Onboarding banking customers is the critical first step in the customer lifecycle. It’s when banks have an opportunity to show prospective customers how digitally streamlined they are (or not), how instant and easy their processes are (or not). But as with all relationships, winning their hearts is only half the battle.
Once those customers have onboarded, banks are not in the safe zone quite yet. In fact, banks are never in the safe zone, as every interaction either confirms to customers that they made the right choice in joining the bank, or makes them doubt their initial decision.
Whether customers are transferring money, using their checking accounts, or requesting a stop payment, banks need to make sure everyday banking transactions are frictionless. Delivering a consistently great customer experience (CX) — and avoiding a negative one — is key to retaining your customers’ loyalty.
Customer experience in banking matters when it comes to everyday matters
Research shows that customer experience is far from a soft issue. Quite the opposite. According to a Medallia study, 80% of banking customers take some type of action after a negative experience with their bank. 35% tell family, friends, or colleagues, 30% complain to the bank itself, and 16% begin to use the bank’s services less frequently. Even more dramatically, a striking one in seven customers switch to a competitor.
Let that sink in: one is seven customers prefer to go through the hassle of switching banks then stay with a bank that provides less-than-stellar service. Even those that end up sticking with the bank still end up having a negative impact on it, as word will spread about the bank’s shortcomings.
Lightico’s own research confirmed similar issues in a survey of 1,000 American banking customers of top-tier institutions such as Bank of America, JP Morgan Chase, and U.S. Bank. Many of the CX frustrations were tied to choppy or absent digital journeys. For example, 56% of customers report having been directed to a physical branch during an online banking interaction. And 48% say they’ve been asked to print, sign, and email papers while conducting their online banking interaction. Banks are failing to provide a fully digital customer journey, and customers are at their wits’ end: A whopping 42% of them have considered switching banks due to a poor customer service experience.
One resident of Clearwater, Florida says of his experience with U.S. Bank, “They changed their fax machine without calling or emailing me to let us know to renew the policy at their new fax number. Several customer service reps…told me that they don’t call or email in situations like this. They sent two letters in the mail notifying me. I never received those letters.”
In today’s day and age, such a scenario is not just disrespectful or annoying –– it’s a violation of every expectation customers have for acceptable service.
What great CX looks like in banking
Great customer experience in banking is almost inseparable from digitalization. The most customer-oriented banks understand that customers’ insistence on a smooth digital journey is nonnegotiable. Even partial digitalization isn’t enough –– the bank must embed a seamless digital experience into all the common banking transactions.
Banks would do well to study these innovations and think about how to apply them to their own institutions. It’s the single best way for them to stay relevant as fintechs and neobanks gain ground. When customers have more options than ever before, maintaining their satisfaction is no longer a nice-to-have –– long after the onboarding period is over.