Establishing a customer experience north star: Banking in the experience economy
For as long as banking has existed, the core utility has remained intact: Banks serve as intermediaries in credit transactions. Their primary function is to either match clients who have resources but want to consume them later, or provide resources today “on loan” to clients who expect to receive them in the future.
Pretty dry when you put pen to paper.
While this highly rational understanding of the role of banking in our modern financial system has endured for centuries, we are now witnessing banking’s inevitable reckoning with the experience economy of the 21st century.
Others have traveled this path, transforming their raison d’etre from functional middleware to essential experiences. Think UPS evolving from “The Package Delivery Company More Companies Count On” to “Synchronizing the World of Commerce” to “Delivering Possibility”.
What these words represent is not just marketing speak, but a fundamental shift in mindset and a transformation of the business anchored in experience. For bank brands, the turns of phrase and jingoistic taglines may have kept pace, but it has been considerably more challenging to evolve the experience itself.
Until now. Fintech’s rise has demonstrated the potential for banking to finally join the experience movement. The solution lies in establishing and implementing a customer experience (CX) north star to set the ideal experience for how customer interactions take place. This involves diving deep on the human needs of customers and optimizing every step along the full customer journey – from product positioning to the tools and people customers interact with along the way.
According to a survey of banking professionals conducted by Arizent and American Banker earlier this year, three quarters of financial institutions have a clear definition of their CX north star, and about half of those have fully embedded their north star into their operations.
To deliver on your CX north star, banks must align on three core customer experience levers: culture, identity, and experience.
Lever 1: Cultural payoff
To optimize for the cultural payoff, banks need to ensure their internal organization is not just aligned attitudinally to their CX north star, but that their culture, design, and ways of working are also supporting it in practice.
Rewards and incentive systems
One way to bring this cultural lever to life is to set up rewards and incentive systems to motivate team members to act in service of your north star.
In the Humanizing Brand Experience: Financial Services, Vol 3 report, in partnership with American Banker, we surveyed 5,500 U.S. customers on four experience dimensions: sensorial, intellectual, emotional, and behavioral.
In the intellectual category, customers ranked “provides the best customer service” and “makes banking simple” as the top two most important drivers in the category, respectively, out of 18 total.
Keeping these important elements of the customer experience in mind, a bank may create incentives for customer service representatives that reward them for resolving issues on the first interaction. The bank could also track customer satisfaction metrics and tie bonuses for maintaining high scores. This encourages employees to prioritize the customer experience even when under pressure.
Training and learning and development (L&D)
Banks need to revamp their training and L&D systems to acquire, onboard, and provide ongoing staff training to uphold their CX north star.
When ranking 18 intellectual drivers, customers ranked trust as the third most important, maintaining its spot from 2022. Transparency, on the other hand, jumped two places, from 13 to 11, year-over-year.
To enhance trust and transparency along every touchpoint of the customer journey, banks should update training programs to focus more on soft skills such as empathy, active listening, and problem-solving. Onboarding processes should clearly communicate customer experience expectations and company values.
Additionally, ongoing training through simulations, coaching, and feedback reinforce consistency in the customer experience while ensuring employees are prepared with the right information to provide the transparency customers are looking for. It’s also a good idea to invest in regular skills assessments to identify knowledge gaps and provide targeted learning opportunities.
Lever 2: Brand identity
Out of 10 emotional drivers, “gives me confidence that my financial health will be better tomorrow than it is today,” “helps me live a good quality of life,” and “understands my unique financial needs” were all ranked two places higher than last year, underscoring the growing role financial institutions play in multiple facets of their customers’ lives.
To satisfy this customer experience expectation shift, banks need to ensure that their brand is clearly communication the CX north star across all touchpoints. This can be achieved by focusing on three core components of brand identity:
A brand’s visual identity shapes its customers’ perceptions and conveys its core values through logos, colors, typography, imagery, and other elements. A strong, consistent visual identity across all touchpoints including website, mobile app, branches, marketing materials, etc. aligns the experience with the brand promise to build trust.
But visual identity goes beyond imagery to include everything from user experience and user interface cues, such as how information is structured and flows, navigation, interactions, and transitions. The cues should all work together to deliver intuitive, frictionless experiences true to the brand. Even details like button shapes and microinteractions carry meaning and can strengthen or detract from the brand’s identity.
The counterpart of a brand’s visual identity is its verbal identity, which encompasses messaging, tone, voice, terminology, and other elements of written and spoken language that shape customers’ perceptions. A unified verbal identity helps create a cohesive brand personality across all customer touchpoints.
A bank’s visual and verbal identities work together to deliver on the promise of the CX north star at every interaction. The perfect union of comprehensive visual and verbal identities instills confidence in customers, encouraging engagement across channels. Thoughtful design and messaging make complex banking interactions simple and intuitive, raising the bar for these critical elements of the CX north star.
Content format and delivery
In addition to a bank’s core properties such as their website, mobile app, and branches, it’s important to also consider the brand’s identity across content formats and delivery. By staying up-to-date on how customers prefer to consume content, as well as, the type of information that consumers desire, banks can better position themselves to attract new customers and retain existing ones.
This will likely be comprised of a diversity of content types including audio, snackable content, visualized information (such as infographics), and video. By adapting the brand identity for new formats, banks can relevant while delivering on their CX north star in new and refreshed ways.
Lever 3: Tangible experience design
The third lever, tangible experience design, encompasses identity and builds on it to optimize the full customer journey. Tangible experience design scrutinizes how banks move customers from acquisition to the discovery, procurement, and usage of new products. Banks can deliver on this lever by investing in brand architecture, digital platforms, and the retail experience.
An intuitive brand architecture is crucial to clearly convey a unique selling proposition and differentiate from competitors. A cohesive organizing principle, hierarchy, and nomenclature helps banks showcase their offerings while communicating why it’s the right place and the right time for customers to invest in your products.
To build an effective brand architecture, begin with your positioning and value proposition. What makes your bank unique compared to alternatives? What core needs are you fulfilling for customers? Then, map out offerings in a logical hierarchy, grouping related products, and services into coherent lines or tiers.
Descriptive and consistent naming conventions are key – the terminology used should directly reinforce your positioning. Ultimately, the goal is to construct a framework that tells a compelling story of how your bank delivers value in a distinct way.
Of 16 behavioral drivers, customers ranked “[Brand] has the best online banking experience” 4th in importance – up 4 places since last year, and “[Brand] has the best mobile banking experience” 6th in importance – up 3 places year-over-year.
With digital experiences at the forefront of customers’ minds, banks need to deliver on the promise of digital transformation to truly carry out their CX north star. This goes beyond simply providing digital tools (which actually declined in importance year-over-year), and extends to creating seamless interactions on digital channels. The process requires looking at the end-to-end customer journey and identifying pain points and opportunities to create a frictionless, personalized experience.
By improving digital experiences, banks can meet rising customer expectations. However, this cannot be done through technology alone. Banks need to take a human-centric approach, leveraging customer insights and design thinking to create experiences that truly resonate with users’ needs.
Though digital banking is on the rise, the in-person experience still plays a vital role in customer satisfaction, acquisition, and retention. Convenient location was the main factor driving customers to choose their primary financial institution.
The retail experience must enhance physical spaces. This is made up of everything from the clarity and placement of signage, branch design, wayfinding tactics, merchandising, and more. These elements must work together to reinforce the CX north star by creating an inviting, efficient and visually appealing environment that makes customers feel valued and encourages engagement.
Furthermore, banks that integrate technology with their physical spaces will be best positioned to meet the evolving expectations of customers who want digital convenience but still value personal service. This may involve leveraging virtual assistants and tellers in kiosks inside the physical branches to expedite service. Another way is for banks to provide human tellers with digital tools to quickly comprehend each customer’s financial profile to offer a more personalized experience.
Accessing proprietary experience data
While these important insights can help financial institutions establish their CX north star, banks that have a nuanced understanding of their unique customer expectations and experience demands will be several steps ahead.
By becoming a Humanizing Brand Experience: Financial Services member, banks will receive access to a brand dashboard with their own data overlayed with the regional or DMA market, as well as a drill down into a subset of three competitors of your choosing. Each member will enjoy a consultation with our team of experts to review key insights, create an action plan, and outline priorities for future success.
From transactions to experience
For centuries, banks have operated as utilitarian financial intermediaries fulfilling a transactional role. But the rise of a new experience economy demands a reckoning.
Banks must now evolve beyond middleware to become experience brands optimized for customer satisfaction. This requires establishing a clear CX north star to guide business priorities and culture.
By aligning every touchpoint to deliver distinctive value, banks can transcend their legacy as transaction processors. Their future lies in fulfilling profound human needs and sustaining relevance by embracing experience over legacy.
Interested in learning more about the Humanizing Brand Experience: Financial Services report or membership? Set up a meeting with our team to review the results from this year’s report, talk about what they mean for your bank, and learn how you can gain access to customer data that is tailored to your brand and market.