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How challenger banks are transforming customer service in the financial sector

How challenger banks are transforming customer service in the financial sector

Seamless digital products and effective customer service is what consumers want from their financial provider.

Excellent customer service is a key differentiator for challenger brands, with digital first-banks now outstripping traditional providers across the globe when it comes to customer satisfaction. [1]

Consumer behavior is driving change across every sector, with a growing demand for instant access to information and products. The banking, financial services and insurance sector (BFSI) is no exception and is ripe for transformation, with many companies responding by adopting a digital-first approach when it comes to their service offering.

Now, there’s no denying that the ease of checking your bank balance on-the-go, being able to transfer money via text or paying for your lunch using your phone makes life easier. But with almost every financial firm now offering this service, how can companies differentiate themselves from their competitors in an increasingly saturated market?

The rise of challenger banks prioritizing customer service

The latest Edelman Trust Barometer recently revealed that financial services is now the least trusted sector globally. Data breaches and IT issues have tarred the reputation of many of the world’s most well-known financial institutions. So, it’s no surprise that many people are now looking for an alternative to their traditional bank – and the industry has responded.

In fact, in the ten years since the global financial crisis there’s been an explosion of new challenger firms. In Europe alone new entrants now make up 20 per cent of the banking and payments institutions. [2]

Without complex legacy IT systems to hold them back, challenger banks can think with a ‘digital-first’ mindset to deliver fast and efficient services at the touch of a thumb. But this isn’t the only thing that appeals to consumers. Many are taking on the old guard when it comes to customer service standards as well.

We recently worked with a challenger bank in Canada that saw a gap in the market for a bank providing genuinely exceptional service to its customers.

We helped to recruit and train a team of highly-driven and friendly customer service representatives to establish a real connection with consumers. To combat the frustration of being bounced around a call center, representatives in every team were trained in banking regulations and compliance to handle any question put to them. They were also proactively encouraged to see any query through to completion rather than passing it on to another colleague.

This exceptional level of support is reflected in outstanding reviews from its customers. Almost two-thirds also chose to thank the representative they’d dealt with with actual monetary or physical rewards, such as coffee points or retail vouchers, given via an instant feedback form.

By creating a culture where they feel valued and rewarded, the customer service representatives were also more willing to actively provide information and insights from the calls they had with customers, meaning that the bank’s management team could effectively adapt their products and services so that they truly addressed consumers’ needs.

This is just one example of a culture shift which is happening across the globe. According to the latest Performance Against Customer Expectations study (PACE), digital-first financial providers are outperforming the world’s top 50 banks on nearly all customer service metrics.

Their ability to seamlessly combine technology-driven service with personalized support means that they’re outstripping traditional brands when it comes to meeting their customer’s needs.

Focusing on digital platforms rather than a high street presence also gives them the flexibility to adapt their customer service offering and strategy quickly, meaning that they are much more effective when it comes to meeting the requirements of their customers than their traditional counterparts.

Traditional banks have much to learn from the example set by challengers. Time will tell if they are agile and adept enough to put these examples of best practice in place for their own customers, or risk losing them forever.

Author: Editorial team Future. Customer.

[1] https://www.globalbankingandfinance.com/digital-first-direct-banks-soaring-ahead-on-customer-satisfaction/ 

[2] https://www.businesswire.com/news/home/20181017005055/en/Banks’-Revenue-Growth-Risk-Due-Unprecedented-Competitive

Tags for this article Banks (13) Customer Experience (74) Customer Service (88) Digitization (160)

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