Financial Services Customer Experience: 5 Growth Strategies

Financial institutions depend on trust to complete every customer transaction. Are you sending the right customer experience (CX) signals? Without it, you’ll have to chase customers for outstanding invoices or to discuss their quotes.

By thinking of CX as a growth driver, you set your organization up for success. CX has become a strategic priority across the financial services sector. McKinsey research shows that banks leading in customer satisfaction also outperform in monetary metrics.

Satisfied customers are six times more likely to remain with a bank than dissatisfied ones. Simply put, CX is a key differentiator in the customer-centric financial services sector, making it crucial for organizations to improve it.

Let’s discuss CX in financial services and explore strategies and initiatives to increase trust and loyalty through CX.

Key CX Challenges in Financial Services

Financial services is a broad area that covers banking, assets, insurance, credit services, investments, and various other functions. Financial service providers usually only enter a consumer’s life when they’re making high-risk decisions. Any inconvenience multiplies its impact on the bottom line.

For that reason, consider the emotional and logistical journey people take when interacting with your employees, processes, and technology. This customer engagement amounts to your CX, which stays with them.

The banking sector is plagued by clunky processes that provide security at the cost of a tedious and disjointed CX. Customers face friction when opening accounts or applying for a loan because of a lack of clarity and the many hurdles in the customer journey.

Although many institutions are rooting for an experience with mobile applications and digital services, this transformation is yet to come.

These processes experience a lot of friction due to outdated standard operating procedures and systems. According to research by Deloitte, even though banks have upgraded many customer-facing apps, “many are still struggling to align front- and back-office systems,” which results in a subpar, fragmented user experience. In practical terms, a customer might start an application online but be asked for the same information again by a branch, call center, or contact center due to system gaps.

Here’s another easy challenge to address: using customer service numbers. Some apps require users to flip back and forth when entering a phone number to dial — or worse, translate a vanity phone number into digits. The fix? Make phone numbers clickable within your website and app to provide a seamless experience.

Financial services customers engage through offline and digital channels, such as mobile apps, websites, branch offices, call centers, ATMs, chat, and more. They expect a consistent omnichannel service experience. Retail banking customers use an average of 2.7 channels each time they interact with their bank.

A typical journey might begin with researching a product on a smartphone, continue by chatting with a representative online, and finish in a branch office. If any of these handoffs are disjointed, the customer’s satisfaction plummets — for example, if a customer must re-explain their issue after being transferred or cannot resume a process started in another channel.

It’s tricky to offer a personalized experience when customer data and real-time activities happen in silos. It troubles customers as the processes stagnate due to the unavailability of fresh information. For example, customers seeking ways to adjust their loan structure must navigate through the institution with a paper trail.

This lack of self-service frustrates customers and pushes them away from financial institutions. Any financial services institution trying to make a statement in a competitive market needs to improve this experience. Forrester’s paper ‘The Business Impact of Investing In Experience’ suggests that experience-driven businesses increased their revenue by 170% in 2020 compared to 140% in 2018.

CX matters a lot in financial services businesses. On the positive CX side, it directly translates into increased revenue. Goldberg Hedge Funds, a financial services business that provides small business loans, relied on Nextiva to improve customer data visibility and usability. They increased revenue in the first six months and saw a 27% increase in monthly loans originated.

When you focus on improving CX, new opportunities to drive revenue will appear.

Strategies to Improve CX in Financial Services

Financial services leaders must make comprehensive improvements in technology, processes, products, and culture to deliver a CX worth returning to. Use the strategies below to inspire your own and make the required improvements.

1. Build an authentic omnichannel experience

Customers need the ability to switch channels at will and still get the experience they deserve. Make a list of customers’ channels to contact you, and see how you can integrate them. Bridging these contact channels, like phone, email, chat, and social media, into one helps agents deliver better service because they can see the holistic customer experience in one view, without checking several isolated systems.

Omnichannel customer service tools from Nextiva give you a unified interface to assist clients and offer a streamlined experience regardless of how often they switch channels.

AI chatbots and virtual assistants help keep your support live 24/7. AI agents will also help you route queries to the most suitable agent, reducing the need to transfer the interaction to another agent. Ensure a real-time data flow among the online banking system, support software, and in-person advisors. This will reduce hurdles in a customer’s journey.

For example, suppose a customer starts applying for a loan online but calls support for help or reaches out via messaging. In this case, the agent can see the partially completed application and pick up where the customer left off.

To do this, many institutions deploy an omnichannel system that integrates with their CRM software. This prevents customers from experiencing the frustration of repetition and offers them more personalized service. With consistent customer interactions, financial providers gain trust and can meet customers where they are without losing service quality.

2. Personalize the customer journey in real time

A customer journey is usually distributed among various touchpoints. To give realistic suggestions, you must ensure data sync among them. AI-powered analytics will use this data to offer recommendations that align with customer needs.

To personalize, you need to reimagine the customer life cycle and ensure the systems that support it are integrated. In McKinsey research, among 1,500 customer journeys, most fell into one of two buckets: reducing friction or reimagining. However, the researchers observed that the “bookend” journeys of shopping, onboarding, and problem resolution disproportionately drive the CX in a bank.

For example, a new account onboarding frequently triggers customer frustration. From Harvard Business Review’s white paper ‘Taking the Financial Services Customer Experience to the Next Level’:

When people are at select stages of the customer life cycle, use AI to tailor financial recommendations. Consider developing an integrated system using previous customer interactions to deliver contextual support in these stages.

The bookend stages disproportionally influence overall customer satisfaction, yet are often where legacy pain points persist. To eliminate a pain point holistically, institutions can assemble cross-functional teams spanning product, IT, operations, and compliance to personalize the whole process from a customer’s perspective while making it more streamlined.

3. Expedite onboarding and identity verification

Customers who contact financial institutions typically go through a disjointed process where they have to repeat their story over and over — for example, filling in the same details on different forms. This means the customers aren’t having the best experience.

Once a customer has shared their details, you can use them to autofill the information in different forms. That improvement alone can increase loyalty, cut down on customer service calls, and build trust at an essential moment in the customer relationship.

It’s best to implement AI-driven identity verification for faster account setup. Several platforms like Jumio expedite identity verification in the United States.

Unless mandated otherwise by law, use e-signatures to sign documents and let customers upload their proofs to reduce any delay caused by manual paperwork.

Most identity verification platforms have machine learning capabilities to detect fraud in real time. This will help reduce security risks without increasing friction. With these digital processes, customers can get services and products faster, improving their experience.

4. Enhance customer support with AI and automation

When offering financial services, trust is paramount for your customers to do business with you. This trust comes from time-tested experience where the customers relied on you to resolve their issues. It comes from showing up for your client whenever they’re in need.

This means you need to be available 24/7 for your customers, which can be achieved by deploying AI-powered interactive voice response (IVR) systems. These systems will take calls for you and route them to expert agents. It increases your reliability, as customers don’t have to hop between different agents to find the resolution. Moreover, it takes up calls and outreach when you’re away while updating the customer to expect a call back during working hours. For routine inquiries or straightforward issues, an AI chatbot can give a resolution promptly, without needing the assistance of a live agent.

It’s best to use real-time sentiment analysis to cater to frustrated customers better and faster to prevent their lousy experience from becoming a blunder.

5. Apply CX insights for customer satisfaction

Track net promoter score and customer satisfaction score to monitor CX trends. These trends will deliver the actionable insights you need to identify what went wrong in your workflow and make improvements and advancements.

Create real-time feedback loops to identify the customer’s actual pain points. Often, customers don’t escalate these issues because they might not want to invest their valuable time into dealing with processes that fail to meet their expectations. This means you need to dig and catch the real issues. Therefore, it becomes essential to seek customer feedback and use it actively.

When you proactively implement customers’ feedback, it makes them feel valued, improving their overall experience. You can integrate these insights with customer behavioral data to reimagine a new journey for your clients that promises a better CX.

The Future of CX in Financial Services

In the future, the financial service space will likely become more automated and technology driven. Significant personalization and intelligence can be developed. Here’s a quick overview of what to expect in the financial services client experience in the foreseeable years.

AI-driven personal finance

People have already started asking generative AI for suggestions on personal finance, such as creating a financial plan that considers a person’s earnings, expenses, intended investments, and savings. In the days to come, financial institutions might develop native AI tools to recommend financial plans based on actual spending and saving trends in a person’s finances.

While 92% of companies have adopted AI, less than 10% are fully mature in their use of it. In 2025, many companies will likely jump to higher levels of AI maturity.

AI won’t simply work as a recommendation engine. Instead, it will help tomorrow’s consumers ensure more robust security with AI-based, real-time fraud detection. This will prevent customers from becoming victims of sophisticated modern-day scams.

Conversational banking and voice AI

Customers might be using more voice assistants powered by AI. This conversational AI can easily report customers’ balances and make transactions via voice commands.

Voice data might be used as an authentication method, expediting identity verification. However, in the initial stages, institutions will likely use different authentication methods until voice AI perfectly recognizes human identities from voice without being tricked.

Embedded finance and open banking

Banking products and systems may exist far away from each other at present. However, they might be a more cohesive solution with integrated financial products. For example, if a system notices a trend in cash in the account, it can suggest relevant investment products personalized for the client.

These products can be delivered so that customers can use or purchase them without experiencing friction. The technology would be able to work through the prerequisites with the help of customers’ data.

Turn CX Into Your Institution’s Best-Kept Asset With Nextiva

Success in financial services belongs to organizations that can combine high tech with high touch. AI will help augment (not replace) human connection and trust to deliver a standardized experience at scale.

Ready to raise the bar for your financial institution? Nextiva’s unified CXM platform integrates with your workflow and aligns your service delivery and communication with customers’ expectations. Get a demo today to see how to transform your CX.

It’s paramount that CX leaders and executives invest in the right technology to deliver experiences that truly resonate with customers’ expectations. According to a Forrester study, a one-point CX Index score increase can result in incremental revenue of $123 million for a large multichannel bank and $92 million for a direct bank. All that change adds up, doesn’t it?