Xs and Os: The Power of Experience and Operational Data in Retail Banking

Technology giants like Google and Amazon have upended the retail customer experience, and the digital upheaval has forced retail banks to shift more operations from physical branches to online portals.

Further, banks are no longer competing against just banks; the competition includes every player that offers financial services. With retail banks losing customers to non-traditional competitors, financial institutions must adapt and embrace strategies that keep up with consumers who expect the same kind of omnipresent personalization in all their digital interactions.

Customers are also comparing their bank’s digital experience to that of retailers. Today’s consumers demand the ability to do business anytime, anywhere and on any device, and that expectation extends to retail banking as well. Developing strategies to integrate disparate digital and physical channels into a single, seamless experience is a priority for banks that want to get a better understanding of their customers.

It’s clear that the evolving consumer demand is shifting the way banks approach their digital strategies. Industry players need to meet (or exceed) a high bar. By analyzing the activity and preferences of their clients, banks can tailor offerings to address the priorities of each individual—insight which can be gleaned from experience and operational data to win the wallet share battle. Financial institutions that understand how to combine both will master its delivery of exceptional customer experiences and thrive.

The Relationship Between X- and O-Data

It’s been said time and time again: digital communication technologies transformed the traditional relationship between banks and their account holders. It’s no longer enough to have a “one size fits all” approach—consumers demand more from their banks. In fact, according to data from Accenture, 48 percent of consumers expect specialized treatment for being a good customer, regardless of industry. Financial institutions that can tailor interactions with customers—based on their financial information history and past banking experiences—will unlock the differentiator and the ability to address what today’s consumers want.

Vast Bank understood this shift in customer mentality. Vast Bank is implementing a full integrated platform that provides real-time banking, easy and flexible configuration capabilities, and a 360-degree view of the customer. They felt it was time to take a data-driven approach to serving their customers, while remaining flexible and nimble. By implementing SAP for Banking solutions, combined with Axxiome Digital, Vast Bank is going to offer real-time transactions across mobile, PC and branch channels for customers, with the ultimate goal to make banking surprisingly easy and simple.

A bank’s success is due in large part to its ability to leverage customer experience data (X-data). Financial institutions that gather X-data have the opportunity to obtain and tap into the value of outside-in customer, product and brand feedback. But X-data is only actionable when it’s combined with operational data (O-data).

O-data, or any information pertaining to the company’s operations, workforce, employee processes, etc., is crucial to understand what drives performance and, in turn, engagement with the customer. For example, if a bank member comes into a physical location to discuss potential mortgage offers, future employees should know that this conversation took place. The O-data informs leadership and relevant stakeholders about how to take action in ways that empower employees to deliver great customer experiences.

That’s exactly what mBank, Poland's fourth largest universal banking group, was able to do. mBank needed a way to anticipate its customers’ future demand, while continuing to provide them with personalized banking experiences. The data that was collected from different channels gave mBank’s employees the insights it needed to provide its customers with the most relevant offers and products. Optimizing its interactions and creating special data-driven promotions paid off. Not only did mBank increase its customer satisfaction, it also earned itself the highest net promoter score in Poland.

No matter the channel, the multitude of touchpoints consumers get to choose from should help financial institutions understand what products and services are relevant for each customer.

Improving Customer Experience Through a Feedback Loop

Financial institutions that utilize both types of data can distance themselves by providing customers with timely, relevant and proactive offers. The combination of X- and O-data can also inform employees which channel customers prefer to use to provide their feedback.

Take, for example, those customers who only interact with their banks via mobile or desktop devices. Through these two touchpoints—website and mobile—financial institutions can deploy relationship surveys, allowing banks to understand their perception, where customer needs are not being met, and where there could be opportunities to expand business with them.

Connected, engaged employees are critical to delivering a better customer experience. This is especially true for front-line employees. Low net promoter scores, social media complaints or a poor support phone call can alert customer experience program owners to a negative customer experience. Financial institution employees must have the ability to receive automatic notifications in case of negative sentiment and take action. When customer engagement is tracked and managed through an experience management system, each customer complaint can be resolved in a timely manner.

The same can be said of feedback from call centers. A customer who loses a credit/debit card or needs to speak with a customer representative about missing a mortgage payment, might pick up the phone to connect with an agent at a call center. These calls and experiences can be emotional and should be handled delicately. Banks can glean immediate feedback from the customers about the banks’ contact center representatives immediately following the interaction, regardless of the channel, to improve their customer service strategy.

These details, and information around the customer’s previous interactions, should also be accessible to the call center representative when a customer calls back with a question. When financial institutions have these insights at their fingertips, front line employees can provide a better experience. For example, Banco Atlántida's ability to better serve its customers. Banco Atlántida prides itself on using cutting edge technology to provide its customers with secure, flexible services and products in universal banking. Armed with current and past X-data, Banco Atlántida reduced the time needed to service its clients by 50 percent.

Capturing feedback immediately following in-person visits, mobile or desktop interactions allows banks to gauge more genuine and actionable insight from customer sentiment when the experience is fresh in their minds. By gathering feedback across all channels, banks can generate a customer experience pulse to discover opportunities for improvement.

Personalization’s Role in Winning Wallet Share

Nontraditional banks that prioritize personalization by leveraging all data (X- and O-data) are the future. According to Boston Consulting Group, banks that understand what their customers want are the ones that will see economic benefits.

Personalization will push a revenue shift; some banks can see an increase in its everyday banking revenue by as much as $50 million according to Boston Consulting Group. The same report found that understanding a consumer better and catering to their needs can lower attrition costs by $90 million. SAP’s Digital Banking Industry report reaffirms these findings—68 percent of customers are willing to pay more for a better customer service experience.

Financial institutions understand that customer experience is key to success. Take for example Commonwealth Bank of Australia (CBA). CBA has a large footprint in the country, maintaining 12 million account profiles, processing nine million transactions per day and handling 40 percent of card transactions in Australia. CBA provides specific offers tailored to each individual customer, in real-time, both in person and online. To deliver these hyper-personalized experiences, CBA provides access to X-data across the enterprise to the decision-makers who are also interacting with the customers. Armed with customer data and insights, CBA has improved its customer loyalty by providing relevant offers and exceptional service.

The same SAP Digital Banking Industry report found that 97 percent of banks say customer experience is a focus. But the pace and adoption of technology that banks need to improve customer satisfaction varies by institution. The time to embrace technology that leverages X- and O-data is now. Those that struggle to adapt will fall by the wayside and become obsolete in today’s marketplace.

X-Data and O-Data is the Future

The always-connected, digitally savvy customer is turning to alternative banking providers or traditional banks who have successfully embraced data as part of their digital transformation strategy. Customers want their banks to act more like non-financial institutions in how they utilize personal and transactional data to provide them with a tailored experience. To deliver these contextually relevant offers for financial products and services, banks not only need to understand customers preferred engagement channels, they also need to leverage those channels to continuously improve their offerings and engagement strategies.

To cater to the modern consumer’s expectations and win a share in the retail banking industry, a sound customer experience strategy is key. This requires leveraging X- and O-data to understand customer expectations and intent. When banks understand not only what the customer looks like, but also how they conduct their banking, financial institutions can deliver a better, seamless retail banking experience.