Financial services firms warned: Lowering complaints requires smarter digital experiences

Customer complaints tend to stem from either bad service or a lack of understanding around the product being purchased. With financial service customer expectations at an all-time high and consumers going online for instant answers, it’s no wonder there’s such an emphasis on getting the digital experience right.

The Financial Conduct Authority (FCA) published its bi-annual complaints list earlier this year – naming and shaming the top complained about financial services firms, it’s a list that no one wants to top! As it turns out complaints across the financial services industry are down 15% – good news for companies and their customers. But at 2,479,029 complaints from July to December 2013, they’re still too high. The key to reducing these complaints relies upon getting closer to customers and tuning into their ever changing needs.

Customers in the driving seat

It’s fair to say the customer experience bar is generally quite low within financial services - this is dangerous because today’s customers expect more from service providers. They’re accessing information and real-time data on the move, thinking ahead and constantly seeking better, easier, faster services. Plus they don’t live in a bubble and are interacting with brands from other sectors, such as retail, travel and telecoms that have already embraced a more customer-centric service delivery model; integrating multiple communication channels such as face to face, telephone, TV, web and mobile devices. The result is the financial services industry is visibly behind the curve. 

And now the financial industry has to handle increasing regulatory pressure, as well as the rising expectations of customers. The FCA is demanding greater emphasis on the principles of clear, fair and not misleading customer information, and there’s a huge push for greater transparency. So companies need to find ways to engage and educate consumers, to help them make better-informed decisions. We know it’s not easy to present complex financial products and services in a way that Joe Public can understand and engage with, but it’s certainly not impossible.

Could digital be the answer?

The digital landscape has changed significantly with the massive uptake of consumer digital devices. The initial ‘wow factor’ of digital devices and applications has died-down as these have become more mainstream as consumers have become more digitally aware and empowered. As much as there is an expectation on the hardware itself to continue to evolve, there are also huge expectations on the experience offered by the plethora of web and mobile applications/software. Users today have become more savvy and comfortable with digital technologies and experiences and there is a direct relationship between increased use of digital services and the expectations of today’s users. And unless the experience matches that expectation, complaints won’t be going away anytime soon.

People have different preferences when it comes to absorbing information. Some learn visually, others like tactile experiences, or there are those people who just prefer to listen. Customers want to consume information how they want, at the pace they’re comfortable with and then delve deeper where they choose. For example, visual stimulus, interactive tools and video all help people to engage and improve customer understanding, making them more likely to choose the right products in the first place – thus reducing potential complaints.

Delivering a digital experience

Financial services companies need to think about whether they’re set-up to evolve their customer experiences in-line with changing customer needs. Being adaptable and nimble is critical because technology is changing at such a rapid rate. We’re even starting to see instances where customer expectations are exceeding the rate of technological change. Because people’s needs and expectations are changing faster than ever, companies need to work out how to keep pace with this.

Meeting this challenge depends on the customer experience being taken seriously at a board level. Unless people at the top of the organisation are fully committed, they’re never going to be able to deliver the transformational change that’s required within the financial services world. A committed board will always find ways not to compromise on their customer experience ambitions and as a result they will find customer satisfaction soaring – and complaints plummeting.

Everyone wins

Financial services firm Skandia recently created a risk profiling app for mobile and tablet devices, to streamline the investment process and increase customer understanding. The cumbersome traditional method of paper forms and at least one unnecessary client meeting was replaced by an app that the financial adviser uses directly with their clients.

Together, they go through the interactive risk profiler tool and immediately get an attitude to risk score. The app then enables the adviser to bring the risk score alive in a way that makes sense to the customer. They can compare this against other risk levels, choose the right one, and then capture the client’s signature directly on the mobile or tablet.

This is a win for the adviser, the provider and, vitally, the customer. One adviser firm estimates this app has saved £37,000 per year. It’s a faster, more convenient customer experience that greatly increases transparency and understanding – so customers are happy, feel confident they’ve chosen the right product, and complaints will be lower.

Where to next?

The financial services sector needs to catch-up! Consumers have seen the banking industry evolve its customer experience, from receiving out-of-date monthly bank statements through the post, to allowing customers to manage their bank balances using a desktop computer. Today’s consumers access an even more streamlined process by carrying their bank accounts in their pockets, enabling them to make balance transfers, pay bills and much more, wherever and whenever they want.

For the financial services industry to flourish, especially in the investment and insurance sectors, companies need to make this leap. Today, the digital user experience plays a crucial sales and service role in financial services. It’s fair to say that those who do not invest in the quality of the user experience will be left in the wake of those that do. It’s important to create digital user experiences that fit into people’s everyday lives and the time of seeing digital as another distribution channels is gone – it’s now the most significant distribution channel.

Majid Shabir is CEO and founder of Instinct Studios.