Customer Experience Management: Role and applications in the banking industry

The banking industry in the UK is witnessing a rapid change in customer behavior for both, individuals and business segments driven by digital penetration and adoption. Driven by this, banks are increasingly beginning to examine the quality of customer relationships along their entire lifecycle. The objective is to systematically understand and improve the critical drivers of customer experience, thereby driving topline growth, and effectively channelizing servicing costs. In our experience, some of the most effective customer experience management programs address the following key questions:

How can the bank better understand customer needs, for different segments? How can they match diverse customer needs with the optimum offers, service levels and

delivery channels? How to leverage customer experience analytics to maximize the business growth when servicing

a given market segment? How to effectively manage the different customers segments across all their life-cycle stages?

In an environment where revenue growth is increasingly becoming more competitive, the simple math that more customers imply more revenue is difficult to refute. It is therefore evident that what separates leading banks from the rest of the pack is their ability of growing their customer base effectively. The objective of growing your customer base comprises of two closely linked activities – retaining existing customers and finding new customers. A well-integrated customer experience management program paves the way for synthesizing these two activities. It harnesses the power of existing customers – motivating them to increasing the share of wallet and getting them to recommend your brand.

A comprehensive customer experience management program starts by conducting a thorough customer segmentation, to help ascertain the relative share of each segment and identify potential quick wins. Subsequently, a detailed customer journey map is developed for each segment, preferably at a product family level to help identify the different touch-points that impact a customer’s decision making. This is followed by creating a range of metrics that can gauge the quality of the experience, through a mix of transactional data (contact center logs, type of service requests and internet banking usage web-data etc.) and customer survey data.

To ensure a robust measurement of customer experience along the complete life-cycle, we typically recommend a 3600 survey framework. This framework helps banks to measure the customer experience along their complete relationship journey. Such measurement data helps operations teams to streamline servicing and onboarding processes, aligned by the needs of different customer segments. A typical framework consists of comprises of one relationship health measurement track, coupled with smaller, touch point centric surveys. Like contact center experience, complaint resolution experience, on-boarding experience etc.

With the measurement data in place, the next critical driver for a CEM program’s success rests on assigning adequate ownership to business leaders. While robust customer experience analytics can help identify key service and product gaps, designing corresponding improvement plans and monitoring their success and impact requires creating a strong governance structure.

Following is a summary of some industry best practices that banks are institutionalizing in their journey towards building a best-in-class customer experience management program.

Leadership commitmentI. Ensure a C-level project sponsor for the loyalty program

II. Key metrics reported to the boardIII. Key metrics included in annual company reports

Governance structure & Organizational alignmentI. Create a customer experience work-group of operational representatives and a touch-

point owner that establishes owns and drives customer centric processes. This also helps in operationalizing the program across organizational boundaries

II. Design a governance structure that assigns clear responsibilities and details the success measures for the program as well as outlines the escalation mechanisms

Analytics and Insight Dashboards I. Develop a comprehensive reporting dashboard that visualizes the performance of the

bank on key customer experience metrics and then shows the drill down comparison between different segments and regions. Increasingly, banks are investing in building their CEx Analytics and Insight dashboards on cloud based platforms. This helps easy distribution of analysis outcomes within the organization and provides senior stakeholders a real-time visibility into the bank’s customer experience performance

II. Design a CEx Calendar that captures the time that input data from all sources would be received and assigns owners for each data source. Based on the data input timelines, the Customer Experience Insights reporting schedule should also be published. Best in class banks go a step ahead and publish a detailed ‘Insights Reporting Structure’ that maps out which insights different operational teams and role levels would receive

III. Use of advanced analysis methods to help drive tangible business growth objectives like Value driver model to simulate the impact of service level changes in different

attributes to the overall customer experience score Product propensity scores to drive focused cross-sell and upsell Churn models to predict customers at risk of attrition and drive mitigation

strategies

Close loop action planning mechanismI. Assign process owners for all customer touch-points, aligned to the servicing,

relationship management and account opening team structure. Process owners to be responsible for tracking and reporting the improvement status, based on the customer insights

II. Prioritize improvement projects and ascertain their impact on improving the customer experience metrics. An analytics driven decision making approach helps prioritize improvement opportunities by targeting touch-points that have a high impact on the overall customer experience.