In today's multichannel, multi-product environment, general customer satisfaction measures are no longer sufficient for capturing the complex dynamics of the bank-customer relationship. Jean Lassignardie, global head of sales and marketing for Capgemini Financial Services, explains why the industry needs to adopt a more robust method for tracking customer behaviours and attitudes.
From an earnings standpoint, some financial industry sectors may be in recovery following the global economic crisis, but at the consumer level the effects of the crisis continue to linger.
The most effective way for banks to stand out in today's market is to create a more positive customer experience. Our research shows that, more than any other factor, customers care about the quality of service they receive from their banks.
Fifty-five percent of customers around the globe cite service quality as the most important reason prompting them to sever a banking relationship. Ease of use (51%) and fees (50%) are the second and third most important reasons for leaving a bank.
The 2011 'World Retail Banking Report' from Capgemini, UniCredit and Efma found that distrust in the retail banking industry continues to run high in the wake of the crisis. Data from our customer survey shows that more than half of customers in Latin and North America, Central Europe and Asia Pacific have low levels of trust in the banking industry.
With trust still faltering, banks face an increased risk of customer attrition if they are not able to create more positive impressions. Traditionally, banks have tried to differentiate themselves from their competition by improving rates or lowering fees. But this tactic has become more difficult in an era of heftier regulation, heightened competition and increased capital standards. Nor can banks rely on innovation, now that most products have become commoditised.
Improving customer experience requires achieving greater insight into customer drivers, attitudes and behaviours than banks have traditionally been able to obtain. Organisations must begin with a deep understanding of customers, including their personal values and standards. They must track not only specific transactions, but the sum total of a customer's journey with a bank.
Simple customer satisfaction measures are not able to capture this level of complexity. Customer satisfaction, a onetime measure of how products and services meet or surpass customer expectations, typically gauges satisfaction immediately following a single interaction. It does not provide insight into the multitude of factors - including products, channels and types of transactions - that affect customer experience throughout the duration of a banking relationship.
Today's customers do not have simple relationships with their banks. They use different products and channels to execute a wide variety of transactions and this mix of preferences varies depending on where they live, how old they are, their income level, or any one of a number of other factors. Capgemini's proprietary Customer Experience Index (CEI), built from its Voice of the Customer survey of nearly 14,000 customers across the globe, captures all these elements.
In a significant departure from typical customer satisfaction measures, the Customer Experience Index identifies the products, transaction types and delivery channels that are most important to customers, and then measures satisfaction specifically along those dimensions. In this way, it aligns the product, transaction and delivery-channel capabilities of banks with the values and standards of their customers.
In effect, the Customer Experience Index incorporates the different touch points - including the branch, internet, ATM, mobile and phone - that support customers through their interactions, as well as the product and service ecosystems that influence their experience. The result is a view of customer satisfaction that is more in-depth and better aligned with customer values than can be provided by simple satisfaction measures.
Customer satisfaction differs from customer experience
When customer satisfaction rates are compared to the rates of positive customer experiences, sharply divergent results emerge. In terms of customer satisfaction, banks achieved a global average of 59%, with banks in the US and Switzerland achieving the high of 73%. With the exception of banks on the very lowest end of the customer satisfaction spectrum, these results would indicate that most of the industry is doing an adequate job of satisfying customers.
The CEI, however, reveals a much different picture. The CEI measures positive or very positive satisfaction levels within the touch points or levers identified by customers as most important. When satisfaction is examined at this more granular level, the industry achieved a global average of only 35.8%, far lower than the global satisfaction rating.
The gap between positive customer satisfaction and positive customer experience persists in every one of the 25 countries studied (see Figure 1, page 51). This finding underscores the reality that relying on high-level customer satisfaction measures alone to gauge customer attitudes may be misleading. Customer satisfaction in isolation does not provide critical insight into what customers consider important and may cause banks to overestimate their ability to drive customer loyalty and retention.
To increase their success in providing positive customer experiences, banks need to have a deeper understanding of how customers think their banking experiences can be improved. Our research found that delivery channels are of central importance to customers when it comes to their banking interactions. Customer interactions begin and end with channels, making them the prism through which customers gauge their experiences.
Customers around the world showed regional differences in how they value the various channels. In the Americas, the branch edged out the internet as the most important channel, while in Europe and Asia-Pacific the internet exhibited a slight lead over the branch. Mobile was considered the least important channel in all the regions, though Latin Americans valued it much more highly than customers in other regions.
When the dimension of age is added to the regional view, yet another perspective of channel preferences emerges. In general, older customers tend to be more positive about their branch and internet experiences than younger ones. Still more insight emerges when channel preferences are examined in light of the type of transaction being executed; customers prefer to use the internet when gathering information, transacting or looking up the status of an account. But when seeking to resolve a problem, they would rather go to a branch.
Expectations affect experience outcomes
Customer expectations likely play a role in how well banks in various countries perform on the CEI. Expectations differ greatly from country to country, depending on the maturity of a country's banking industry and the general state of its economy. India, for example, performed very well on the CEI compared to banks in more developed countries, probably because customers there have not become fully accustomed to the significant infrastructure improvements Indian banks have made in recent years. Similarly, very high expectations by customers in Western and Central European countries likely led to less positive customer experiences in those countries.
Given the wide variability of different countries' economies, service levels and customer expectations, it's no surprise that opportunities for delivering positive customer experiences differ widely by region. Using a multi-faceted tool like Capgemini's CEI, banks can identify, by country, the specific touch points, transactions or products in which customers say their experiences are sub-par, and target those areas for improvement.
When drilling down to a country level to uncover and explore differences, the CEI reveals US banks are far better at delivering positive experiences compared to those in Japan. Even so, there are significant areas, including varying types of mobile and phone transactions, where US banks could focus on improvement. Japanese banks, meanwhile, could benefit by improving any one of a number of areas. But the CEI shows that the greatest impact would come from helping customers resolve problems, particularly through the branch or phone.
According to the CEI, French banks are fairly successful at addressing complex issues in the branch, and should seek to bring their service-delivery performance through the phone and mobile channels up to the same level. Dutch banks should also improve service through the phone and mobile, but for a different reason. With Dutch customers already embracing the internet, Dutch banks should extend their electronic reach by improving service levels through all the electronic channels.
Banks have done a good job of minimising negative experiences. But as they seek to restore trust in the wake of the financial crisis, they have yet to 'wow' their customers. Doing so will involve obtaining a much deeper understanding of how customers view the importance of different channels, products and transaction types, as well as how satisfied they are with those elements. It will also require granular knowledge of customers by region, age, income and other demographic factors. Only by gaining such specific insights into the customer experience will banks be able to lay the groundwork for delivering a more consistent, connected, positive customer experience that can help win back customer trust.
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