Accessing bank products and services should be a simple, seamless experience – clean menus that don’t require countless clicks or tons of taps to access basic banking tasks. As banks pour more effort into improving experience, we find three missteps to be the most likely culprits when efforts fall short of the mark. How McKinsey became a bank CEO factory: ‘Boards prefer that sort of experience’ McKinsey partners are in vogue as banks face a fresh set of problems amid the pandemic. Some of the successful transformations we’ve observed have included customers in their design via a variety of techniques: structured interviews, customer panels, zero-based-design workshops, and executives spending time in call centers and branches to experience firsthand what customers encounter and to shape customer-centric responses. Reshaping the customer experience in retail banking 3 Banks that have recognized and attempted to satisfy these new demands are viewed positively by consumers.1 Yet while the majority of organizations cite customer experience as a top strategic priority, only a small fraction (30%) are actually allocating funds to understanding and improving it.2 A seamless customer experience can be worth at least as much as a superior product or efficient process—building customer loyalty, reducing costs, making employees happier, and boosting revenues significantly. One European bank established a rhythm of regularly recurring customer-journey improvements. Creating a pipeline of feedback and actions, rather than simply reporting metrics, is one way to ensure that the customer’s voice is always present in any transformation effort. Share. Our flagship business publication has been defining and informing the senior-management agenda since 1964. Internet retailers and other e-commerce players typically sit atop customer-satisfaction rankings. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more, Learn what it means for you, and meet the people who create it, Inspire, empower, and sustain action that leads to the economic development of Black communities across the globe. One bank saw an increase of 30 percent in sales when there was an appropriate and timely (24-48 hours) human response compared to a purely digital journey. Excellent customer experience starts with superior employee experience. Such a continuous-improvement regimen can help foster a superior customer-experience mind-set. Human interaction matters now—and 82% of U.S. and 74% of non-U.S. consumers want more of it in the future. 1Customer satisfaction was measured on a scale of 1–10; survey included up to three companies per industry per respondent. Resolving these barriers requires active sponsorship from the top. The entry of companies like Alipay, Amazon Cash, Facebook Messenger P2P, WeChat, and other services skilled at customer ease and experience may, in the longer term, disintermediate traditional banks from customer relationships and reduce banks’ distribution margins. Digital upends old models. In the context of COVID-19, banks can better serve customers in distress by enhancing support in the use of digital tools and new products and services. One payments player sought to improve its process of resolving customer disputes. In turning that commitment into a successful business strategy for banks, we find five elements critical to implementing a superior customer-journey and experience transformation at scale. In our experience we’ve found banks increasingly finding success with “at scale” transformation efforts. Reinvent your business. In order to provide senior management with a consistent way of discussing the status of journey redesign, bank managers set out to define a common “maturity” model that could be applied across all journeys. In the early stages, such transformations take advantage of cross-functional teams that work within existing roles and in parallel with reporting structures. One bank that undertook a customer-experience transformation concluded that the lifetime profitability of a satisfied customer willing to actively recommend the bank to his or her friends was five to eight times greater than one who had a negative perception. The common language achieved could then be used to broaden the customer-experience transformation across multiple parts of the organization. The work at level one was to establish a fact base behind prioritized customer journeys, for example, understanding what truly drives customer experience and satisfaction in securing a home loan. The role of customer care in a customer experience transformation. “The primary driver in emerging Asia is really the underlying potential and demographic growth we are seeing,” says Joydeep Sengupta, head of McKinsey’s Apac banking practice. Select topics and stay current with our latest insights, Managing a customer-experience transformation in banking. But data by themselves are insufficient. Analysis of the 50 largest global banks’ annual reports and investor presentations for the latest financial year; based on the S&P Global Market Intelligence list of banks by total assets. Our mission is to help leaders in multiple sectors develop a deeper understanding of the global economy. Our mission is to help leaders in multiple sectors develop a deeper understanding of the global economy. Download PDF. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more. While the overall transformation needs to be broken up into manageable work efforts, setting up for scale should be the goal from the first day. However, this is difficult to measure. One way is to set up a dedicated customer-experience organization within the bank. As value is demonstrated, larger and larger parts of the organization are included. Customer experience is often the deciding factor when it comes to banking. Analysis of the 50 largest global banks’ annual reports and investor presentations for the latest financial year; based on the S&P Global Market Intelligence list of banks by total assets. Come to McKinsey to do the best work, with the best teams and truly be at your best. The most successful customer-experience efforts apply a human filter to collected information to address key questions about the motivations and wishes of customers. Banking Needs a Customer Experience Wake-Up Call Subscribe Now Get The Financial Brand Newsletter for FREE - Sign Up Now The "Improving Customer Experience in Banking" report shares the results of a global survey done to determine the CX maturity of banks and credit unions. In all cases, the CEO must make customer experience a priority, and in some cases the appointment of a chief customer officer can serve to underline that commitment. Similarly, gathering and segmenting data are classic starting points in understanding customers. That makes it crucial that the technology supporting human interaction is unobtrusive and works seamlessly across platforms. One US payments company, for example, used fine-grained customer feedback, coupled with advanced analytics, to identify customer pain points that were driving problem calls to its call center. Against this deeper understanding of the sources of customer experience, the team was then able to put in place an iterative process of developing and testing rapid prototypes of minimum viable products and refining knowledge with each new application. At the third level, the team mapped pain points to the underlying elements for each critical step in the journey and their importance to overall customer experience. Please click "Accept" to help us improve its usefulness with additional cookies. To capture the opportunity, incumbents should embrace a new operating model that dramatically improves the digital customer experience. Without an explicit link to and inclusion of the customer, no transformation will ever be fully right. They also include commitment to a bottom-up feedback loop to measure progress and involve employees in implementing and refining improvements. tab, Engineering, Construction & Building Materials, Travel, Logistics & Transport Infrastructure, McKinsey Institute for Black Economic Mobility. People create and sustain change. What are people saying online? Improving customer journeys is not a linear process. collaboration with select social media and trusted analytics partners To help, a recent McKinsey article sheds some interesting light on shifting consumer behaviors following the crisis. Monitor and optimize the customer experience across all your touchpoints to understand customer behavior and deliver personalized, premium experiences for banking and credit union customers. The end result: a set of actions that encouraged earlier, better conversations with the customer on price. 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