Lobue News: Jun 01, 2015

How FIs Are Moving Swiftly to Optimize their Customer Experience

Easy Journey or Rugged Climb?

It’s never been tougher to be a CEO at a financial institution (FI).

Customers use the internet to scout the best deals, and they’re quick to share service failures via social media. Emerging markets hold enormous growth potential but require that FIs push beyond simple segmentation to address population diversity with mass-customization. And the price tag for regulatory compliance, information protection, and online product and service delivery keeps increasing each year.

It’s never been a more exciting time to be a CEO at an FI.

Companies have a significant opportunity to differentiate from competitors by providing a consistent, exceptional customer experience. In survey after survey, customers cite the quality of interactions as critical to their decision to engage with an FI or expand the relationship. Some 32,000 global retail banking users surveyed by Ernst & Young said the customer experience was the number-one reason they either opened an account or service with an FI (41%) or closed one (33%).ⁱⁱ ⁱ Those that stayed, however, weren’t necessarily doing so out of loyalty: about one in five of respondents with no plans to change stated either that all FIs were the same or that making a change was simply too difficult or time-consuming. ⁱⁱ ⁱ ⁱ

If your FI is marketing a superior customer experience, are you walking the talk? If not, it’s time to fix what’s broken.

It’s about the ROI.

The question is  where to start? Not all changes add equal value, and the wrong investments can be a costly distraction at a time when both budgets and margins are under pressure.

The LoBue Group has worked extensively with FIs around the world to transform their services and increase their operational effectiveness. Our experience, which spans 30 years, 45 countries, and more than 400 customer engagements, has given us deep insight into the customer experience across multiple financial sectors. In this executive article, we offer a roadmap for optimizing the customer experience and we share the results achieved by real clients who have embarked on this journey, from a retail bank in the Middle East to an insurer in the U.S. and a commercial bank in Asia.

Start with the strategy.

Some 56% of all companies haven’t elevated the organizational focus on the customer experience to the enterprise level. ⁱⁱⁱ  That means customer experience optimization (CxO) is typically handled as a series of interlocking technical initiatives to improve service quality. It also means that results can be disparate and inconsistent across the business. To become best in class, FIs need to align CxO goals and initiatives with the business strategy.   

Be 100% committed.

The CEO needs to serve as the champion of the transformation initiative, setting overall priorities and working with customer engagement teams to drive change. The CEO’s support must remain unwavering throughout the initiative to make sure that the FI achieves the desired results and maintains the new processes.

Dig into the data.

Many FIs operate dozens of different technology systems but have difficulty aggregating information and driving to insights. Internal IT teams must develop a customer experience dashboard so that FI leaders and CxO experts can evaluate it for signs of health or trouble every day.

Stand in your customer’s shoes.

Map the customer journey across all key touch points, understanding how your retail and business buyers interact with your FI from the moment they begin online research, through the process of evaluating products, setting up accounts, interacting with service staff, and troubleshooting problems. It won’t be a smooth road start to finish. It will likely be a rugged, uphill climb at pivotal moments.

Identify the golden nexus of process improvement.

At this point, the CxO team will have the information they need to establish a baseline and target experience that matter to the customer. Where do effort and ROI meet? The CxO roadmap identifies existing barriers to great customer experiences and shapes the organizational transformation with a customer-centric focus that embeds the optimal customer journeys right into the operating model. While there will be multiple opportunities to transform processes, not all initiatives will yield the same results. By choosing to fix the right things that impact customer experience, CEOs, and their teams can perform alchemy – turning tarnished, broken processes into opportunities for driving ROI and creating the employee engagement needed to sustain them.  Non-CxO gains, such as reduction in FTE and fixing non-customer facing processes are value-added benefits to the initiative.

So what does this look like in practice?

Turnabout: A top Regional Retail Bank improves customer satisfaction by 56% with a service delivery redesign while rightsizing organizational staffing in the process.

One of largest retail banks in this region knew it needed to act when its new Head of Retail Banking visited a key branch and noted the excessive customer wait times. It was clear that customer service levels had deteriorated to unacceptable levels. A major part of the problem was the bank’s preoccupation with internal processes that weakened its focus on customers.

The LoBue Group helped the bank walk through the roadmap outlined above and then implement a CxO program using thorough analysis, customer surveys, and employee focus groups to trace key touch points across the service delivery spectrum.  As a result of this process, we helped the FI:

  • Refocus the experience – Since the goal was to delight customers, we took a hard look at how they perceived their interactions with the FI. We helped our partner eliminate overlapping functions and activities; reduce excessive reviews and approvals; rationalize hiring and training practices; optimize employee productivity, and modify product offerings, adding value wherever possible.
  • Improve response time – With a process redesign, we were able to reduce the account initiation process from five approvals to one, reducing time to service from 17 minutes to just three. And after reviewing the average dollar value of ATM customer complaints we instituted a dollar threshold for immediate refunds. By eliminating long turnaround times, this change reduced complaints by 28% while significantly reducing employee time spent on non-value-added activities.
  • Consolidate functions – We worked  to remove all operations functions in the branch network, consolidating functions into a shared services division. This action eliminated redundancies while reducing operating costs by 18%

As a result of these and other process improvements instigated through the CxO initiative, the bank was also able to size the organizational staffing right. . We identified 820 positions from key functions and branches that created excess capacity. The bank was able to focus this staff on areas of growth and drive productivity while reducing hiring needs.

A C-suite imperative: Strengthen the customer experience now to gain market share.

FI CEOs realize that strengthening the customer experience provides them with game-changing advantage.   FI’s ensure happy and loyal customers, driving higher retention rates and optimizing the profitability of every customer relationship through positive interactions. CxO pain points are similar around the world, but the path to success will be different for every FI. What’s critical is to team with an experienced partner who can offer a proven methodology, roadmap, and hands-on expertise to deliver the right results.

If you’d like to optimize your customer experience, we can help.  Contact The LoBue Group today to learn about our no-cost assessment, which provides you with a rapid deep dive on your pain points and service delivery issues.  

For more information you can contact us at http://www.lobue.com/contact.

You can review more success stories at http://www.lobue.com/stories/form.    

ⁱ “Winning through Customer Experience,” EY Global Consumer Banking Survey 2014, 9. http://www.ey.com/GL/en/Industries/Financial-Services/Banking---Capital-Markets/Global-consumer-banking-survey-2014.

ⁱⁱ ⁱ  Ibid, 4.

ⁱⁱⁱ ⁱ ⁱ Lessons from the Leading Edge of Customer Management, Harvard Business Analytic Services/SAS Institute, 8. http://www.sas.com/content/dam/SAS/en_us/doc/whitepaper2/hbr-leading-edge-customer-experience-mgmt-107061.pdf.