Banks Struggle to Meet Customer Expectations

Amid changing customer expectations, banks are having a hard time defining customer experience and meeting customer expectations around it, according to a BAI executive report.

"What customers want from their banks is evolving," wrote Terry Badger, managing editor of BAI, a research and consulting firm for the financial services industry. "While customers used to be satisfied with reliable, easy-to-use apps, they now want more of a relationship. They want to be treated like the regular at the corner cafe, where the staff knows them and how they take their coffee."

The report goes on to say that banks are challenged because the notion of personalized service conflicts with efficiency at scale. While customers want one-to-one service and tailor-made experiences, banks are still struggling to meet those desires.

More teamwork will be needed inside the banks, the report says, citing a study by Boston Consulting Group. The industry continues to struggle with human and technology silos by department or function, so gaining the full 360-degree customer view and having it available at all times in all channels is still problematic for many financial institutions.

The report cites artificial intelligence, specifically natural language processing, as a technology that could help financial institutions provide customized customer experiences at scale.

Some banks are much further along than others in delivering personalized experiences, and where they are on the continuum isn't based solely on size. Some small banks adopted the necessary technology very early, while some larger banks are still struggling to integrate technologies from mergers and acquisitions and are facing other challenges to deliver the experiences customers expect.

The path to digital conversion begins with personalized service, according to the report. Customer interactions are the most important moments in the overall customer experience for banking and for other service businesses, it says.

Branch visits have been declining for decades as people rely more on ATMs, online banking, electronic transfers, deposits, and checking, among other digital interactions, to handle most of their banking needs.

To meet customers' digital expectations, banks have invested heavily in mobile technologies, the report points out. Early on, customers welcomed mobile banking and readily adopted it. However, mobile banking adoption has slowed down, because too often it doesn't deliver the personalized experience that customers want.

Customers want tailor-made experiences in their moment of need, which many banks are still struggling to deliver.

While digital self-service has become increasingly important, some customers still rely on the human channel for certain needs. Banks are also struggling to find the right balance between human and digital channels to provide the personalized experiences that customers expect.

Though younger customers tend to prefer digital interactions and older customers will skew toward the branches, the split isn't as well defined as it once was, according to the report. So it is essential for banks to offer excellent digital, call center, and branch interactions to satisfy customer experience expectations.

"Customers want products and features that serve them exceptionally well, [meaning] convenience, affordability, and a unique tech experience," the report concludes.