April 2, 2019

How financial institutions interact with their customers

Customer experience (CX) has come a long way in the last few years.

Nowadays, the traditional face-to-face approach financial institutions used to have is no longer enough to win customer loyalty. The Internet became dominant in most industries when it comes to customer interaction, and financial services is no exception. Nowadays, companies need to have an omni-channel presence.

Bear in mind that nowadays, more than 70% of all bank interactions are digital, led mostly by millennials, and people no longer want just facts, they want a financial guru to help them achieve what they want and attend to their every financial need. Trust grows as easily as it fades and missteps can have catastrophic effects. So, how can financial institutions have an efficient customer relationship management?

Challenges on the road to successful customer relationships

When it comes to digital interactions with costumers, there are a few common challenges most institutions deal with:

  • Face-to-face interactions are scarce historically, financial services companies built their customer’s relationship through face-to-face interactions. However, digital banking has made this increasingly difficult.
  • The process of analyzing applications to grant financial services is complex and long this can be particularly annoying for clients, who don’t understand why it takes that time or what precisely financial institutions want from them, which can ultimately discourage them from opening an account or getting a loan.
  • Identity must be verified in person several regulations are in place to prevent fraud and money laundering schemes, some of which require that identity be verified in person. Hence, customers are called into the institution to undergo a verification process, which can be incredibly off-putting.
  • Some processes require additional information by having to present more documentation, customers have to spend more time gathering information and presenting. If a financial institution doesn’t have the correct customer collaboration tools, they can jeopardize and even lose business.

Customer Relationship Management (CRM) Best Practices

Nurturing relationships with customers in the digital age can be difficult, but necessary in order to stay ahead of the competition. Consider the following 5 ways in which to engage with users to successfully build customer loyalty:

1. Resort to “Helicopter Banking”

Consumers want financial institutions close, yet not too close, to remain accessible and be there whenever they need guidance. From this characterization is that the idea of “helicopter banking” is born (and of the “helicopter” form of parenting millennials were brought up in).

It is possible to achieve this sort of balance, but in order to maintain it, financial institutions need the right combination of service, products, outreach, technology and education, and although many are not ready to face this challenge, solutions are more affordable today than ever before and change is possible.

2. Switch to mobile

Nowadays, more than 70% of banking interactions are digital, and most users prefer their mobile over any other channel available. This requires a change in the institutions’ mindset and strategy. The face of the company is the mobile platform. By having a more user-friendly and efficient mobile app, institutions have the power to attract more customers.

3. Empower users

According to Gartner, by 2020, 85% of customer interactions will be automated, which makes sense, since users don’t really want to go to a bank, they’d rather do everything via apps or, if necessary, by phone. Customers crave independence, simplicity and self-sufficiency.

By using mobile tools and personalization technology, financial institutions can grow their self-service channels. There are several ways to achieve this, but some of the most popular trends are:

  • Smart ATMs these machines will allow for much more than simple deposits or withdrawals, they can become “concierges” and guide the user to complete different financial tasks.
  • Video tutorials traditional written content can feel complex. However, by adopting video, companies can explain their products and services in a more simple and visual way.
  • Live chat bots By resorting to live agent chat features, financial institutions can be present whenever customers need assistance.

4. Create better experiences through stronger relationships

Yes, technology has evolved exceptionally in the past few years, but nothing can replace human interaction. Customers and employees are still at the center of business, and although clients might want to be self-sufficient, there is yet a need to feel connected to others and find a live individual on the other side.

Human interactions are key, and to make sure they are successful when it comes to creating customer loyalty, these are some ways in which to nurture a relationship:

  • Work with consumers from every generation.
  • Ask for customer feedback.
  • Identify problems before they actually grow into problems and proactively look for solutions.
  • Adopt new ways in which to connect with users, such as social media or live chats.

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