7 ways to achieve customer engagement in banking

Published September, 2017 |

Digital and connectivity Print

Customer engagement is one of the biggest challenges facing banks in today’s competitive, multichannel environment. Engaged customers are willing to interact and communicate with the bank and this often translates to owning multiple products, decreasing the risk that they will switch to new competitors.

Our most recent Global Consumer Banking Survey results frame the challenges for banks seeking to boost customer engagement and outline a way forward. Here are seven steps you can take to improve engagement.

1. Design customer journeys with engagement in mind

Are your customers getting what they want, through the channels they prefer? Put your customers’ objectives at the heart of your design process.

The survey shows that all channels remain relevant to some extent, making it difficult to create a highly customized experience, but there are demographic differences. For example, younger consumers place a higher value on the digital experience, while at the same time appreciating human assistance when seeking advice or taking up a new financial product.

When designing customer journeys:

  • Determine what goes where: You don’t have to make all your services and information available on every channel. The important thing is that customers can find what they need as they move between channels, whether they’re seeking information, requesting a service or completing a transaction.
  • Model cross-channel workflows: Design end-to-end experiences that work across channels. For instance, you may make information about certain types of loans or new mortgages available online, although customers can only purchase these products over the phone or in a branch.
  • Assess the gaps: Understand where you are losing customers’ interest in your current interactions.  For example, examine how your channels interact and how your specific product offerings and experiences measure up to industry benchmarks – including comparisons to FinTechs and other non-traditional players.

2. Transform the branch network

More than half the participants in the EY Global Banking Survey agree that being able to easily switch between different ways of interacting with a bank is important. 60%–100% say that they still use branches, but that doesn’t mean branches must be on every corner. There are a number of ways to optimize the role of branches:

  • Reduce the number of branches, and make them better: In future, there will be fewer traditional branches and more kiosks, smart ATMs and micro-branches. Branches will be re-positioned as the physical face of the digital channel, with “agile” branches designed to serve different “communities.”
  • Retrain staff: Branch teams are more likely to serve as “hosts,” providing customers with information, education and links to experts (such as private bankers and mortgage advisors) who may be based remotely, but can be contacted through video chat.
  • Embrace relationship-focused technologies: For example, consider using beacon technology, based on low-intensity Bluetooth connectivity. This can alert staff to the arrival of specific customers, who can be greeted personally and directed to their usual advisors or relationship managers.
  • Localize branches through the “four Cs”: Focusing on the integrated four Cs concept — company, customer, colleague and community — will help you build stronger, trust-based relationships with your customers.

3. Enhance your mobile channels

In the UK, traditional banks with branches and large customer bases have mobile banking adoption between 60% and 75%. The adoption of mobile banking will continue to grow rapidly: your mobile channels must deliver what your customers expect, with intuitive interfaces and a wide range of tools and features, and access to service and information must be robust.

4. Invest in analytics, digital marketing, real-time messaging and stronger content

Advanced analytics have revolutionized many parts of the banking industry and can do much to promote customer engagement. Technology now enables you to engage continually with customers through proactive messaging (for example, to help them avoid becoming overdrawn or to identify a saving opportunity), or by alerting them to a product that’s relevant to where they are and what they are doing at a precise moment.

Repackage the data you collect in ways that are meaningful to your customers. For instance, you can offer visualization tools that incorporate previous spending or saving data to help customers track their progress toward a savings goal such as a downpayment on a home. Interactive charts and graphics help consumers figure out the best way to balance competing goals (for example, saving more versus paying off debt). FinTechs and non-traditional players have excelled in this area, boosting engagement by demystifying intimidating topics, tricky decisions and difficult long-term goals. Engaging content is a foundation for strong customer engagement.

5. Recognize customers’ personal priorities

Nearly one in three survey respondents agree that “financial products and services are all the same, whichever company you buy them from”. One way to combat this apathy is to treat customers as individuals. These could range from helping with weekly budgeting to estimating the total cost of buying a property. You need to tailor and prioritize this content based on individual customer profiles, including their understanding of financial products and their financial goals. Likewise, the channels you use will depend on each customer’s digital savvy.

6. Maximise your data

The survey shows that customers are willing to share more data with banks in order to receive a better experience and products. At the same time, there are increasing concerns about the amount of personal data available online, and how secure it is. Some banks are starting to develop simple opt in/opt out processes on data categories, to demonstrate their commitment to customer data protection issues. This could become a real point of differentiation.

7. Measure engagement via composite, cross-channel KPIs

More banks today are seeking to evaluate the success of advisors, the efficiency of their branches and the quality of their mobile channels. Customer engagement, which links all of these areas, could become the omni-channel KPI that best reflects your success in satisfying customers.

Measuring a mix of traditional indicators, such as number and value of products, the number of interactions and inquiries across channels (including digital and mobile transactions) and levels of satisfaction, offers a well-rounded and multidimensional view of engagement. This could highlight areas where you could improve and identify specific ways in which customer engagement can lead to increased sales.

The bottom line: engagement is a two-way street

To drive customer engagement, you must become more engaging in terms of your products and promotions, but also in how you share information and demonstrate your understanding of customer needs. Your content must be timely, targeted and meaningful to customers as people – not just simply a vehicle for cross-selling and up-selling.

Engagement may not be easy, but it is the key to turning indifferent customers into advocates for your brand.

Original report: Defining the new drivers of customer engagement

Read more on technology disruption in financial services here.

Find out more about EY activity in banking and capital markets by visiting our sector page.