Dive Brief:
- National banks identified as CX leaders generated a cumulative total stock return 2.4 times greater than those identified as CX laggards between 2016 and 2024, according to research by Watermark Consulting.
- Retail bank CX leaders delivered a cumulative total stock return of 251% during the period, compared to a cumulative total stock return of 104% for CX laggards. Watermark Consulting examined the top three and bottom three CX performers as identified by JD Power.
- Banks can tackle "low-hanging fruit" to measurably improve their overall customer experience, according to Jon Picoult, founder of Watermark Consulting. That includes remedying long wait times to reach customer service representatives, disclosing potential fees in plain language, and offering competitive interest rates.
Dive Insight:
Many banks think retention is equivalent to loyalty, which leads them to overrate their customer experience, according to Picoult. In some cases, they may not even recognize where their experience is falling short.
Banks can continue drawing income from fees and deposits related to customers who stick with a bank even if they don’t feel true loyalty, according to Picoult. However, those customers won’t feel inclined to stick with the bank for other services, and they are less likely to refer a friend while being more likely to defect to a competitor.
“That’s a lost opportunity for the bank,” Picoult said in an email. “Stronger loyalty translates into higher cross-purchase rates and greater wallet share.”
Many banks emphasize the person-to-person experience inside a branch when discussing customer experience, according to Picoult. However, for most customers this is an infrequent, if still important, touchpoint — they spend much more time making transfers, checking account statements and paying for bills online.
These mundane moments can present a golden opportunity to win customers’ loyalty for companies willing to invest in their digital experience.
“The first step is for banks to acknowledge and fully appreciate that these everyday tasks are not boring, administrative interaction points, but rather, they are bona fide opportunities to inspire customer confidence and differentiate the brand experience,” Picoult said.
Banks should invest in intuitive interfaces across their digital platforms, including websites and apps, according to Picoult. They also need to have clear, easy options for customers to escalate to an alternative channel, like a contact center, when something goes wrong.
“When the everyday banking tasks go sideways, that becomes a moment of truth for the customer: Will it be easy to contact the bank and get in touch with a knowledgeable, competent representative?” Picoult said. “Will they take ownership for resolving my issue, or pass me off to another department?”
Banks that create an ownership ethos among their staff and get them to value “one-and-done” interactions will have an advantage, Picoult said. Quick, decisive solutions to common banking problems often builds loyalty instead of eroding it.
