Lifting the lid

Great customer service pays, but are banks making the most of omni-channel technology to deliver it?

James O’Hare
Managing director, Link UK

Banks are not immediately top of people’s lists for great service, and the results of the most recent UK Customer Satisfaction Index reflect this; the sector stands at 78.8/100, representing a drop of 0.3 points compared to the previous study.

Even so, drilling into the detail of the index shows that banks must be getting something right. As a sector it stands 1.8 percentage points above the all-sector average for service. In comparison, insurance lags behind but is moving in the right direction with a 0.4 point improvement on last summer’s data.

Studies show that any gains are worth it; a bank or building society that has a
satisfaction score of at least one point higher than the sector average will achieve net gains of 3,628 compared to an average of a 4,419 net loss for those with a score of at least one point below the sector average.

The influence great customer service has on the bottom line could not be clearer – if you do not have happy customers, you will not have loyal ones. Retention is critical and, in a world where easy account switching is guaranteed, the cost to acquire only becomes more expensive.

Of course, there is another factor influencing customer behaviour and that is the advent of digital banking. Challenger neo-banks have shown just how easy it is to join a bank using your mobile, make payments, set up direct debits, track your spending and even save with ‘round-up’ services.

It is this kind of innovation that is spurring the incumbents to rethink not just their operating model but their service model too. And rightly so. In the last year, there was an 8.1 percentage point increase in the number of people who said they would pay more for good service.

The human face of service

An application that is easy to use is a boon for keeping people happy. But when they are unhappy or need help, sometimes a shiny interface will not cut it. They need a knowledgeable human instead. For speed, many people will shy away from a phone call, it takes too long. If they can send a message while doing something else like travelling home from work by train or waiting for a kids’ football match to finish, then they will.

Text is by far the most preferred option for contacting a company, and its use grew over 2021. But web chat and social media are still proving popular, email less so. But really from a customer’s perspective, any channel offered is worthwhile provided you get help.

And that is the crux of the omni-channel service model; offering people the option to get in touch must be beneficial for both the customer in terms of time and the organisation in terms of money.

However, as financial services companies have adopted different channels over the years, according to budget and technology capability, so they have ended up with a patchwork of systems and suppliers. Ten years ago, telephone and email were the go-to communication methods. Now it is all about Facebook Messenger and WhatsApp supported by chatbots.

Complex service tools inhibit success

The trouble is, this is expensive to resource, and doesn’t provide a consistent way of communicating with anyone nor a single view of a customer. These pitfalls have made companies rethink their omni-channel approach and appreciate just how important it is to have a single platform that can manage it all.

As a result, companies are evaluating the communication tools they use, and recognising that if people want fast and convenient ways to stay in touch, they must consolidate the options.

There is, however, a catch. Not every customer is the same. There is no one size fits all when it comes to communication preferences, and there is a danger that vulnerable or less able people will be side-lined. That is why companies must segment their customers differently. It is only by taking a more sophisticated approach to understanding customer needs that a brand can truly differentiate itself.

Yet this adds complication – how do you have a meaningful and personalised engagement with every customer when one wants to use text, another WhatsApp and a third a phone call?

The rise and rise of CPaaS

To answer this challenge, companies are turning to Communications Platform as a Service or CPaaS. It represents the perfect way to automate and streamline customer interactions and keep things personal.

CPaaS is becoming so important that IDC predicts the CPaaS market will become a $17bn market by 2023. Much of that has to do with the ROI is delivers.

As a single platform covering all forms of communications, CPaaS makes it very easy to aggregate all the conversations a company is having with customers at any one time. This provides insights and reporting can be streamlined so functions across the business, such as CRM and product development teams, see a single view of the world.

This brings great value in terms of operational efficiencies, but also helps brands develop more meaningful interactions and gather the critical insight needed to develop new products, services and customer experiences. It is why more and more banks are investing in CPaaS. They know that they will not be able to compete on service if they do not. CCR