Top 7 Challenges That Retail Banks Must Overcome To Boost Customer Loyalty

While tight regulations and newer technologies continue to influence the Retail Banking industry, perhaps the biggest challenge for the industry is to keep up with the fast paced & evolving expectations of customers. Banks are today serving a new customer, one who expects the same level of customer experience as he would expect new age digital consumer platforms in both banking and non-banking industries.

A customer’s relationship with a bank includes key points of decision-making from onboarding to problem resolution to maintenance of the customer, among several other touchpoints. 25% of customers rely on their Relationship Managers (RMs) and Customer Service Managers (CSMs), to research and select the right products, and 63% to resolve their problems. Expectedly the focus in most retails banks has shifted to enhancing the customer experience and build a culture of “Customer Centricity”. Of the 50 largest global banks, three out of four now pledge themselves to some form of customer-experience transformation.

However, before jumping in to understanding the desired state of customer experience we need to first understand what are the current challenges faced by both consumers and the providers of the customer experience.

At present, a Customer Service Manager has to deal with numerous customer complaints daily. A customer who walks into the bank has to queue up in front of the CSM’s desk for a five minute interaction, before being redirected to another department specific to the query. In most cases, these 5 minutes act as the deciding factor to whether a customer had a memorable, forgettable or unpleasant experience. Given the rise of the fintech industry and intense competition among retail banks themselves, it has become far easier for customers to switch loyalties and split their wallet share among several financial services providers. The new-age customer currently faces several challenges especially when it comes to adapting to faster and newer ways of banking.

Lack of a personalized customer experience

One of the biggest challenges is to provide a personalized and tailored experience to customers. This becomes even more challenging when it comes to virtual banking. Most banking applications have a standardized interface that fails to answer individual queries. Moreover, the rise of Virtual RMs (VRM) has provided an alternate source of frustration for consumers who get unsolicited calls from VRMs when they need no assistance. VRMs often fail to establish rapport and extend the call long enough to learn about the customer’s requirement or share how well they know the customer’s past banking history.

2. Falling short in resolving problems

Customer service officers are often loaded with too many requests and fail to provide the required attention to each customer. This often leads to poor & unpleasant experiences and may even cause customers to escalate complaints or worse switch banks altogether.

3. Slow service delivery

Another common customer service challenge is long turnaround times. Unsurprisingly, customers expect instant solutions and often lose patience while waiting in long queues or being redirected between teams.

While a wealth of research has been done on customer expectations, there has been very little focus on understanding why Customer Service Managers are unable to provide the desired customer experience. RM’s and CSM’s are likely to face their own set of obstacles that might prevent them from performing as per expectations some of which are outlined below:

1. Performance failures resulting in blame games

Customer-facing executives are constantly under the pressure of learning new products, processes while updating their knowledge about the existing ones. Thus, it is not uncommon for them to forget key information or fail to efficiently address the customer’s demands and queries. This often results in an internal blame game, thus hindering the customer experience.

2. Lack of flexibility due to high compliance

Very high compliance and process orientation can lead to executives having a lack of flexibility & empathy during customer interactions. .

3. Lack of a unified experience

Customer service executives and branch managers experience a lack of oneness with the bank. This feeling of belongingness and engagement plays a vital role in their performance and interaction with customers.

4. Lack of ownership

A lack of focus on the CSM’s and RM’s upskilling as well as conflicting performance goals & over complicated processes result in a lack of ownership of the customer journeys. Poorly defined parameters for assessing customer service amongst central teams and customer service managers might also add to a lack of ownership of customer journeys and TAT, resulting in poorly defined customer experiences.

The Desirable State of Customer Experience

According to Forbes “customers don’t care if you claim you have omnichannel or multi-channel capabilities. They only care that they can connect with you, the way they want to connect with you, and when they want to connect with you. They go through the channel that is easiest and most convenient for them..”

A consumer’s satisfaction is now contingent on the quality of engagement and not the differentiation of services and products. 60% of great customer experiences can be attributed to great customer interactions by the field force. How can Retail banks then step up and focus on meeting the customer’s needs by putting the RM & CSM as the cornerstone of a long-lasting customer in 2021?

Watch out for our next blog to learn more about how a leading private bank in India upskilled their Customer Service Managers to translate customer loyalty into increased upsell and cross sell revenue with Master-O.