Great Customer Experience Will Keep Banks in the Running

Traditional banks are in a tight race to win and keep customers. In an increasingly crowded field, banks face competition from new entries in the financial services arena. So, how can traditional banks keep their lead in a new marketplace?

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Recent data predicts that, by 2020, Customer Experience (CX) will overtake price and product as the key brand differentiator.  Can customer experience really mean as much as price? Let's look at the numbers.

  • 95% of companies fail to exceed the expectations of their customers. Source 
  • In just a few years 89% of businesses will compete mainly on customer experience. Source

The increasing presence of tech companies, start-ups and retailers in the financial services market has traditional financial institutions fighting to retain customers and stay relevant. These newcomers aren't wasting any time building their ranks and capturing customers with innovative payment and bank-like services.

The reality is, the needs and expectations of consumers have changed and banks that fail to innovate in response to these changes will lose out. Banks need to re-evaluate how they're doing business and how customers experience their products and services.

“Most new customers are now mobile or digital first as a result of the devices and apps that shape their lives. These products …have reshaped customer preferences and decision making. A great customer experience today requires an acceptance of these engagement models and building on them, rather than ignoring them.” reports Forbes

Just as the physical layout of a bank is meticulously designed prior to construction, banks can take a design approach to customer experience in order to meet changing needs and expectations.  In other words, banks should develop their offerings, services, omni-channel journeys and physical environment keeping the quality of the user experience at the forefront. Excellent customer experience often happens by accident but what if it happened by design? Imagine a bank experience designed around the customer, based on human experience design.

A Design Thinking Approach

Contemporary Design Thinking is a set of principles defined and popularized by Rolf Faste, an industrial designer and mechanical engineering professor at Stanford University, who expanded on the work of others in the field. He taught "design thinking as a method of creative action" and helped apply the principles it as a systematic approach for finding creative and practical solutions to problems. This process is often, though not exclusively, applied to experience design. One approach to design thinking is made up of five stages:

  • Empathize
  • Define
  • Ideate
  • Prototype
  • Test

By moving back and forth through these stages or applying them simultaneously to a problem, design thinkers can strategically plan, problem-solve and even beta test solutions.

For example, if a problem is customer dissatisfaction with branch wait times, you can move through this process to critically evaluate the current system and resolve inefficiencies. Similarly, if customers aren't satisfied with your existing technology offerings, don't just pick randomly from the myriad options at your disposal. Instead, use the phases of design thinking to critically analyze benefits, weaknesses and the appropriateness of each option.

Improvements made using design thinking principles extend far beyond simple process upgrades. This approach can bring about cultural changes and organizational improvements. Design thinking can improve the ability of banks and other businesses to give customers what they really need.