Customer service may have different meanings across industries, but the underlying objective always remains the same, which is customer retention and loyalty.

The financial services sector is all about customer trust and loyalty, and financial institutions that deliver excellent customer service can stand out from competitors. So, what makes customer service important in the financial sector? As digital technology evolves rapidly, banking customers have come to expect ‘personalized’ and consistent services across all digital channels.

They hope to get experiences similar to those their consumer apps provide them. Also, banking, insurance, and other financial services are seeing the emergence of digital-first solutions providers designed to deliver great customer experiences and services. No wonder financial institutions must keep pace with digital technologies when handling customers.

The risks of not doing so are real. For instance, private banks risk losing their customer base if they don’t improve or evolve their services. One-third of high-net-worth customers expressed dissatisfaction with the quality of financial advice offered by their banks, resulting in 1-out-of-5 customers moving their assets to another bank during the 2020 pandemic.

Despite the benefits, there are plenty of challenges in providing excellent customer service in the financial sector. Let’s discuss some important challenges that need to be addressed:

Increased Call Volumes and Call Times During the Pandemic

During the disruption caused by the 2020 pandemic, customers mostly interacted with their banks using phone, chat, or email. As a result, banking call centers witnessed a significant increase in customer calls.

Further, the rapid and unplanned transition to remote work exposed some critical shortcomings in most financial institutions’ older “legacy” systems and technologies. For instance, a customer contact center reported a call volume increase of 37% compared to 2019, while another government agency experienced an 80% surge in the early days of the pandemic.

An increase in call volumes directly impacts the customer’s waiting time, particularly among direct banking customers. High waiting times can be frustrating for customers. Research from Deloitte Digital found that consumers switched to other financial institutions because of an unsatisfying customer service experience during the pandemic (specifically slow or unavailable call center services due to high call volumes).

Personalized Customer Experience

Today’s smart banking customers are more informed than ever before and expect a high degree of personalization and convenience in their banking experience. A

Moreover, customers are also looking for personalized advice from their banks designed around their financial goals or needs. A personalized virtual assistant in a chatbot can improve customer service. A McKinsey report suggests that 25% of banking customers want a digitally-enabled private banking experience with remote human assistance available.

For example, Erica, Bank of America’s app-based chatbot, helps customers with their problems without needing a live operator. Around 10 million customers have interacted with the chatbot, which has become integral to the bank’s customer personalization strategy.

Complete Transparency

Growing frauds in the financial sector mean that today’s customers look for more visibility and transparency when dealing with their banks. Financial service companies need to work toward providing transparency, which poses a unique challenge in the digital marketplace.

A 2019 Pew Research Center survey found that 79% of Americans are concerned about how companies are using their data. Over 80% of customers believe banks collecting their data pose a risk for them, while another 81% feel they have little or no control over the data that is being collected.

When consumers were asked about issues of trust with their banks, only 2.6% of the banks were listed in the “financial institutions with the most satisfied customers.”

Banking consumers are also perceptive to how a financial organization responds to a data breach, which can change their perception of data privacy. Consumers not only want their data to be safe and secure but also want to be notified if and when there is a major breach.

Negative Social Media

Social media platforms are the easiest outlets for ‘disgruntled’ customers to vent their frustration with banks or financial institutions. Effectively, even a few ‘negative’ posts about a financial institution can be a PR nightmare and can bring a bad reputation to the brand.

On their part, banks and FIs need to respond quickly and appropriately to dissatisfied customers and try to resolve their concerns. This requires constant monitoring of their social media pages and responding immediately to unhappy customers.

Technologies like interaction analytics can analyze the spoken conversations between the customer and customer service agents and help identify which customers are likely to post negative comments on social media channels.

Omnichannel Experience

Today’s banking customers expect to access their financial accounts and perform different transactions anywhere, anytime, and on any device. This has complicated the mix of channels through which service must be provided.

According to the CEB TowerGroup research, consumers still prefer a human touch to their banking experience despite an increase in digital transaction volumes. A McKinsey report found that 71% of consumers demand a more flexible journey like multi-channel interactions.

Most financial institutions still need to provide their customers a multi-channel (or omnichannel) experience. The challenge to implementing omnichannel strategies is the presence of “siloed” business systems that work independently and are not integrated.

Financial services companies must implement an entirely new technical infrastructure with enhanced data capabilities to overcome this challenge.

Moreover, these companies must facilitate data exchange across digital channels to acquire knowledge about customer journeys and interact with their customers in real time.

How do financial service companies overcome most of these challenges? The right implementation of data analytics can help. Let us see how in the next section.

How Customer Analytics Can Resolve Customer Service Challenges

With an unprecedented volume of daily financial transactions, the financial sector has access to a growing volume of customer data. Customer Analytics can help the finance industry to leverage this data for valuable insights that can fulfill ever-changing customer expectations.

Here are some of the benefits of data-backed customer analytics:

Provides a better Understanding of Customers

By aggregating customer data, analytics provides an in-depth, holistic picture of each customer and their future requirements. FIs can leverage these insights to determine their target audience and personalize their customer offering.

Helps in Monitoring Fraud

Customer Analytics can help identify patterns in social media interactions and transactions and recommend appropriate actions on the part of the service provider. AI-based tools and techniques can be used to recognize data patterns and trends and use these patterns to automate and monitor financial risks.

Helps Devise Marketing Strategies

A holistic customer view allows FIs to target them with the right products and services and design their overall marketing strategy. For instance,  American Express is an excellent example of adopting advanced data analytics helps retain customers. The global financial services company uses big data tools and techniques to empower business decision-makers. It also analyzes cardholders’ spending patterns to provide customized offers and retain customers.

Conclusion

By elevating their customer service infrastructure, financial services can maintain customer confidence and trust. We have seen how effective data analytics can play a key role in enhancing customer service and overcoming the major challenges in the financial sector.

Emergys has delivered some unique and game-changing AI and data analytics solutions and can help you gain the right insights. Contact us right away to know more.

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