Out with the old, in with the new
How CXM has toppled compliance as the number one priority for financial services
One of the most highly regulated industries, the financial services sector faces the daily challenge of complying with a whole host of regulatory and legislative requirements. Unsurprisingly, compliance has taken up a great deal of time for financial services businesses over the last few years, with the prospect of huge fines and legal action as a result of non-compliance ensuring that watertight compliance has been top of the priority list.
But, as financial services businesses get better at compliance, now treating it as part-and-parcel of doing business in this day and age, slowly but surely, it’s falling lower down the list of priorities. The thing that seems to be taking its place as the most pressing business priority is Customer Experience Management, or CXM as it’s now more commonly known.
On the rise
So why is CX now seen as so important for financial services businesses? Well, businesses are recognising what a powerful tool CXM is, with CX excellence delivering those all-important levels of customer trust and loyalty. Not only does this help to retain customers, but happy customers will often unwittingly become advocates, too, bringing on-board new business through peer-to-peer recommendations. And, customer expectations have risen dramatically, with customers demanding a slicker, faster service regardless of how complex the situation, meaning that financial services businesses have to strive harder than ever before to achieve customer service excellence wherever possible.
In a world where increased digitisation has meant that all businesses pretty much have access to the same technological advantages, and where products and services on offer are often very similar regardless of where you buy them, CX is now a key business differentiator. For financial services businesses to stand out from the crowd, investing in CXM is an investment in the sustainable growth of the business, establishing a customer-centric culture which fosters CX excellence across the board.
Compliance Vs CXM
As financial services businesses know all too well, compliance is very much a moveable feast, with many struggling to keep pace with seemingly ever-changing rules and regulations. This can have a negative effect on CX, with the need to make process changes to accommodate new compliance requirements adding new layers of complexity to an already complicated customer journey. As such, businesses need to seek a way to do both – keep ahead of the game when it comes to compliance while improving CX levels for increased customer retention and business growth.
Where some businesses are struggling is getting the balance right between maintaining compliant processes and procedures while optimising CX. It’s all too easy to get bogged down in compliance at the expense of CX but the two aren’t mutually exclusive and can work side-by-side. In fact, for those businesses who have yet to develop their CX capabilities, compliance is a good place to start. For example, in the UK, the Financial Conduct Authority (FCA) mandates an eight-week timeframe in which businesses need to resolve complaints. In reality, for customer service excellence, this simply isn’t quick enough, giving disgruntled customers plenty of opportunity to up and leave before the business has the opportunity to flex any CX muscles it might have. For financial services businesses, they need to recognise compliance requirements such as this as the baseline standard, instead focussing on delivering the best outcome for the customer, with compliance almost a by-product of the interaction.
As omni-channel business models become the norm, so the number of customer touchpoints to take into consideration increases. Not only is this a challenge for upholding compliance, but it increases the opportunity for customer engagements to go wrong. In short, what results is a more complex delivery model, one that needs to be carefully managed at all times. Many financial services businesses are still trying to manage this new way of working with disjointed, disparate systems. Not only does this make it difficult to achieve the necessary levels of compliance, but it makes for a poorer customer experience, too. This lack of unity and lack of joined-up information slows down service levels, preventing the business from achieving the agility required to deliver the speed of response that customers expect today.
This combination of non-compliance and poor CX has led to more financial services businesses investing in solutions which can help with both, tools that deliver the workflows and reporting functions necessary to carry out and evidence compliance all while improving CX. For financial services in particular, the need to carry out due diligence on every customer can add extra friction to the customer journey. With systems in place that can smooth the whole on-boarding process, what results is a quicker, slicker customer journey.
Similarly, the need to capture every customer interaction, regardless of with which business department, is not just a question of compliance but of good customer service, too. Access to a comprehensive, single view of the customer at every interaction again lessens any friction to the customer journey. And, having access to this information, such as that provided by a robust case management system, helps the business to provide an informed, personalised and customer-appropriate response every time, boosting customer satisfaction levels considerably for major improvements to CX.
The right balance
When it comes to compliance and CXM, it shouldn’t be a competition. Compliance is a necessary part of operating successfully (and lawfully) in the financial services sector and without a doubt is a non-negotiable for financial services businesses. But, it’s CXM that will provide that all-important long-term competitive advantage, building a customer-first culture across the business and providing a sustainable source of business differentiation in an increasingly crowded marketplace.
Those businesses who prefer to err on the side of caution and prioritise compliance over CXM risk losing customers. Although less tangible initially, the risks of underestimating the importance of CXM are very real indeed and financial services businesses should neglect it at their peril. We’re all operating in an age where CXM excellence is a must and those financial services businesses who take this on board and adapt accordingly will outpace their competitors, nurturing a loyal customer base while building the foundations for considerable business growth.
For more information on how Aptean can help you strike the right balance between compliance and CXM, contact [email protected]