New research released today has found Australia’s banks and insurers have made great strides to earn greater customer advocacy. They can now accelerate digitisation and improve customer experience by using data in ways that engage customers through smart personalisation.
These are among the findings from a new report by Bain & Company and Salesforce: The Customer Imperative in Financial Services: Permission to Personalise. The joint research was designed to gauge consumers’ perceptions and priorities, surveying more than 5,000 consumers and 296 financial executives, and conducting in-depth interviews with senior executives.
Comments on the news:
- “It’s an exciting time for financial services as the preference for digital channels has now extended across all age groups and when we surveyed customers, we found that they are increasingly looking for a more digital, seamless and personalised experience.” said Katrina Cuthell, a partner at Bain & Company based in Sydney. “Financial services organisations need to continue building on the trust that they have been able to achieve and ensure that they don’t miss this opportunity to provide their customers with a truly unique and personalised offering, by using data and communication effectively and strategically.”
- “Customers have given the financial services a big tick for their handling of the pandemic and their investment in digital channels. Now is the time to channel this trust into delivering the experiences customers expect; seamless, personalised and on the channel that works best for them.” Sascha Ambrose, Regional Vice President, Financial Services, Salesforce Australia. “Underpinned by the highest levels of trust and transparency, permission to personalise customer experiences can translate to more empowered employees, shorter return to investment timeframes and services which put the customer at the centre.”
Key insights from the report:
- Banks and insurers have moved the needle on customer advocacy as a result of actions taken during the COVID-19 pandemic
- About 30 per cent of traditional bank customers reported that they were more likely to recommend their primary bank based on their experience during the pandemic, compared with only 20 per cent of digital and direct bank customers
- Preference for digital-first has moved beyond routine experiences and all-digital experiences are now most likely to generate customer advocacy
- For instance, the average NPS for customers who applied for or refinanced a mortgage completely digitally was 52 vs. 18 for those who completed it in person or over a phone
- The majority of customers trust banks and insurers to protect their data, understand how it’s used and are comfortable with the way it is being used
- Nearly 65 per cent of consumers trust their bank or insurer to protect their data, and 60 per cent are comfortable with how their data is being used
- Around 50 per cent of consumers support their financial institution using personal data they already have, while around 40 per cent support the use of additional publicly available personal data from other entities (such as social media or technology companies)
- By showing proactive engagement and better use of data in these ways, banks can work on addressing their issues with hidden defection, as currently more than 40 per cent of Australian banking customers purchase products outside of their main financial institution, mainly on digital channels.
Recommendations:
Now that we’ve seen that Australia’s banks and insurers have proven that they can move with purpose and agility they will need to learn how to better serve their customers and improve their return on investment. Five steps that will help them in this journey are:
- Make an unambiguous commitment to meet customers’ priorities: The organisation takes a multi-year perspective to delivering propositions and experiences that meet the specific needs of individual customers, even in the face of short-term profit and investment pressures. As one senior executive told us:
- Get simple, digital, and personalised, with a human touch for moments of truth: Engagement with customers must be relevant and timely. For more routine experiences, support can come through bots and live chat. For complex or emotive experiences, data-driven intelligence should be readily accessible for front-line employees.
- Structure the operating model to enable end-to-end digital execution: Multi-disciplinary teams formed of both technology and business staff should have the autonomy and mandate to transform high-priority experiences.
- Align priorities for technology and data with customer outcomes: Redefine and align technology and data investment priorities and roadmaps according to customer experience priorities rather than as ‘top down’ buckets of investment which are then mapped back to the business.
- Set customer metrics at a level detailed enough to enable real-time orchestration: All banks and insurers collect customer feedback, but leading firms go well beyond that. They monitor a range of granular customer and operational metrics in real time via a customer experience cockpit. Using these metrics, they quickly pinpoint actions and opportunities to engage customers or improve their experience.
