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The banking and financial services industry is changing faster than ever as a result of customer demands and market innovation. The growth of a global financial technology industry has created an alternative to traditional banks and has been largely driven by startup companies creating solutions entirely designed around the customer.
In addition, there has also been a wave of challenger banks that are offering all the services of traditional banks, but without the branch network. Atom bank and Monzo are both good alternatives – offering a complete banking service, but entirely based on smartphone apps. Atom Bank is demonstrating an interesting approach.
But apps have become an essential part of the user experience, even for the traditional retail banks. Forty five percent of all adults in the UK now use a banking app and if you only ask the millennial demographic then this figure soars to 72%. Banks have acknowledged that customers want easy access to services via their phone and have invested heavily in the apps that they offer to customers.
A recent study published on Customer Think explores what British bank customers really want from their bank – what type of customer experience is expected and is this now a genuine area where one bank can differentiate itself from the competition?
The bottom line is that investment in the customer experience pays. Customer Think shows that HSBC and First Direct have the lowest ratings of UK banks when analysed by customer sentiment. Natwest and Barclays score the highest and it’s no surprise to learn that these banks are investing heavily in their customer apps and the overall experience their customers enjoy.
The study notes that customers have become more demanding. It’s no longer good enough to offer an app that lets customers check their balance and pay bills. They now expect almost all banking services to be available 24/7 from their phone, including loan applications and spending analytics. The important feedback from the Customer Think research is that this is now a strong enough driver to push customers to banks that do offer a better service. Once again, the functionality offered by Natwest is seen as the best in the retail banking sector, with 85% of customers viewing their service positively.
The study goes into detail across various other areas of customer service, but I think that one other key factor worth mentioning as a summary is that most customers believe that the quality of service they receive from their bank is the strongest driver of positive or negative sentiments towards that brand. This is important to remember for any bank that wants to remain a major player.
The customer experience is now the major driver of how a customer feels about the brand. In retail banking today, negative experiences are pushing customers to switch brands more than ever before. In fact, it can be seen in the Customer Think study that investment by Natwest in improving their app has directly lead to more satisfied and loyal customers and is attracting customers from other banks.
A few years ago great banking service was all about the in-branch experience, now the focus is on the functionality of apps. Times have changed. This white paper explores how technology and regulation are impacting the UK retail banking industry. Will the banks keep up? Let me know what you think in the comments or get in touch via LinkedIn.