70% of financial sector boards don’t prioritise customer experienceby
Despite numerous studies proclaiming the need for more positive customer experiences, financial sector executives are still unconvinced about investing in improving strategy and tech in the field, a new study from Collinson Group reveals.
The opinion in the boardroom is only marginally improved by views held at senior management level, too – 48% of senior managers say the top priority for the year ahead is to improve customer experience, while in comparison, just 29% of executive boards state the same.
The findings are part of an international study of over 300 financial services board members and senior management. They also state that only 14% of senior managers and 29% of the board see recognising and rewarding existing customers as key to achieving their goals over the next 12 months, and that regulatory pressure (65%) and modernising older technology systems (54%) in order to compete are of far greater importance.
“This misalignment is due to the differences between the responsibilities of board and senior level management,” says Christopher Evans, director of Collinson Group. “The board are required to have a longer term view of performance and are accountable for longer term profits, whereas senior management are tasked with delivering quarterly and annual targets.
“This is particularly prevalent in the wake of reduced interchange fees due to come into effect in 2016, which are cited as a key concern among board members. Senior managers are instead grappling with updating legacy IT systems in order to improve the customer experience.”
The research is in stark contrast to a recent statement by Sam Keninger, director of product marketing at Medallia, who told Mycustomer that getting closer to customers was the number one issue on on this year’s Conference Board survey of CEO priorities, whereas three years ago, it wasn’t even in the top five.
“On one level, it’s getting easier to get c-level meetings on the topic of the customer experience,” he said. “It’s also led to more executive adoption of customer experience management systems, and to a greater focus on CEM in general. When you have people at the top involved, CEM-related initiatives become more strategic, more multichannel, and encompass more of the organisation.”
However, Evans adds: “Although the focus for board and senior management appears different, the solution is the same. Banks and the financial services sector will be able to better combat the pressure of reduced interchange fees and drive increased customer profitability if they firstly, invest in customer insight to better understand their customers and secondly, seek to add value at all customer interaction points in a relevant way.
“Delivering value is not only important to retain customers but also in terms of customer acquisition, It takes time to achieve high levels of customer engagement, so it is important for banks to build the foundations now. For this to succeed, it needs endorsement at the highest level, insights need to be shared across the organisation, and the process of improvement needs to be integral to the organisation and continuous.
“We encourage banks to act now if they are to counter the stark reality of reduced profitability or risk being left behind by competitors who do prioritise customer experience.”
Chris was an Editor at MyCustomer from 2014 to 2022. He is a practiced editor, having worked as a copywriter for creative agency, Stranger Collective from 2009 to 2011 and subsequently as a journalist covering technology, marketing and customer service from 2011-2014 as editor of Business Cloud News.