This article was written by Peter Ku and originally appeared on the Informatica Blog here: https://www.informatica.com/blogs/top-financial-services-customer-experience-strategies.html
The need to improve the financial services customer experience (CX) is not just a cliché. It represents one of the top business priorities for organizations. These include everyone from banks and insurance to local credit unions. According to The Financial Brand,1 it’s critical for financial institutions to invest in new digital solutions, artificial intelligence (AI), cloud and data to improve customer engagement in today’s world. Why is it so important? Financial institutions in the banking industry that invest in customer experience have higher rates of recommendation. They also have greater wallet share and are more likely to upsell or cross-sell products and services to existing customers.
The same holds true in the insurance sector. “Insurers that offer superior customer service beat their peers in terms of profitability,” according to McKinsey.2 Think about it. Happy customers will continue to do business with companies that make the process easy and convenient. They are also most likely to recommend their financial institutions to their friends and family members.
3 Ways Organizations Are Improving Financial Services Customer Experience
- Mining mobile application data with next-generation data analytics and AI and machine learning (ML). Banks and insurance companies are now able to leverage the massive amounts of data created by their mobile application solutions. They first capture that data in a cloud data lake. They then mine that data with the latest AI- and ML-powered analytics applications to develop new products, optimize existing processes, better empower customers and improve the overall CX.
- Investing in new digital and remote services. Financial institutions are working to smooth the transition from face-to-face services to online engagement. This will require companies to provide customers with additional support in the form of educational content, such as step-by-step tutorials and interactive videos and webinars. These interactive, digital and remote services are helping to attract technically savvy, younger customers who are less prone to doing business purely on brand.
- Continuing to automate customer interactions. Financial institutions are redefining how they engage and interact with customers with the help of advancements in business automation, robotics and AI. More and more customer service requests are now being handled by these technologies instead of human beings. These include fielding requests in real-time about an online bill payment or the status of a recent insurance claim.
Top 6 Data Challenges That Impact Financial Services Customer Experience
Unfortunately, a series of long-standing data challenges can make it difficult to achieve success and gain business value from these investments:
- Lack of data accessibility. None of these investments to improve CX will work if the data required by these systems and applications is not available to them. Manual data integration can be complex and fragile. And, tools need to be designed to handle the data volume, variety, formats and endpoints required for enterprise use.
- Lack of a customer-centric view of the business: To improve customer experience, financial institutions need more than just account- or policy-centric information. They need information about the overall relationship with customers. Unfortunately, the systems and applications that exist today are often within a business silo. This means customer information is maintained separately from other customer information sources.
- Valid and authoritative data: To properly handle customer calls and servicing requests, organization need access to valid phone, email and address information. Contact information can change or become invalid, impacting the ability to reach customers. This can drive up the cost of customer support, marketing and sales and negatively affect customer experience.
- Unprotected sensitive data: We live in world where there is more data than ever before. There are more systems and applications both on-premises and in the cloud. And criminals are constantly looking to compromise sensitive data for their financial gain. Breaches of customer data can be costly, both financially and to a business’s reputation. It can be the ultimate reason that customers take their business somewhere else.
- Invalid and inaccurate data: Relying on poor quality data to support your customer’s needs is a self-fulling prophecy that is bound to end up on a bad note. Organizations have spent decades dealing with data quality issues by throwing bodies at the problem through custom-coded solutions or by using tools that were designed for back-office IT professionals.
- Lack of data knowledge by business users: Finally, people need to be able to understand the data they need to do their jobs. This includes everyone from claims representatives who support existing policyholders to client onboarding managers who assist new corporate banking customers for a commercial line of credit. Business users need access to information that can help answer simple questions about their data, including:
- What data do we use to support customer service requests?
- What does it mean?
- Where does this data come from?
- Who can I ask if I have questions?
3 Key Steps to Better Customer Experience
- Assess your current data integration, application integration, data quality, master data management, and data governance processes and methods. Are these being done by developers or data engineers through custom solutions? Are you using legacy tools to deal with today’s data challenges? Both options do not work and often increase the cost of managing data. More seriously, they do not deliver the data that business users require to do their jobs.
- Define and align your data strategy to support your CX improvement needs across each business function. Have a clear understanding of what data is required and will be used to respond to customer needs. Document your business requirements as to why certain data elements are needed. Make that available for others to access and understand who is involved in dealing with customer interactions. Adopting a data marketplace is a great way to help day-to-day business users get answers to their data questions and access the data they need.
- Build and grow a data-driven culture. Encourage people to use data in a way that improves decision-making in support of your customer’s needs. This helps promote the value of data and align it to your top business priorities vs. treating it as a byproduct of a transaction or interaction.