Last month, I attended the CX NXT BFSI Summit at the Leonardo Royal Hotel by Tower Bridge in London. The inaugural event, showcasing the latest developments in customer experience (CX) across Banking, Financial Services, and Insurance (BFSI), provided great insights and stimulated conversation on the key challenges and opportunities being currently seen across the market.
From all the speeches I listened to and the conversations I took part in, one core theme came up more than any other: human centricity.
Over the course of the day, attendees were provided with intriguing panel discussions and fascinating keynote speeches. In this blog, I’ll explore some of the major topics discussed at the first CX NXT BFSI Summit, mapping out the future of CX in banking, and exploring the actions that industry participants need to take now in order to generate greater revenue, improve the efficiency of operations, lower costs to serve and drive customer retention.
The state of CX for banks today
As the banking industry continues to move away from face-to-face interactions and more toward omnichannel platforms, the need to stay attentive to each and every customer should remain a top priority for banks. In this way, CX must always play a key role in any bank’s strategy, and this principle was certainly reflected at the conference this year.
Across Banking and Financial Services, we need to take other lessons from other industry on board, particularly when it comes to CX. New and emerging technology will play a key role in this over the coming years, for example, the capabilities of Apple’s new VR headset, the Vision Pro, could revolutionise the way banking interactions are conducted. Those customers who long for traditional meetings with branch staff and managers could be satisfied without the need for an in-person discussion. Taking inspiration from new and emerging trends such as these is key, but in order for the experience of the customer to be improved, the human must always be placed at the centre of things.
Why human-centricity is key
In a recent keynote speech, Forrester analyst Martin Gill explored the concept of “customer obsession”. The organisations that Forrester had defined as “customer-obsessed” had over two times higher customer retention and nearly two times higher growth compared to others. On top of that, Gill emphasised that these organisations operate differently, with 95 per cent of their leaders describing their firms as “empathetic”. Gill’s perspective tells us two things about customer experience:
- It encourages customer retention and growth
- It requires an empathetic culture
With both of these factors in mind, I kept a keen eye to see how Gill’s view was reflected at this year’s CX-BFSI Summit. In light of this, a panel discussion of particular note examined taking a customer-centric approach to building the bank of the future. Part of this discussion touched on how to select the right technology when implementing digital transformation. My takeaway from this point was that the most important element to consider is how that technology will improve the experience of the customer, but technology alone is not the whole answer. Moving forward, Service Design and journey mapping is key for transformation programmes in the banking space. The task at hand, therefore, is for banks to align how they are transforming their internal operations with the changes they make to CX.
Later on in the day, I listened to a captivating debate on whether banking needed more customer experience or product innovation. A key consideration here is that it is much easier to demonstrate return on investment (ROI) with innovation and new products, than it is with CX. Forrester research reveals that 54 per cent of companies cannot prove ROI in CX initiatives.
To present a strong enough argument against purely investing in product innovation, teams can use four key aspects identified by Forrester to calculate what they term “customer lifetime value”:
- Revenue: Increasing revenue through marketing metrics such as conversion, purchases, and propensity, as well as CX metrics like successful outcomes, completed journeys, and goal achievement
- Survival: Improving customer retention with marketing metrics such as retention, churn, and repeat purchases, along with CX metrics like customer satisfaction, Net Promoter Score (NPS), confidence, and advocacy
- Servicing costs: Reducing costs associated with servicing customers, considering marketing metrics such as loyalty tiers, engagement scoring, and operational efficiency, as well as CX metrics like ease of effort, complaint feedback, and collaboration with operational teams
- Acquisition costs: Managing acquisition costs, which account for one-third of the total cost, by considering marketing metrics such as ad spend, attribution, ratings and reviews, referrals, and CX metrics like onboarding steps, time sequences, friction, and unnecessary costs.
What these aspects show is that whilst the value of CX in Banking is clear in theory, actually demonstrating this with hard metrics is more difficult in reality. In order to draw value from CX in the two ways identified by Gill above, organisations must also be prepared to demonstrate the ROI of CX.
Our work in CX
Attending events such as this one is always a privilege, and I relish any opportunity to discuss the latest trends and developments in the industry. Banking, Financial Services, and Insurance must continually evolve to do better for its customers, and coming together to share our thoughts is exactly how we do that. I’m excited to see what next year’s summit has in store!
At NTT DATA, we deliver customer experiences that drive employee engagement, boost customer loyalty, and grow long-term profitability. If you’d like to discuss how we can support you with your CX strategy, take a moment to get in touch and arrange a 45-minute consultation.