As the digital era unfolds, banking and financial customer journeys have grown increasingly, and unnecessarily intricate, often characterized by persistent inefficiencies.
The need to print and send countless documents; convoluted identity verification processes; or the requirement to physically sign forms, to take just three examples.
Beyond telecoms and across industries (including energy, utilities and alternative network services), customers face the unsettling phenomenon known as ‘bill shock.’ This worrying experience can not only impact their financial wellbeing, but also shakes their trust in the institutions they rely on - financial services included.
In this article, we present banking institutions with practical guidance and effective strategies to empower customers and stave off bill shock. Innovative CX solutions that prioritize transparency, trust, and seamless journeys can help your customers navigate the challenges of bill shock and pave the way for smoother, more satisfying experiences that inspire loyalty and longer life cycles.
Understanding Bill Shock
Bill shock refers to the unwelcome surprise customers experience upon receiving unexpectedly high bills or fees from their service providers.
This phenomenon can arise across various industries, including energy, mobile network services, telecommunications, and even banking, where customers are caught off guard by hidden charges, unforeseen fluctuations in prices, or complex pricing structures.
Bill shock can profoundly impact the overall customer experience (CX), leading to a loss of trust and potential customer churn.
Bill shock can often be attributed to several contributing factors. Common causes include fluctuating energy prices, unpredictable data usage, hidden fees, and unclear billing structures.
In the world of financial services, it may stem from unexpected transaction charges, currency conversion fees, or complex payment processes. These underlying issues often lead to customer dissatisfaction and create the potential for damaged relationships.
For the customer, there is the obvious unexpected loss of capital, of course – but the impact of bill shock extends far beyond the mere financial implications.
Customers who experience bill shock are more likely to have their CX severely damaged, eroding their trust in your financial institution.
Disgruntled customers may vent their frustration on social media or via word-of-mouth, further affecting your reputation. Additionally, bill shock can result in reduced customer retention rates, as clients seek alternatives with more transparent and predictable billing practices.
The following examples demonstrate potential scenarios where bill shock can adversely impact CX, and underscore the importance of implementing strategies to mitigate this issue:
- A banking customer performs an overseas transaction, only to be surprised by the currency conversion fees and intermediary bank charges that significantly inflate the final cost.
- A utility company customer, unaware of an approaching energy price hike, receives an annual bill far higher than expected, causing financial strain and dissatisfaction.
- A subscription service customer’s promotional period elapses, leading to an unexpectedly hefty bill at the end of the month.
For your customers, financial visibility is a significant weapon in the battle against bill shock. By empowering customers with clear and personalized insights into their financial activities, financial institutions can proactively prevent unpleasant surprises.
Personalized billing notifications, usage reports, and real-time transaction alerts are some of the ways to boost customer visibility. Leveraging advanced technology and automation as enablers, financial services can seamlessly deliver this crucial customer information.
When customers have full visibility into their finances, they can make informed decisions, avoid unnecessary fees, and maintain control over their spending.
Beyond visibility into the data, clear and honest communication lies at the core of mitigating bill shock and fostering customer loyalty.
Customer-centricity means putting customers first; and that means being open, prompt and clear about pricing, fees, and potential costs. Proactivity can work wonders here; even if your organization isn’t itself about to hit customers with a big bill, you might look into ways to notify them of larger-than-usual outgoings, or inflated subscriptions, for instance.
Financial institutions that prioritize customer-centricity build trust through transparency and, by providing customers with a human-first experience – where questions are welcomed and concerns are addressed promptly – you can create a strong foundation for a long-lasting relationship.
When it comes to personal finance, knowledge is power, and financial literacy can make all the difference. Financial institutions can play a pivotal role in empowering their customers by providing educational resources and guidance.
Here's are just some resources that can enhance your customer experience and journey:
- Budgeting Basics: Educate customers on creating and managing budgets to achieve their financial goals, and provide tech that helps them do so.
- Understanding Credit: Enlighten customers on credit scores, credit reports, and how to build or repair credit.
- Investment Insights: Offer guidance on investment options, risk tolerance, and long-term financial planning.
- Debt Management: Provide strategies for responsible borrowing and debt repayment.
- Financial Security: Educate customers about insurance, emergency funds, and safeguarding their financial future.
Informed customers can make better financial decisions, feel more confident in their choices, and establish a deeper connection with their financial institution. The result? An elevated CX that positions your company as a trusted advisor in their financial journey.
Following the lead of digital-first banks like Monzo, Starling, and Revolut, many other institutions have realized the CX potential of personalized budgeting. This innovative approach lessens the management burden on customers; tailoring budgeting infrastructure to suit the users’ own unique needs and preferences.
By offering customized budget plans based on individual income, expenses, and financial goals, customers gain greater control over their financial journey. Real-time insights into spending patterns enable them to stay informed about their financial health, while automated alerts warn them of approaching budget limits or unusual expenses.
Real-time notifications are another trend revolutionizing the way financial institutions interact with their customers, safeguarding against bill shock while also enhancing the overall banking CX.
Through alerts, mobile notifications, and personalized messages, your financial institution can keep customers informed and in greater control of their finances than ever before.
It could be alerting customers when they approach data or spending limits, detecting suspicious transactions in real-time, or sending personalized bill reminders to avoid missed payments. As alluded to by Hitachi (‘Doing the Right Thing,’ 12 Banking Customer Experience Trends to Watch in 2023), this proactive communication helps financial institutions empower their customers, foster financial prudence, and create a seamless CX.
Provide Customers With a Shockless Future
In the ever-changing world of finance, delivering an exceptional customer experience and safeguarding users against bill shock have become vital imperatives for financial institutions. To sum up, aim for the following:
- Maximum Visibility: Give your customers clarity and insight into their unique accounts and financial situation.
- Transparent Communication: Prioritize customer-centricity with open and honest interactions to build trust.
- Financial Literacy: Empower customers with knowledge and resources to make informed financial decisions.
- Personalized Budgeting: Tailor budget plans, insights, and alerts to each customer's unique needs.
- Real-Time Notifications: Provide instant alerts, mobile notifications, and personalized messages for proactive financial management.
These strategies – complemented by streamlined digital infrastructure such as the Digital Completion Cloud – create a transformative CX, positioning your financial institution as a trusted and valued partner in your customers' financial journey.