Digitalisation not a cure-all for customer experience shortcomings

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How can financial services companies reconnect with their customers as the world remains in lockdown?

When you ask financial services executives about their firms’ responses to the Covid-19 pandemic, they tend to wax lyrical about their lightning-fast transition to work from home.

They trumpet their ability to provide customers with seamless transactional capabilities and uninterrupted access to their digital platforms during the worst that government lockdown could throw at them.

Their confidence in the innovative technologies that underpin the fourth industrial revolution (4IR) may be warranted; but it hides a sinister reality that few executives have cottoned onto.

The rapid transition to digital everything is entrenching the suboptimal customer experience that many financial services customers were exposed to before the pandemic, because new solutions depend heavily on legacy customer support infrastructure and resources.

Innovations such as APIs, AI-powered chat bots and digital platforms tend to fall flat whenever a human touch is required. Another challenge facing well-established financial services brands results from dealing with customer needs “on aggregate”.

This worked in the old days when paper- based systems made it impossible to tailor solutions based on an individual’s needs; nowadays a more intimate customer relationship is indicated.

Executive teams at leading financial services brands should not take to the stage to exalt their digital customer experience victories without first spending a few hours transacting on equal footing with these customers.

They should be considering whether the minimal inconvenience they suffered while relocating their C-suite operations from offices to homes is like that experienced in other areas of the business.

There is plenty of evidence that supports that customer services staff, although able to work from home, are struggling to maintain pre-pandemic efficiencies.

How else would you explain the “slow service due to coronavirus” messages placed prominently on the home pages of countless financial services firms? Leading 21st century financial services brands should not be disclaiming their customer experience. In so doing they further dilute their often poor pre-pandemic customer service levels.

An opinion piece titled “Covid-19 not a good enough excuse for customer service failings”, penned by John Fitzsimons, and published on on 15 September 2020, expands on our thinking.

“Has Covid-19 become a bit of a convenient catch-all excuse that businesses can use to justify failings, whether they are related to the pandemic or not?” he asks, citing hundreds of customer experience nightmares that have played out across industries and countries. Customers in the UK have complained bitterly about their inability to contact banks, retailers and telecommunication providers during lockdown.

Many customers waited weeks or months to open new bank accounts or receive or return parcels due to the inflexibility of pre-pandemic processes and the inability of firms to adapt to the new trading environment. The gist of Fitzsimons’ article was that service levels remain poor despite financial services giants having had six or more months to acclimatise to lockdown regulations.

As we approach one year in lockdown, many South Africa-based businesses are still using Covid-19 as a blanket excuse for each service delivery hiccup they encounter. Sadly, these failings most often stem from legacy processes that depend on human intervention.

Our transactional experience with asset managers, banks and insurers during lockdown was much the same as our pre-pandemic experience. This is nothing to write home about: Online transactional accounts have been operating remotely, without hassle, for decades.

Problems creep in when we require advice, guidance or support with actions that occur outside the digital environment. In such instances we found that navigating the quagmire of customer support, whether by telephone or online using email or online chat, was as diabolical during the pandemic as before.

In-branch customer experience was no better.

By way of example, this writer spent more time in a bank branch under lockdown conditions than any time in the preceding decade, and this to close a business bank account, which should have been possible digitally.

What should financial services firms focus onto improve the customer experience? A McKinsey & Company insight, titled “Adapting customer experience in the time of coronavirus” leads with the observation that the lockdown and pandemic “forced a rethinking of what customer care means”.

The global consulting firm suggests that companies that outperformed during lockdown did so by reassessing their customer journeys and customer satisfaction metrics.

McKinsey describes seven actions that enable brands to emotionally connect with their customers, under four category headings (see diagram). Convenience and ease of use are already a ticket-to-play in an increasingly digital world; but brand-to-consumer excellence also depends on establishing trusted relationships and paying attention to customers’ personal safety and financial well-being.

Processes built around tech innovation, such as big data analytics and artificial intelligence, make it possible for financial services brands to achieve greater granularity in their view of individual customers than ever before. It is time to leverage this information to revolutionise the customer experience.

Brands that failed to deliver a truly stand-out customer experience, in the writer’s opinion, were obsessed with creating illusions of competence and continuity by adopting the inward-looking mantra: If we get bums on seats at customer support desks and ensure our online platforms have 100% uptime, then surely our job is done. Wrong! Being capacitated to deliver customer service does not guarantee an exemplary customer experience.

“A customer’s interaction with a company can trigger an immediate and lingering effect on his or her sense of trust and loyalty,” writes McKinsey, before adding that a business’ ability to “meet their customers’ needs with empathy, care and concern” isa primary barometer of customer experience.

There are four customer experience practices that will help firms to build resilience, frame short-term responses and prepare customer-focused companies for success. These are: Focusing on care and connection; meeting customers where they are today; reimagining customer experience for a world after Covid-19; and building capabilities for a fast- changing environment.

These practices are intuitive when considered against the backdrop of evolving customer behaviours. The millennial and subsequent generations are more thoughtful and selective than their predecessors. They form strong associations with brands based on how brands interact with society and to what extent they can trust what the brand stands for.

The same customers are driving the investment communities segue into the world of impact investing. 

McKinsey’s research shows, for example, that 64% of customers choose to buy from socially-responsible brands.

And of course, customers favour products and services that are accessible in real-time, affordable and readily available on their terms.

A 2020 report by KPMG, titled “Customer experience in the new reality”, observes that the pandemic had an immediate and widespread impact on customer behaviour across industries, countries and demographics. “Expectations have heightened as priorities have shifted to health and safety first, which have in turn changed decision-making and buying behaviour,” they write, drawing attention to the fact that yesterday’s great customer experience is no longer good enough.

KPMG urges firms to “maintain their commercial cadence with their customers” by focusing on six pillars, which are experience excellence; integrity by acting ethically and demonstrably in their customers’ best interests; a focus on resolution and proactively addressing customer problems; the accurate setting of expectations; reducing the time and effort customers need to expend by enabling frictionless interactions; and delivering a personalised experience with empathy and compassion.

SA’s financial services firms entered the pandemic with a significant lead over other industries insofar their digital capabilities, which explains the ease with which they met various lockdown- induced operational challenges.

They should not, however, assume that their ability to deliver products and services digitally equates to excellent customer service. The trick is to consolidate the leading position in innovative digital administration and distribution while enhancing the customer experience underpin.

As McKinsey concludes: “Customer leaders who care and innovate during this crisis and anticipate how customers will change their habits will build stronger relationships that will endure after the crisis passes.”

Gareth Stokes is a communication specialist at Stokes Media.

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This article originally appeared in the February 2020 edition of Collective Insight, which appears in the 18 February edition of finweek. You can buy and download the magazine here.

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