open banking

What keeps you loyal to your bank? In a sector not exactly renowned for outstanding customer experiences, the answer is usually simple (and damning).

Secrecy.

Historically, the difficulty of extracting information on our saving, spending and borrowing habits has kept us stuck to the banks we signed up to in our teens, even if we feel zero emotional fidelity to them. According to the Competition and Markets Authority (CMI), currently, just 3% of people switch their accounts. However, research by According to Bain & Company’s 2016 Customer Loyalty in Retail Banking study, 29% of global consumers said they would switch their primary bank if it were easy to do so.

And for many banks, their time is up.

This Saturday, the EU’s new “open banking” rules hit the UK, and they’re about to quietly blow the banking system apart. Rolling out across the country from 13th January to March 2018, these rules give people full ownership over their financial data – data that has historically been hoarded by their banks.

For the first time, not only can we see valuable details about how we spend our money and how much we pay in fees – we can easily and securely share that information with other companies, too. As a consequence, a whole new marketplace of apps and services is emerging to help us manage our finances in smarter, more personalised ways, from securing better loans to budgeting more effectively.

It’s the next step in the “fintech” revolution, and the opportunity for customers is clear. But the challenge for banks is clear, too. Now that financial providers have been forced to give up their biggest competitive advantage, the spotlight is being thrown back on the quality of their service – not a traditional strong point. Those that have invested in customer engagement will weather the revolution, but in recent years all too many have neglected this ‘intangible’ area in favour of yet another ad campaign or software upgrade.

The threat is compounded because many of the new financial startups are already experts in keeping their customers on side. These hungry new companies may have been weaned on the web, but they also understand that to gain traction in a crowded market, they must feel more human than the old banking guard. From always-on multi-platform customer service to clean user-centric design, they’ve baked in great customer experience from the start.

Which will leave an awful lot of big names playing catch-up.

What’s more, if established providers think that their expertise in the sector will save them from the ramifications of poor customer experience, they’re plain wrong. A recent Accenture report on the Banking Customer 2020 showed that almost half of customers would likely bank with a company they currently do business with that does not currently offer banking services. In other words, gain your customers’ trust, and they’ll stick with you whatever the service (Virgin is a great example of this). Lose it, and they’ll jump ship as soon as they’re unchained, however long you’ve been in the game.

The good news? Even if you’ve been somewhat neglecting customer engagement, it’s never too late to start. The same Accenture report found that 80% of customers who switched providers due to poor customer service said they could have been retained. It also discovered that the average customer has 17 interactions with their main bank per month. That’s a lot of chances to re-engage your customers in a vastly expanded marketplace.

But how?

Consistently high levels of customer engagement stem from a company-wide climate where human conversations thrive, day in, day out – and achieving that is slightly outside the scope of one article! However, just starting to get your head around some of the new rules of customer experience can make a big difference. Here are my top five, refined from working with people-focused financial clients such as First Direct, Barclays and TSB.

  1. Identify your killer skills. The consensus as to what a good customer experience looks like has changed a lot over the decades. In a digital economy, polite and professional are no longer enough. Rather than training employees in ‘soft skills’ such as empathy, you need to dig into your data, analysing exactly which behaviours are engaging your customers – then dial them up.
  2. Lead by example. Set the right tone, and it will nurture the right climate, which will drive the right conversations and result in the right customer experience. And tone comes from the very top. So ask yourself: what visible acts are your leaders making in the office every day to prove that they’re committed to people, not just profit?
  3. Be curious. In a world of effortless online research, banks must find a way to provide customers with real value from every human interaction. This requires treating each customer as an individual and being genuinely curious about how they can be helped, engaged and inspired. Listen, sell, serve, offer a simple life hack – just make sure you’re offering something they can’t get from a bot.

 

If you want more information about the impact of open banking on customer engagement, or need help upgrading your customer experience, give Blue Sky a call on +44 (0) 1483 739400, an email at hello@blue-sky.co.uk or a tweet @BlueSkyEngage.

We’re on a mission to improve the UK’s customer experience, one conversation at a time!

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