One size doesn’t fit all: why banks should tailor their data-driven customer experience

Published May, 2017 |

Banking and capital markets Print

European customers are increasingly looking beyond traditional providers for their banking needs, driven by raised expectations from the consumer-focused world of e-commerce. The rise of FinTechs can be partly attributed to strong focus on customer experience and the ability to leverage customer data to build strong brand loyalty. The 2016 EY Global Consumer Banking Survey shows that four of the top five reasons that banking customers consider switching to a nonbank provider relate to customer experience. The insights we gleaned from the survey’s findings (based on interviews with more than 55,000 customers in 32 countries) challenge commonly held assumptions that all customers are migrating to digital channels, or that there is a direct correlation between financial acumen and digital aptitude.

Based on this data, we’ve devised a “maturity matrix” that gives you a new way to view the characteristics of your customer base (see Figure 1). The matrix provides a profile blueprint for customer analytics, and could help you to optimize customer experiences.

Figure 1: EY customer banking maturity matrix

Focus on individual customer needs

This matrix, in conjunction with the current data, can help you to understand how much your customers vary in terms of financial and digital maturity. For example, only 16% of our global survey sample consider themselves to be both digitally and financially savvy. These are the “Pros,” and they comprise the customer group whose expectations are developing at the fastest rate. They are ideally placed to make the best use of digital banking services, but they’re also open to buying financial products and services from nonfinancial companies.

By way of contrast, more than twice as many customers (37%) are digitally savvy but less confident in their own financial capabilities. They are the “Digital Stars.” They are a poorly serviced customer group because, although they want to interact with their bank via digital channels, they need better advice and more hand-holding than is currently available in the marketplace.

Another large contingent of customers, the “Traditionalists” (36%), consider themselves neither digitally nor financially savvy. All in all, nearly half of all customers (47%) are not confident users of digital technology, and considerably more (73%) report low levels of financial knowledge. Only 11% of respondents can be categorized as “Financial Stars,” with high levels of confidence in this area despite a lack of digital savvy.

The proportion of customers who are digitally savvy is likely to increase organically in line with general societal trends, but increasing financial confidence will need more direct intervention. There is a huge opportunity for you to engage these customers by supporting them to become more financially savvy and turning them into “Pros.”

Maintain human-to-human interaction

The diversity of customer behavior illustrated by the matrix shows the complexity of the customer experience challenge. Unlike FinTechs — whose customers are digitally savvy by definition — you need to maintain the ability to deliver human interactions. Furthermore, the majority of digitally savvy consumers still like to speak to an advisor on particular occasions (see Figure 2). While 65% of customers think it is highly important for a bank to have a digital presence, 60% also believe that a physical presence matters.

Figure 2: Customer engagement - the need for multiple touchpoints

In other words, you need to offer customers multiple touchpoints — and it seems likely that this will remain true in the future. This is costly, and will add to the complexity of your data management and customer experience design, but aligning customer experiences to contemporary data analytics will pay off in loyalty.

Use data to spot opportunities

When it comes to creating an engaging customer experience, one size doesn’t fit all. You need to serve all your customers, and be sensitive to their differing levels of comfort with managing finances and using technology. Robust data-gathering will keep these insights current and useful. In the current environment, the diversity of customer profiles also creates an opportunity to engage customers by helping them to develop their digital and financial abilities in parallel. By leveraging data to deliver proactive experiences to customers, you will be able to position yourself at the center of their lives.