by Michelle Huff, Chief Marketing Officer at UserTesting
What differentiates a great bank from the good ones? Is it offering better products? Keeping low fees? Providing loans at lower interest rates? Or giving higher returns on fixed deposits?
While these are factors that influence a customer’s decision while choosing a bank, empathy is what makes them stay. Banking with empathy ensures that banks understand and respond appropriately to the emotional state of their customers.
At present, banks should balance two imperatives: first, becoming more empathetic, and second, becoming more digital. Accenture’s consumer study confirmed that banking customers depend more on digital channels, which could weaken personal connections with their banks.
Therefore, it’s important to prioritize strengthening the customer-bank relationship in the digital world. Banks that understand this, outperform their peers.
Empathizing with customers means getting direct feedback from them; gathering insights into what “good customer experience” means to them, and then building the experiences that meet those needs.
Since both CX and empathy are highly correlated, it’s important for digital banks to lead with empathy and make their customers feel valued.
Listed below are five practical suggestions on how to use empathy to provide better CX and gain retention in the digital banking space.
Empathy further helps financial institutions break down communication barriers, deal with the impact of the digital divide on senior citizens, understand customer pain points, and provide guidance on how to “humanize” digital banking.
Focus on Customer Personalization
To understand the unique needs of each customer, it’s important to empathize with them. Once these needs are identified, banks need to get clarity on how to personalize solutions to fit their customers’ needs.
“True Personalization” can be achieved by making their services and products more accessible to all users, regardless of age or digital literacy. Banks can achieve hyper-personalization by leveraging a combination of predictive analytics, AI, and machine learning.
The aim is to monitor individual customers’ real-time usage data, such as which phrases they commonly search, what content they like to view, their geographic location, and so on.
With this information, banks can create more targeted, one-to-one marketing campaigns and offers. A bank’s ability to customize everything, from its distribution channel to its tone of voice, to the customer’s financial need and emotional disposition goes a long way in retaining loyal customers.
Transparency is key
With the rise of digital banking, customers increasingly feel disconnected from their banks.
As per the research from KPMG, 86% of consumers say that data privacy is a growing concern for them and about 40% don’t trust companies to ethically use their data.
To prevent distrust in the financial customer experience, banks need to make every effort to be transparent with their customers about how they process, use, and secure personal data.
Being transparent about fees and interest rate charges, publishing company values and constantly communicating with customers is how banks can build trust.
Furthermore, being open and honest about bank data policies and practices is the best way to show goodwill.
Go the extra mile for senior customers
Singapore is aging as fast as we are going digital. By 2030, one in four citizens will be 65 years and over. Therefore, it’s important to design banking experiences that are easy for seniors to navigate.
Banks like POSB (a subsidiary of DBS Bank) have introduced digital ambassador roles at branches to provide guidance on navigating digital-enabled services. To sustain the momentum of digital adoption, financial institutions need to focus on the retention of senior customers.
An excellent way to boost retention is by identifying how they interact with branch managers and the most common services they seek. It can give banks guidance on how an app might better meet their needs and help their team design the app to be more senior-centric.
Financial institutions and the government must work together to keep seniors at pace with increasing digitization.
Understand customer pain points
Financial institutions should provide cohesive, less complicated customer banking journeys.
This will ensure that customers know what they’re doing, what’s next and where to quickly find help.
The first step to understanding customer pain points is to map out the customer banking journey. It can be achieved by navigating through questions such as–What are the tasks and stages within the journeys? Where are the visibility gaps? Where are the drop-off points where information leaves your banking journey?
The second step is to provide customers with a feedback outlet through which they can share their thoughts and opinions about a bank’s current CX, the pain points they’re experiencing, and suggestions for improvement.
Before seeking out a solution, institutions should first empathize with their customers to diagnose where the problems/pain points occur within the customer banking journey.
Balance self-service with human interaction
Although automation is a leading banking trend for 2023, there’s still something to be said about the value of human interaction. If banks want to thrive in the digital space, they must focus on “humanizing” the digital banking experience.
An increasing number of banks offer a mix of AI and live support for customer service. Some banks have taken this concept a step further. They experiment with different methods to make their chatbots and other AI services feel more human.
Some great examples of “humanizing” digital are—giving chatbots personalities, using customized conversation openings, and leveraging sentiment analysis to detect emotion and respond appropriately. The key takeaway here is that banks must provide customers with the personal touch they crave.
There’s a need for financial institutions to understand how empathy influences customer loyalty. Banks must realize that it enables them to convert their efforts into memorable customer experiences.
Empathy is the ultimate form of customer insight and should be at the core of digital banking.