A practical guide to CX in financial services

Digital technology has transformed how consumers interact with businesses in all industries. Customers can now conduct transactions at the touch of a button from their preferred device. They can interact with companies long after the sun sets or even while enjoying a midnight snack. However, if interactions are too impersonal, customers won't get the help or engagement they’re after and may look elsewhere. 

Consumer expectations of an enjoyable experience when working with businesses are higher than ever, and customer experience (CX) in financial services is no exception. Financial institutions have the potential to recognize significant gains by improving their customers’ experience.

As more and more companies enter the financial services space, driven in part by the growth in fintechs, customers continually have new options for interacting with financial institutions. To gain and maintain a loyal customer base, financial institutions must find a way to strike the perfect balance between meeting their goals and providing the ideal customer experience.

By learning more about the nuances of customer experience in financial services, how to optimize CX for the financial sector, and current CX trends, you can develop a plan to serve your customers better. 

Customer experience in financial services encompasses every interaction with a financial institution, from opening accounts and conducting transactions to seeking assistance, resolving issues, and interacting with customer service. These experiences shape customers' overall perception of the organization and strongly influence brand loyalty.

In today’s banking landscape, customer experience has evolved to include intuitive digital interfaces, fast and convenient services, and robust security measures for managing finances online.

A 2023 poll conducted by Morning Consult on behalf of the American Bankers Association (among a national sample of 2,211 adults) found that 71% of consumers prefer managing their accounts through mobile apps or computers. However, the J.D. Power 2023 Retail Banking Satisfaction Study, based on responses from 101,400 retail bank customers, revealed that 38% still view bank branches as essential.

As a result, customer experience in financial services must balance digital innovation with high-quality, human-delivered service.

CX in financial services is multifaceted. Consumers expect financial institutions to keep their funds safe and easily accessible through seamless interactions that inspire confidence and peace of mind.

Since financial services can be complex, enhancing CX with educational resources makes sense to promote customer knowledge and understanding of the sector. A seamless experience that meets changing needs provides various benefits for financial organizations. Let’s take a look at some of these.

A wider customer base

According to the Digital-First Banking Tracker 2021, produced by NCR Corporation and PYMNTS, 42% of consumers choose financial institutions based on the simplicity of their online services. Providing a range of innovative solutions delivers the experience many customers seek from modern banking.

Improved financial literacy among customers

The 2023 Chase Digital Banking Attitudes Survey found that 87% of consumers use their bank’s app at least monthly, and users rely on it for more than checking their balance. Nearly half of customers use a banking app to monitor and improve credit scores, and many app users are interested in subscription-management tools.

Supplying these services for customers helps them prepare for major financial decisions and additional banking products like savings accounts and loans.

Ensure customer needs are met

While digital banking tools continue to grow in popularity, the need for in-person services remains significant. By adopting a hybrid strategy that seamlessly integrates digital convenience with access to human assistance, financial institutions can help customers avoid unnecessary frustration and achieve their goals.

Providing the ideal customer experience as a financial services business requires a careful balance of innovation and dependability. To deliver a truly exceptional service, you need to understand customer expectations and pain points surrounding convenience, privacy, personalized services, and accessibility of funds.

After developing a comprehensive plan, measure the results to determine whether you're meeting your goals. Employing the following key strategies can help teams measure CX efforts and make improvements as needed.

Collect and analyze feedback

Real-time feedback is essential to understanding customers' changing needs. Collect feedback from a variety of sources, including:

• NPS surveys

• Social media

• Reviews

• Customer support interactions

Analyze the feedback to identify pain points, trends, and areas for improvement. When making changes, draw up some KPIs to measure the new variables accurately.

Leverage data and analytics to automate routine tasks

Using tools to automate routine tasks will ensure you consistently receive customer feedback. You will also free up resources for improved customer service through meaningful interactions.

In financial services, this might include tools for:

• Onboarding

• Account management

• Customer support

These increase convenience for customers while easing the workload for employees and reducing manual errors. As a result, financial institutions can achieve their CX goals with less effort.

Educate and guide frontline teams

Customers expect financial services to evolve with technology trends and consumer needs. 

Providing ongoing training and support to frontline teams will give them the necessary knowledge and tools to provide exceptional customer experience. With highly trained, engaged staff, you’ll delight customers with personalized services that anticipate their needs.

Track progress and make changes

Measurable data will enable you to track your progress accurately. Identify the key performance indicators (KPIs) that most effectively measure CX and the metrics that will allow you to gauge progress. For example, this might be a key stage in customers' bank account opening process.

Within this journey, you would assess your team's performance on key steps of this journey against agreed metrics to measure progress and recognize areas for improvement. You could also solicit additional feedback from employees and customers to devise strategies for continuous improvement.

Hubspot's 2024 State of Customer Service Report underscores the complexity of delivering excellent CX across industries. Customers demand speed and convenience, yet they also value a personal touch and human connection.

Managing customers' most critical assets compound these challenges for the financial sector. Despite these complexities, customers expect the same level of seamless CX they experience with businesses in other industries.

The following trends showcase actionable strategies for financial institutions to enhance customer experience.

Customer service moves from multichannel to omnichannel

For some time, major banks have offered multiple tools, allowing customers to connect with the bank online, by phone, through a mobile app, or at a branch location.

When these different service options were first introduced, they were siloed and didn't share information. As a result, banks had a fragmented view of their customers' identities, and customers received inconsistent offers or experiences across channels.

However, as customer data platforms have become more advanced and analytics more robust, banks have been able to offer a more connected experience. This omnichannel approach integrates platforms to provide a complete view of the customer, including engagement levels and activity across channels. Omnichannel support enables seamless integration across all touchpoints that update in real time.

When a customer's interactions across all platforms are unified, they can use multiple channels in a single interaction and seamlessly switch between devices. The result is a personalized experience that recognizes the customer across different lines of business.

Increased functionality across digital channels

Digital channels offer greater convenience, allowing customers to conduct business beyond traditional hours. As the number of digitally native financial customers (those who have grown up in the digital age) grows, digital channels must evolve with consumer knowledge. Financial institutions can achieve this by raising awareness of digital options, enhancing digital offerings with AI features, and leveraging personalization technology to provide a more engaging experience.

Enhanced self-service options

CX Network’s 2022 Global State of Customer Experience in Financial Services reports that 75% of customers want to use self-service channels when dealing with financial institutions. When people know what they want and how to achieve it, taking care of a task without assistance from a service representative can be faster and more convenient. However, this only works if the solution is easy to use.

Enhancing digital self-service channels can work in various ways. For example, websites with live chat features can assist customers at their exact point of need to solve a problem when it crops up. Education video content can also improve customers' understanding of products and services, enabling them to make more informed decisions.

Relationships that improve customer service experiences

Humans play a vital role in delivering exceptional customer service in financial services. While technology can enhance convenience, a technical issue or disruption in service can feel like a crisis for customers if there is no clear path to resolution. In these moments, human interaction becomes crucial and a pivotal point in the customer journey.

To create a truly customer-centric experience, financial institutions must build strong relationships with customers across generations, ensuring clear and empathetic communication. Seeking customer feedback is essential for effectively balancing automation and personal touch. Financial institutions can enhance the overall experience and foster lasting, trust-based relationships with their customers by integrating human service into digital channels like social media and live chat.

Resources that can educate and empower customers

Financial services are complex. Educating customers empowers them to take action without visiting a local branch or seeking assistance from a support representative. This concept takes a giant leap forward when banks can incorporate financial literacy education and tools into their offerings.

The better people understand financial concepts, the more they can make informed financial decisions to avoid debt and work toward long-term financial goals. By providing free resources and tools relevant to the customer at a specific time, financial services firms help customers feel more comfortable using financial tools and managing their assets.

Financial literacy resources and tools can help customers learn about many areas, including:

• Budgeting

• Acquiring credit

• Available financial products

• Planning for retirement

Collection and ethical use of customer data to facilitate personalization

According to a survey of 1,505 US consumers commissioned by software company Q2 and conducted by The Harris Poll in February 2024, 74% of customers want more personalized experiences from the banks. To meet these expectations, banks must ethically collect data that reflects customer actions,  preferences, and consent.

Financial institutions can use advanced analytics and machine learning to analyze this data to deliver timely, relevant information. This approach gives customers the personalization they demand and helps them discover pertinent services that align with their needs.

Increased transparency to improve customer trust

Personalization requires agencies to collect more information from customers. However, transparency about how this data is protected is a greater concern in the financial sector than in other industries.

Financial agencies already face stringent data privacy regulations, but these may not be enough to provide customers with peace of mind that their data is protected.

Financial organizations must protect customer data and share information about data collection and safeguarding policies. Transparency about how customer data gets used and your firm's actions to keep customer data safe will help build trust, leading to long-term loyalty. As loyalty grows, customers will be more willing to share information that, in turn, can be turned into customer insights used to improve their experience.