We can’t stress the importance of customer experience enough in today’s world. Not only have consumer needs multiplied—they’ve also gotten more urgent. If banks and credit unions want to stay relevant, they’ll need to step up their CX game.
Speaking of which…
Notice that 200% spike in new mobile banking registrations? Or how about the 85% increase in mobile banking traffic? Of course you have. It’s the reason why so many financial institutions are fast-tracking their digital transformation initiatives. If you want to be there for your customers nowadays, you need to start thinking mobile first. That’s where your customers are today and where they’ll probably remain long after the pandemic.
In this piece, we’re going to look at how consumer needs have changed, and what you can do to meet them.
Customers need your help
Saying we live in uncertain times has become a bit of a cliche. But it’s true. Despite what experts and analysts might say, nobody knows what the future holds.
Case and point, half your customers are concerned about their job security right now. We’ve already seen the impact COVID-19 has had on travel and hospitality. Also, it certainly hasn’t made life any easier on people who were struggling pre-pandemic.
To understand the scope of the problem, consider this: in 2018, 39 percent of US households said they couldn’t cover an unplanned $400 expense. As of today, 74% of workers in the United States say they’re living paycheck to paycheck.
So, the struggle is very real, and it’s not just limited to financial wellbeing, either. The current crisis is also threatening your customers’ mental and physical wellness. Which is why you need to be empowered to provide specialized assistance to your most vulnerable segments, including:
- People who’ve contracted COVID-19 and don’t have insurance coverage
- Those who’ve lost their jobs and have low funds, existing debt, or both
- Individuals who were unemployed and financially struggling before the outbreak
- Older people who live in a residence, require daily assistance, or both
So, being able to quickly leverage internal datasets and fine tune your outreach to serve these individuals is key.
Until now, most banks have marketed products using broad demographic segmentation. But customers are increasingly expecting individualized offerings, and leaders will need to use data to fine-tune their customer, product and pricing strategy to deliver on those expectations.
How you can make a difference
Implementing debt-relief programs was a great first step, but there’s still plenty you can do to help your customers out. Below, we’ll take a look at three tactics you can implement right now.
Start digital onboarding
47% of customers almost never use their bank’s mobile app. By encouraging digital adoption, you can change that. You can also take pressure off your frontline staff and ensure operational continuity.
53% of financial institutions don’t currently offer a digital onboarding program. Of those that do, 47% rely on traditional channels to get the word out. Deploying digital onboarding tutorials and self-help tools is critical. It’s a point of differentiation and with an ROI of up to 20:1, it’s definitely worth it.
Meanwhile, banks should consider expanding their digital services. But first you’ll need to audit your existing capabilities. Once you’ve done that, start identifying future areas of improvement.
Improve your segmentation strategy
Segmentation is critical to managing your risk portfolio. Among other things, your segmentation strategy should prevent the erosion of creditworthiness, reduce delinquencies, and curb accounts from going to collections.
To do this, you need to be able to quickly segment your customers. That way, you can connect individuals with products and services that protect their financial wellbeing. Improving segmentation will have a positive impact on your ability to serve vulnerable customers and de-risk your portfolios.
Empower your teams
Digital marketers
Historically, digital marketing teams have been responsible for increasing sales by connecting the right products and services to the right customers. Today, the end goal’s different. Instead of driving sales, digital marketers are going to have to focus on risk mitigation. That means providing solutions that protect customer financial wellness. They’ll also have to create digital onboarding campaigns that relieve frontline staff and empower customers with self-service options.
Data science
Data teams will need to support digital marketing by enabling new segmentation capabilities. Some of the fundamental data required for identifying vulnerable segments includes: product, risk score, credit score, age, city, employment, debt level, and cash reserves. Being able to execute a comprehensive segmentation strategy will determine whether banks can mitigate risk and prioritize customers.
IT
Finally, IT teams will need to re-prioritize their pipeline and focus on business continuity. That means finalizing near-complete projects and deferring those that aren’t critical to operational continuity. New mission-critical projects include: helping employees work remotely, implementing tighter cybersecurity measures, rerouting calls to the COVID response team, and managing higher customer demand via digital.
By driving digital adoption, improving your ability to personalize, and enabling your teams to work more effectively in this new economy, you can deliver the CX your customers deserve.
If you want to learn more about how banks are adapting to the current crisis, feel free to check out our eBook: How personalization is helping banks navigate COVID-19.
