There’s no doubt that the society we live in today would not have been possible without banking and financial services. That said, technology is progressing at a rapid pace. The tech revolution has completely changed the game in terms of what customers expect as a given, and that has massive implications for the financial services industry. More and more, we see that established firms are finding it hard to keep up with fintech challengers in terms of Customer Experience Management. Jamie Dimon wrote about this at length in his annual letter to shareholders. To put it bluntly, Dimon states that banks need to adapt or die, because fintechs are increasingly eating their lunch.
There’s a wonderfully intuitive model from the world of product management that banks can look to in evaluating how they’re doing with CXM, called the Kano Model. The Kano Model principally states that in any market composed of competing products, only the ones that consistently delight customers (and the firms that produce them) will survive in the long term. This is according to a scale ranging from, on the low end, failing to meet expectations, and on the high end, exceeding them. In the middle you have neutral satisfaction, which is the bare minimum level of satisfaction customers must receive for a product to be viable in the short term.
As technology progresses, becoming more efficient and intuitive for customers to use, their baseline expectations evolve. That means that firms who deliver on baseline expectations today will be falling behind tomorrow. The reality is that many banks have found themselves in this unenviable position relative to their Fintech competitors. In order to get a leg up on the competition, banks need to strategically invest in new technology solutions that enhance their current technology ecosystems, rather than ripping everything out, root and stem.
Banks have so much to offer in terms of expertise, credibility, and established value that customers would be foolish to gloss over them in light of the next best thing. That said, there’s catching up to do. Effectively managing customer experiences means having the right tools to do the job, not in terms of yesterday’s or today’s expectations, but in terms of tomorrow’s. Banking CXM, going forward, will mean adopting technological solutions that enhance the customer experience by enhancing banks’ current capabilities.
CXM platforms are built to do just that, and the proof of their effectiveness speaks for itself. Improved customer retention, higher satisfaction and NPS scores and stronger lifetime customer revenue - all of these metrics indicate that when a bank wants to delight its customers and adapts to change, they’re able to capture a greater share of the customer and market than they would without a CXM platform. If you’d like to learn more, please get in touch below.