New banks and fintechs have differentiated their product and service offering by focusing on the customer experience – so raising the bar for the whole banking market. At the same time, customer expectations have changed, particularly influenced by positive experiences with online shopping and entertainment platforms. Customers across all banking sectors in Europe – retail, corporate, commercial and small and medium-sized enterprise (CCSB) banking – now have higher expectations for service delivery. They want it to be convenient, reliable and readily accessible.
The COVID-19 pandemic has also had an impact on banks and their customers. Banks have experienced shifts in revenue patterns, due to changing customer product needs. They have also had to adapt branch opening hours, while adjusting operations to rapidly increase at-home working. They have needed both to protect their own employees while also responding to the new challenges faced by customers, and the resulting increased requests for support. From the customer perspective, many individuals have suffered income shocks, whether through furlough or sickness. Many businesses have lost revenue, while also been focused on accessing government-backed support measures.
Banks have responded to higher demand for support through increased use of chatbots, virtual assistants and the direction of customers toward self-service solutions where possible. However, customers with more complex financial problems or those with limited access or experience with digital apps, have often wanted help to be given by a real person, resulting in long wait times for telephone support.
Such dynamics increase the spotlight on banks’ customer service organizations – traditionally operations with high staff levels and accompanying high costs. Banks recognize the need to optimize and reduce the customer service cost base – while simultaneously meeting customers’ expectations for a high-quality service experience. They need to transform their customer service operations to satisfy changing future customer needs, while also reducing costs now.
Transformation is challenging at any time. In a period when the demands made of customer service operations have dramatically increased – when firefighting to handle volume is the dominant challenge – transformation can be even harder to achieve. Nevertheless, it is vital that European banks make the space to think more strategically about future customer-service needs in a cost-pressurized environment – and what could be done now to meet those needs.