Drive customer loyalty in banking through service excellence

By Javier Puga Chief Marketing Officer

Rewards or incentives, innovative products, and adequate security are important aspects when it comes to customer loyalty. However, one factor above all the others plays a pivotal role in securing long-term loyalty.

The fact is, once they turn from being a prospect to a customer, the quality of the customer service they receive is the primary factor in longevity.

The link between loyalty and emotion

The reason that customer loyalty is such an important factor has to do with the emotional response that individual customers have to service excellence. Issues like security, for example, only elicit emotional responses when something goes wrong.

As Deloitte puts it, “rationality kicks in with incidents that erode customer trust,” meaning that security and risk management is seen as a baseline “should have” component that only gets scrutinized when something goes wrong.

Something like customer service, however, directly influences the emotions of the individual, whether positive or negative. There are a few factors involved with this.

The quality of human agent support

In many scenarios, particularly ones that involve a big life decision, customers want to speak with a human agent. For example, if the individual is taking out a mortgage or another loan, they want the reassurance that only comes from people.

To meet expectations, the person on the other end needs to be friendly, helpful, and professional. According to one study, the quality of the support and the impact on a customer’s feelings is the main driver of customer loyalty. The customers who reported a positive experience were found to be almost five times more likely to make additional purchases, when compared to customers who had a negative experience.

The human agents themselves play an enormous role in delivering this user experience, of course. Banks, credit unions, and other financial institutions should look for people with high levels of emotional intelligence. This can include everything from self awareness and self regulation to strong feelings of empathy, motivation, and social skills.

A strong service system ecosystem

But even individuals who are naturally disposed to be excellent agents may struggle if they aren’t provided with the right tools and environment. Workplace stress, long customer queues, and an inability to ensure satisfied customers on a technical level can make even the most motivated and talented employees underperform.

The causes of service system problems

What causes agents to report high levels of stress and miss out on building strong relationships? The digital banking experience needs to work for them just as much as for the customers.

Channel overload

The most common issue that agents face is dealing with the high volume of customer inquiries. It’s something that we’ve seen time and again, such as with the Prague-based Raiffeisenbank and the Swiss Banca Dello Stato.

Both banks noticed that there was a higher than ideal number of phone calls, which is the traditional point of contact for customers. But phone calls aren’t always the best method for either the customer or the agent.

Say, for example, there is an issue that doesn’t actually require human support, like finding out how to send an international transfer. For an issue this simple, it is irritating for the customer to have to call and wait in a queue until an agent becomes available. Generally, they just want to make the transfer and move on.

Likewise, it is a distraction for the agent, who could be concentrating on offering high-touch advice that involves more emotional decision-making, and generally results in a purchase taking place.

Deflecting from the phone lines

In both cases, with Raiffeisenbank and Banca Dello Stato, the first step was to implement Conversational AI, which is a mixture of a chatbot and a Live Chat channel.

For both institutions, the results were very clear. Banca Dello Stato reported that 20% of all their support inquiries moved to Live chat, with an average AHT of seven minutes. Given that agents can handle two conversations at one time, this took almost a minute off the phone call AHT of four minutes thirty seconds for just one customer.

Raiffeisenbank, on the other hand, reported their agents being twice as productive with the Live Chat channel, achieving a customer satisfaction score of 4.1/5.

Inadequate support tools

But, despite positive customer feedback, Live Chat channels alone aren’t enough to ensure customer service excellence and boost long-term relationships. This is exactly what Raiffeisenbank found.

With a more efficient channel available for customer support, Raiffeisenbank found that there was an overall increase in inquiries.

Embracing chatbot support

Part of the solution involved doubling down on Conversational AI best practices to improve their chatbot offering. Chatbots have come a long way in recent years, particularly with the advent of Generative AI.

Instead of simply being a glorified FAQ, modern chatbots can provide increasingly human-like advice and effectively pre-qualify customers for more efficient human support. The result is a larger percentage of customers finding a resolution with the chatbot or a reduction in the AHT for agents, as the more mundane questions have already been dealt with.

High-touch Co-Browsing support

But let’s consider the other end of the equation. When a customer goes into a bank branch to talk with an agent, they sit at a desk and the agent walks them through every part of the agreement – say a mortgage, for example.

They will often print out the terms and conditions, using a pen to underline important areas or draw the customer’s attention to the numbers. Imagine this same scenario but there is a screen between the customer and the agent. The agent has to describe everything in perfect detail, and even then it is easy for the customer to get confused.

This is the experience of helping a customer over the phone. For issues that require high levels of collaboration, it’s simply unsatisfactory. This is where the combination of Video & Voice and Co-Browsing or Co-Apping become so useful.

Seamless experiences for digital conversions

When faced with a higher influx of inquiries due to improved service channels, Raiffeisen turned to Co-Browsing to improve operations. By implementing Co-Browsing into their support capabilities, Raiffeisen found that their agents were able to offer stronger customer service experiences.

This directly resulted in a four times increase in their digital sales conversion rate after nine months.

They began with around 12,000 Live Chat sessions, identifying roughly 6,400 as having the potential through personalized experiences to lead to a new upsell conversion. In the end, out of those conversations, 320 converted, representing a 5% conversion rate in August 2022. What’s more, the following September, this went up to 8%, showing that quality digital interactions are enough to increase your market share.

Drive customer loyalty through service with Unblu

Financial institutions, whether traditional banks, digital banks, credit unions, or more, can secure loyal customers through strong digital experiences. Customer expectations have undoubtedly developed where they require a personalized banking experience alongside innovative financial products to forge deeper connections with their institution. 

The pillar of building positive relationships with customers is the strength of the experience throughout the financial journey. Whether through the mobile banking app, Live Chat channels, or other digital channels, the agents need to be equipped with a wide range of digital banking service tools to ensure excellent customer experience. 

Meeting customer expectations in this way will lead to stronger customer relationships, more loyal customers, increased customer engagement, and ultimately higher levels of customer retention. 

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