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Banking and Customer Loyalty: Understanding the Relationship with Self Service Technology

  

COPC Inc.’s research indicates that many customers are still looking to switch banks and as a result there are millions of new business opportunities for banks or other financial service providers being created every month.

The question for leaders in the Banking industry is this, “how can banks take advantage of these new business opportunities, or equally importantly, how can banks shore up their defences and make sure that their valuable customers don’t defect?

At COPC Inc. our CX Research Team interviewed 800+ consumers across Asia about their experiences when interacting with banks and we were able to assess the impact of customer contact on the likelihood to recommend a bank (using the Net Promoter Score® question).

What we found was that customers’ experiences when they interact with their banks have a BIG impact on their satisfaction, and consequently their loyalty.


The impact of customer contact and issue resolution on NPS

When customers have an active experience with their bank – and this experience is positive (ie their issue is resolved) – then their NPS is high. When their experience is negative (ie their issue is not resolved) then the NPS is low. Banking customers who have NOT had an active experience are neither satisfied nor dissatisfied with their bank – this is their NPS “resting heartbeat”.

Managing customer contact effectively by understanding, visualising and transforming customers’ Service Journeys (rather than always trying to push customer contact to a Self Service Technology (SST) solution) has become one of the major strategies employed by the retail banking industry for customer acquisition and retention. One of the main CX strategies employed by our clients globally is called Service Journey Thinking.

Service Journey Thinking is a CX Strategy which provides organisations with a set of clear, actionable and practical approaches to help them optimise the Customer Experience.

Service Journey Thinking enables banks to look in more detail at how their customers interact with them, blueprinting out all the frontstage and backstage actions and touchpoints and identifies all the potential “moments of truth” along the service journey.

Where appropriate, banks use self service technologies and where appropriate they use human assisted channels. SST channels though have been widely adopted, with their cost and accessibility benefits compared to human-assisted channels, so we thought it was important to test whether these channels had a relationship with satisfaction.

We looked into the data to see if using online (mobile or desktop) banking improved the customers’ likelihood to recommend their bank. The answers were quite conclusive: those who have used online or mobile banking are much more likely to recommend their bank than those who had not.


Our findings clearly show that both human assisted and SST channels play an important role in shaping customer loyalty (either positively or negatively) and we believe that banks should focus on designing better Service Journeys to retain customers and to increase word of mouth referrals.

Promoters are 3.6x more likely to have actually recommended their bank than Detractors

“Net Promoter, Net Promoter System, Net Promoter Score, NPS and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.”

Ian Aitchison

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