How to improve customer service in the banking industry

Great customer service is important in all industries. Remember, 80% of customers believe the experience a company provides is as important as their product or service, while 67% of customers are willing to pay more to receive a great customer service experience.

The banking industry is no exception. According to The Financial Brand, one of the primary emphases within the banking industry is “removing friction from the customer journey.” 61% of surveyed organizations rank this task in their top 3 industry trends, up from 54% last year. What's more, 72% want to enhance the digital experience for customers. As such, improving the customer experience appears to be more important than ever before in the banking industry.

On top of this, the banking industry faces a variety of challenges, from regulatory pressure, technological updates, and legacy systems, to competitor growth and restive customer base challenges. Plus, the industry will also continue to implement new strategies to enhance growth.

Experts predict customer expectations will increase, making it more critical to provide excellent service and support. In fact, 71% of banking executives believe that positive experiences in other sectors mean customers now expect more from their banking provider. In other words, if your business is part of the banking industry, enhancing your customer service should be your top priority.

With this in mind, we'll analyze how to improve customer service in the banking industry. We'll start by setting the scene with the current state of customer service in the banking industry, before moving on to look at proven methods for improvement.

The state of customer service in the banking industry

When you think of visiting a bank, an A+ customer service experience might not always be front-of-mind. For banks, reversing this perception is a major challenge.

To put this in context, as of 2020, just 29% of consumers trust their bank to look after their long-term financial wellbeing. This is down from 43% in 2018. Similarly, Lightico finds that customer satisfaction rates in the banking industry have fallen by more than 30% since 2012.

In addition, 69% of customers who plan to leave their bank say it was due to poor service rather than poor products, while 64% feel their bank’s mobile app does not allow them to solve a customer service question quickly — if at all.

Perhaps most alarmingly, McKinsey estimates that 10-40% of bank revenues could be lost by 2025 if customer experience gaps are not addressed.

Accordingly, Forrester finds that improving the customer experience (33%) is the top driver of organizational change in the banking industry, beating growing revenue (32%) and reducing costs (32%).

So, how can banks reverse these trends and improve the customer experience? We'll examine seven proven methods for improving customer service in the banking industry.

Proven methods for improvement

Implementing the right methods will make a dramatic difference when it comes to improving customer service in banks. In turn, this will help to attract and retain valued customers in a fiercely competitive market.

Empower your staff

With your employees on the front line of supporting customers, providing your staff with the necessary resources to effectively and efficiently meet customers’ needs is critical to your organization’s success.

While chatbots and AI solutions are becoming increasingly important in the banking sector, nothing quite beats the personal touch of an excellent staff member. According to J.D. Power’s 2022 U.S. Retail Banking Satisfaction Study, a majority of survey respondents (63%) still prefer one-on-one personal conversations with bank representatives, with only 37% favoring chatbots or text message (SMS) communications.

For example, if a customer approaches a bank employee with a question, but that individual doesn’t have the correct answer or a way of finding it, customer satisfaction diminishes along with the employee’s self-confidence. Instead of leaving your staff scrambling, empower them. Make sure your employees know where to turn for quick and accurate answers, and give them the technology required to search for up-to-date information.

It's also worth investing in learning and development for your staff so they can become familiar with your specific bank's policies and procedures while also increasing their general financial knowledge.

When you equip your employees with the right tools for success, you’ll notice a stark change in your workers’ level of self-confidence and morale. Empower your staff to handle customer interactions in any scenario, whether over the phone, via email, or face-to-face.

Implement advanced financial technology

Staying compliant with current laws and regulations while meeting ever-changing customer demand is perhaps one of the toughest challenges for the banking industry. By implementing the latest, most advanced financial technology, you can accomplish both goals.

Not only does innovative technology boost your support team's efficiency, but it also offers customers streamlined ways to perform various tasks. Combined, you’ll see an improved level of customer satisfaction and higher generated revenue.

Consider:

• Increasing security with eye scanning, voice or fingerprint identification, and other forms of biometrics.
• Selecting a more advanced option for mobile payments.
• Installing video technology to personalize the customer’s drive-through experience.
• Enhancing marketing using social media platforms to target customers in different geographic locations.

Financial literacy

Other than writing cheques, using an ATM card, and making deposits and withdrawals, a lot of people are not literate about banking, especially the younger generation and lower-income customers. However, this also applies to many middle-class bankers too.

Although it's a relatively new concept, some of the most successful banks and credit unions discovered the advantages of educating customers. Several incredible programs already exist for this purpose. For example, to teach young people what they need to know, the Junior Achievement program is fantastic.

Many banks and other financial institutions have also taken advantage of social media like YouTube and Instagram. In doing this, they're making access to financial education tools more accessible and in turn, helping their customers and potential customers become more knowledgeable.

As customers become more knowledgeable about the banking industry and its various services, their satisfaction improves. Why? Because they feel more empowered to make good, informed decisions about their finances.

For more insights on improving your financial literacy, check out this course on Financial Literacy for Managers.

Small business customers

Following the recent recession, small businesses want a bank or credit union that offers more than just loans. Instead, they want to build a long-term partnership with the bank or credit union they use. While lending money plays a large part in what your company does, you also need to become an advisor.

Along with providing your customers with a trusted source for information and advice, this fee-based service gives you a second revenue stream.

Customized solutions

Another way to improve customer service is to develop customized solutions. Banks and credit unions are not the only ones noticing an increasingly competitive banking industry. Customers see this as well, making them realize the financial institution they choose should offer something unique.

For example, 76% of customers now expect an omnichannel experience while 59% of customers expect on-demand, anywhere anytime customer service.

Customers know that the best financial institutions will take measures to improve their services, technology, and programs in response to stiff competition. This means that their expectations are even higher than before.

Creating customized financial solutions demonstrates that your business cares about every customer and will do everything possible to ensure each individual's satisfaction.

Personalization

Beyond customizing solutions, excellent training can teach your staff how to make the customer experience more personal.

In a recent survey by Business Wire, 72% of respondents rated personalization as “highly important” in the banking industry. Despite this, there is a major disconnect: 78% of respondents would continue using their bank if they received personalized support, but just 44% of banks are actually delivering it.

These findings should come as a major wake-up call to banks — offer more personalized customer experiences, or get left behind.

Personalization often comes down to paying close attention to detail, such as learning customers’ names and businesses.

Imagine if “Mr. Smith” visits his bank every Friday to deposit money for his “ABC” company. Walking in the door and having a receptionist or teller greet him by name or perhaps ask, “Is ‘ABC’ staying busy this holiday season?” will go a long way to improving customer service and satisfaction.

Prioritize employee training

No matter what strategies you implement to improve customer service in banks, you’ll need the right employee training to enable your new solutions. With Go1, you can access courses from the world’s top training providers on nearly any training topic, to help your employees provide customers with the best service.

For more insights, be sure to subscribe to the Go1 newsletter to stay on top of all the latest L&D trends. Or, you can book a demo today to find out how Go1 can help with your team’s learning needs.