FEATURE17 November 2014

Money talks


Perceptions of the financial services industry are still overwhelmingly negative. Some may say that this doesn’t matter as long as consumers trust and believe in the organisations that serve them. However, this is the backdrop against which consumers have to make decisions, and it certainly does not make the process any easier.

Decision making within financial services can be a minefield for the everyday consumer – sometimes it must seem as though we are talking a different language. On top of this, the adoption of technology means that customer journeys are becoming increasing disjointed and complex, with consumers sometimes ending up purchasing products that they do not always fully understand and perhaps don’t even need.

With this in mind, how can financial brands gain a deeper understanding of the journey from a consumer perspective, not only to the point of purchase but also at key moments of truth – whether that is making a claim, pension vesting or taking out a secured loan – and drive the findings to the heart of the organisation?

Customer surveys have proliferated… What has been the impact?

Given the proliferation of customer satisfaction and voice of the customer surveys that measure the ins and outs of every interaction, how is the industry performing? Despite initial gains, the last three waves of the Institute of Customer Service UKCSI survey has shown continuous decline within Insurance, and Banking is starting to plateau.

Although there are a number of factors that could contribute to this, including increasing expectations and a shift in focus to new customers as the economy recovers, this raises a number of questions about the survey work that is being undertaken.

These include:

  • Are we measuring the right things?
  • Are we asking the right questions?
  • Are we talking to the right people?
  • Are we going into enough depth?
  • Are we making enough use of the data?
  • What about those customers that are not having any direct interaction?

Moving a company’s score is difficult enough; to move a sector takes the difficulty to another stratosphere. Whatever approach firms adopt to track the customer journey, the data collected will never be perfect and there will always be gaps. Companies need to understand the limitations, live with them, and make improvements to the services they provide.

A tale of two banks on different paths

The Harris Interactive Customer Power: Banking survey identified that some companies are investing and making serious improvements, such as Santander. On the other hand, many are standing still, and others are going backwards, such as the Co-operative. Within the recent past, Santander has successfully launched the 123 account which is deemed to reward customers for their loyalty. They have also focused on service quality, particularly for online and mobile banking.

The bank that some had dubbed “Britain’s worst” was suffering while they integrated the likes of the Abbey and Alliance and Leicester, but they managed to turn things around. The Customer Power scores prove it, with a relationship score of just 43% in January 2012 and 41% in July 2012, rising to 59% today.

Since its conception, some 2.7m people have opened a 123 account and according to the latest switching figures, 25% of people moving bank accounts are en route to Santander. More than 200,000 UK current account holders have switched to Santander since the launch of the Current Account Switching Service in September 2013.

This change has also been led from the top, with Santander boss Ana Botin telling BBC Breakfast that she wants to rebuild trust and retain loyal customers, with trust being the essence of banking. She has set the goal to reach four million loyal customers by 2015. They are certainly on the right path.

In contrast, the Co-operative has suffered an annus horribilis as it pushed for growth and suffered due to the misdemeanours of its chairman. The public nature of its difficulties impacted on the relationship it has with its customers, with a significant fall in its score. The customer experience is not just about the service provided, it is also about how well a brand lives up to its promises.

Could omnichannel bring emotional benefits?

The sector must also take into account the changing nature of customer interactions, as the push to self service is deemed mutually beneficial and omnichannel has become more of a reality as consumers want quicker access to products and services, as well as the ability to self-serve at a time convenient to them.

However, as we continue to strive for greater shareholder value, efficiencies and profit, we must not lose sight of what matters most and what should be at the heart of every company – the customer.

Phil Brooks is research director, Financial Services at Harris Interactive. He will be speaking on this topic at the MRS Financial Services Research event in London on Thursday, November 20 2014.