Customer Service Mistakes Financial Institutions Should Avoid



2020 has been a tumultuous year for financial institutions (FIs), from regional and national banks, to credit unions and commercial banks. But it has brought customer service back to the forefront of the business planning agenda for 2021 and beyond. When planning and prioritizing your initiatives, it’s important to avoid mistakes. Here are a few to consider.

1. No pandemic, no digital
When the pandemic hit us all in early 2020, many financial institutions had to close their branches or reduce their hours of operation due to lockdowns. Consumers – and many bank employees as well – have opted for contactless interactions (also known as digital) to avoid getting infected.

In a survey conducted by Dimensional Research, 80% of consumers said they had increased use of digital customer service since the start of the pandemic.

This megatrend has forced financial institutions to strengthen their digital customer service capabilities.

  • A BAI study found that more than 50% of consumers have increased the use of digital channels even for more complex transactions such as loan applications since the start of the pandemic and 87% will continue to do so after the pandemic.

The FIs will do well to remember this, as they launch customer engagement initiatives for 2021. As Forrester says, “this digital genius doesn’t come back in the bottle”. In fact, Forrester predicts that digital customer service interactions will increase by 40% in 2021. The answer? Keep pressing that digital accelerator pedal!

2. Application for this, application for this
Despite sustained evangelism by industry experts, many FIs still take a piecemeal approach to implementing customer service channels. Some of them rushed to add a chatbot to handle the COVID-related spike in customer service traffic, without making sure the chatbots are connected for context and continuity with other touchpoints. Others are deploying messaging silos.

While banks have offered channel choice to their customers, the silo syndrome will only get worse in 2021. For example:

Forrester predicts that companies will increase the number of customer service channels they deploy from 8 to 11 to encompass a wider range of asynchronous messaging channels, introducing more silos than ever before.

Having to repeat information between contact points remains one of the main problems in obtaining good customer service.

  • What customers want is a true omnichannel banking experience that will allow them to seamlessly switch between physical and digital channels – 60% of consumers surveyed in an Accenture study said so.

Take a unified hub approach to your customer service initiatives to break down silos.

3. We hire smart – no knowledge base needed
Connecting with customers is only the first step in customer service. In fact, it is better not to connect with customers than to connect and not offer the solution or the advice they are looking for.

  • 67% of consumers in a Forrester survey said customer service agents at banks gave inconsistent answers or didn’t know the answer.

As self-service systems become smarter (which also requires knowledge), agents receive more complex resolution or advice requests from customers. That’s why a rich knowledge management (KM) solution is vital.

Make sure the solution goes beyond just dumping raw content on the client, to include ease of finding answers and conversational guidance for both customer self-service and human-assisted service. Equally important is that the same knowledge base is leveraged across all customer touchpoints to ensure consistency and regulatory compliance, which is often not the case.

  • In the aforementioned Dimensional Research consumer survey, 44% of bank consumers complained that they got different responses from chatbots and human agents, which reduced confidence in the ability to service to clientele of institutions.

Once you’ve solved customer issues with insights, be sure to optimize your service operations and knowledge base with analytics!

4. Customer service is unique
Yes, many customer service interactions are ad hoc, but forward-looking financial institutions are starting to take advantage personalized, proactive and lifelong commitment with clients to help them achieve their financial goals and expand their share of the portfolio. A good example is our Virtual Financial Coach â„¢ a solution that helps banks, financial services and insurance companies deliver personalized wellness advice at scale and proactively motivate them to stay on track to their wellness through automated messaging over time.

5. Toolboxes are pretty good
Some vendors tick all of the boxes in the RFP response, but look under the shiny covers and you will find that you need to build capabilities from scratch with a toolkit! It takes time and resources you can’t afford as the pressure to accelerate digital transformation escalates. The answer? Look for solutions that deliver rich, out-of-the-box functionality and a rapid return on investment.

6. Business value is an asset
According to McKinsey, less than 15% of companies can quantify the impact of their digital initiatives. Beware of vendors who cannot measure the success of their deployment. And stay away from the big iron sellers who promise to solve world hunger in five years, while putting your wallet on a drastic weight loss plan!

Let’s take AI to illustrate this point: Gartner says it takes an average of four years for companies to get their AI solutions up and running, not to mention their ROI.

Ask: What is the supplier’s approach to digital value creation? What is the typical recovery time? What return on investment can they register? Can they provide customer success stories?

7. The answer is only technology
As you evaluate solutions, look for vendor partners with proven customer service expertise. Technology is clearly important but also best practices for rapid business value and successful deployment. You don’t want a solution partner to learn your way!

8. On par with usual suspects
Financial institutions often make the mistake of simply comparing their customer service operations to those of their industry peers. However, today’s digital consumer expects you to perform as well as digital customer experience leaders like Amazon and Uber to deliver smart and easy experiences.

  • In fact, only one financial institution ranked in the top 5% of 13 leaders in the Forrester CX Index 2020and direct-to-consumer digital banking fell slightly in 2020 compared to 2019.

Plan to match the digital giants in customer service before your peers!

2021 is a year of transition, and experts predict a return to normalcy only in the fourth quarter of the year. Taking a digital-centric approach, while avoiding the above mistakes, will put you in a strong position to retain and develop your customers in 2021 and beyond.


About Joan Ferguson

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