, they have struggled with getting the word out to their customers about these improvements. As such, customers have not been able to take full advantage of these benefits and banks haven't gotten commensurate credit for them that would help to build loyalty.

Meanwhile, there are still several areas where customers feel banks could deliver a much better experience. For example, as the Federal Reserve has raised interest rates, the interest rates banks pay out to customers haven't increased as rapidly as the interest rates they charge customers. This encourages customers to look elsewhere (e.g., fintechs and neobanks) to get a better return on their money.

Customers also feel that banks could do a better job of vetting them for credit and that they could use a broader set of references as part of that vetting to make credit more readily available. Customers also take issue with the lead time it takes to get a credit decision as well as hoops they sometimes have to jump through to complete a credit application despite being an existing customer. As such, customers are prone to look to alternative sources for their credit needs such as fintechs, neobanks, independent credit card issuers and independent mortgage lenders.

Banks also struggle with delivering parity across the various channels where they service customers as well as with enabling customers to transition between channels seamlessly. Often there is a discrepancy between the types of transactions that can be completed on the web versus those that can be completed in the mobile app. There are different rules for funds availability for checks deposited in the branch versus checks deposited at an ATM or through the mobile app. There are also different limits for withdrawals made in branches versus withdrawals made at ATMs, and customers often aren't aware of those limits or the differences.

Q. What are lessons from other industries banks can learn from when it comes to CX?

A. One key lesson that banks can learn from CX icons in other industries is that if a policy is good for customers, it's good for business. No, I'm not advocating that banks or anyone else should give away the store. After all, they aren't charities. They're in business to make a profit, and banks in particular have a fiduciary responsibility to safeguard their customers' money. I am saying that companies who adopt policies that stack the odds in the customer's favor tend to perform substantially better than their peers on financial benchmarks such as revenue, profit, shareholder value, etc. For example, paying more generous interest rates may initially seem more expensive, but might be a better financial investment than acquisition costs for new customers when compared versus reduced deposit outflows as well as additional deposit funds transferred in from happier existing customers.

Q. What questions should banks be asking themselves to deliver better CX?

Do they have the right people to deliver inspirational CX? In a nutshell, a company comprised of customer obsessed people will deliver customer obsessed service. People are the single most important ingredient necessary to deliver great CX.

Do they have the right policies to deliver aspirational CX? Often employees want to do the right things for customers, but policies get in the way. CX aspirations and policies must be aligned.

Do they have the right incentives to motivate their teams to deliver exceptional CX? Incentives drive behavior. If banks incent rigid adherence to scripts, they will get rigid adherence to scripts. If they incent terse responses to inquiries, that's what they'll get. If they incent behaviors that deliver exceptional experiences, they'll get that too.

Are leaders delivering the right communications to mobilize their teams to deliver transcendent CX? There's no "one and done" in communications about CX. It has to be a constant drumbeat using the full range of available tools to deliver the message.

Do they have the right infrastructure to deliver exceptional CX? Infrastructure includes the full suite of components that enable delivery of top notch CX, including hiring, onboarding, continuous learning, tools, measurements and more.

Q. Do you see tech as the magic fix to these issues? Why or why not?

A. Tech is not a magic fix for the areas where banks struggle with building loyalty, but there is an important role for tech in addressing these challenges. For example, tech can help to enable parity across servicing channels, but some of the disparity across channels is due to policy, not technology. Tech can facilitate seamless transitions between servicing channels so customers can start a process in one channel and pick up where they left off in another channel. GenAI copilots will enable live agents to rapidly consolidate information from multiple channels to personalize their contacts with customers and quickly resolve challenging inquiries without starting from scratch. GenAI-powered virtual assistants and chatbots will increase the effectiveness of self-service options and improve the user experience, but there will still be a need to get the word out about what's available. Bottom line is that it will take a combination of people, policy, infrastructure and tech to tackle the areas where banks struggle with building loyalty.