Top 7 Customer Experience Trends in Banking for 2021

 The coronavirus crisis radically magnified the importance of CX in the banking sector, with a heavy emphasis on digital channels. Here are the major trends banks and credit unions must prepare for that will define the "new normal" in the year ahead.

By Jim Marous, Co-Publisher of The Financial Brand, CEO of the Digital Banking Report

Customer experience has always been defined as the consumers’ perception of how your organization treats them. These perceptions are based on each individual’s own priorities, and they impact each person’s level of engagement with your financial institution and their future buying decisions and loyalty.

In other words, if your institution gives them positive experiences, they will continue to do business with you, increase the scope of their relationship, and recommend your bank or credit union to others. Beyond simply resulting in more transactions, positive experiences translate to trust and the potential exclusion of competitors when consumers decide who to give their business to next time.

When Digital Banking Report asked financial institutions globally about their top strategic priorities through 2021, improving the customer experience came in second only to focusing on digital transformation. This is understandable, given the almost immediate shift to digital channels caused by the pandemic.

The foundation of an improved customer experience is the need to know your customers, understand their behavior and needs, and reward them for their relationship. This “reward” is often not in points or special offers as much as is it in the ability to provide contextual guidance and financial recommendations based on real-time needs and opportunities.

The key is to use data and advanced analytics not just to know the customer within the organization, but to continually illustrate to the customer that you understand their customer journey. Without the deployment of insights for communication to the customer, the most important component of customer experience is missed.

The good news is that when you improve the experience from your customers’ perspective, there is proof that your organization will improve satisfaction, increase sales, expand depth of relationships, increase retention, and positively impact your institution’s bottom line.

When we look at the major customer experience trends for 2021, clearly the pandemic impacted expectations. It is also clear that the importance of positive customer experiences has never been greater. While some of the trends for 2021 are extensions of what we have seen in the past, others are new expectations caused by the combination of digital, economic and social changes we have seen in the past 12 months.

1. Speed and Simplicity Rule. Customers will no longer base their experience perceptions solely on price, product or convenience. Instead, expectations will be based on digital speed, simplicity and contextuality.
2. Channel Uniformity Assumed. More than ever, consumers will expect a consistent experience across all channels and platforms, in real-time.
3. Design Matters. Consumers will make a decision whether a website or mobile app is right for them in milliseconds based on the design alone.
4. Proactive Personalization Required. The importance of personalization and proactive recommendations has increased significantly as consumers have become used to the experiences of digital tech firms like Amazon, Netflix, Google, and numerous new fintech players.
5. Sustainability Increases in Importance. Consumers will expand their evaluation of experience with financial institutions to include social components that include community investment, gender and racial equality and other sustainability issues.
6. Technology as an Enabler. While consumers want the impact of what advanced digital technology can provide, they will mostly want things to work … quickly and without friction.
7. Customer Impatience Grows. The impact of a poor customer experience will be faster and more dramatic than ever … and often undetectable initially.

1. Speed and Simplicity Rule the Customer Experience Race

When we look to a pandemic-impacted customer experience criteria set, digital simplicity and speed of engagement — rather than clever words and expanded product options — will drive trust, loyalty and retention. In the future, simpler experiences will be viewed as more valuable to consumers, with the majority of consumers willing to pay a premium for it.

Google, Netflix, Apple and Amazon are all brands built on services that are highly complex in terms of digital capabilities, but ultimately offer solutions that are tailored to users and make their lives easier via simplicity. That is where competitive differentiation will be achieved in the future. However, while clarity will help set competitors apart, financial institutions will still need to simplify products, redefine back-office processes, and provide straightforward customer communication.

At a time when people have less free time and increased decision-making responsibility, a culture of simplicity demonstrates customer centricity. When simplicity and clarity are the primary objective for an organization, the customer will feel in control, bolstering their confidence and providing peace of mind.

2. Channel Uniformity Is Assumed and Institutions Must Adapt

Today’s consumer no longer distinguishes between digital or offline engagement, and interacts with their financial institution through different touchpoints. These touchpoints will change over time based on where a customer is and what else they may be doing.

The same transaction may be accomplished online, using a mobile channel, in a branch, with a call center representative, on a voice device or even using a video channel. Whatever option the consumer selects, they will expect to have the same brand experience – in real time – every time. In a digitally enabled world, banks and credit unions must adapt to this expectation of uniformity of the buying and contact experience.

When we add the need to personalize the experience in real time, financial institutions will be dealing with a new approach to the customer which requires a significant transformation of current internal processes. Part of this transformation will be the monitoring and measurement of the customer experience across the entire customer journey.

3. Design Matters And You Can’t Blow It Even Once for Most Consumers

A bad online or mobile experience can significantly damage your brand and the potential for sales and future engagement. For example, 57% of customers won’t recommend a business with a poorly designed website or mobile app. And if a website isn’t mobile-friendly, 50% of customers will stop visiting it, even if they like the business.

What is amazing is that it takes about 50 milliseconds for your customers and prospects to form an opinion about your website that determines whether they like it or not — whether they’ll stay or leave. That opinion is developed even faster for a mobile app.

Remember, for any given search query, there are dozens or more search results that fit the needs of the user. With the consumer scrolling for the best fit for any inquiry, they will determine which firm to do business with based on first impressions. And these impressions are usually being made from a mobile device.

So, if you can focus on the redesign of any of your platforms, start with the mobile app. Our research has shown that the biggest banks are redesigning their mobile platforms at a much greater frequency than their website.

4. Proactive Personalization Required

Just knowing who your customer no longer suffices. As a result of the many new digital interactions consumers have experienced since COVID disrupted life, people now want you to be in a position to help them manage their money like a GPS system manages direction to a destination.

Banks and credit unions will take information from past interactions, combined with internal and external insights to use it to instantaneously customize the customer’s experience. Amazon’s recommendation engine and Netflix’s intelligent viewing algorithm are excellent examples of how this will play out.

While remembering what a customer did in the past is a good start, the proactive personalization capability will also need to optimize the customer’s journey on their behalf. This includes building new customized solution sets that will optimize financial outcomes, similar to how a GPS system changes the recommended route due to real-time changes in traffic patterns.

Part of the proactive personalization process will include focusing on how an investment in journey mapping improves the economics of delivering products and journeys to a customer segment — and how powerfully it reinforces engagement – as opposed to just how it drives sales or reduces costs.

5. Sustainability Increases in Importance

The global health challenges and social justice protests over the summer highlighted the importance of creating a customer experience that reflects the broader scope of sustainability. Globally, consumers will expect banks and credit unions to operate in a way that supports community investment, social and gender equality and even environmental issues.

As more consumers seek out firms that meet their own personal values on social, economic and environmental issues, financial institutions will need to put words into action that customers see as part of the organization’s brand and culture.

According to a 2020 survey, customers are most likely to return to a brand for the product’s quality, but sustainable business practices come a close second. In fact, 68% of consumers say they’re motivated to be loyal to a brand by knowing that they share the same values.

Sustainability isn’t just about switching your own organization’s practices to become more socially aware, environmentally friendly or ethical. Going forward, consumers want you to help them behave more sustainably, too.

6. Technology as an Enabler of Superior CX

While technology will be an important component of the overall customer experience, it will not be what consumers look to when assessing how well an organization is doing. The technology that drives an experience will be invisible.

According to PWC, “Customers expect technology to always work (and are unlikely to take note of new technology unless it malfunctions or interrupts the seamless, friendly experience). They want the design of websites and mobile apps to be elegant and user-friendly; they want automation to ease experience. But these advances are not meaningful if speed, convenience and the right information at the right time are lacking.”

Investing in the next shiny object is not a winning strategy. Financial institutions need to decide which digital tools to use after business objectives are established and leadership commits to integrating the technology, people, process and culture to support the consumer experience.

The customer experience needs to be designed from the outside in and built from the inside out. This means that technology is determined once the customer provides input and processes are reset for digital.

7. Customer Impatience With Substandard CX Grows

The impact of a negative experience will be faster than ever before, possibly without the opportunity to get it right once a customer becomes upset.  One in three consumers (32%) say they will walk away from a brand they love after just one bad experience, according to PWC.

Adding to this impatience are the countless options consumers have at their fingertips. If your bank or credit union doesn’t immediately appeal to them, another brand certainly will. According to recent research, 29% of mobile users will switch to another app or website if they fail to find what they are looking for within three seconds. With so many new products and services available, once a consumer starts shopping, they already know the experience they want.

An additional warning: When a current customer becomes disenchanted, they may not tell you, and they may switch providers without formally closing their current relationship. In other words, in a digital world attrition may be both invisible and non-negotiable.

Where Financial Institutions Should Start Their CX Rebound

No financial institution can achieve digital banking transformation or improve all components of customer experience overnight. The best strategy is to start with looking at what your customers expect from you in a pandemic-impacted world.

While they may have been satisfied with the almost instantaneous digital transformation you did when the physical world shut down in early 2020, new, much more elevated expectation lie ahead. Find the best opportunities to create fast, simple and customized digital experiences that enhance the overall customer journey.

Use the same level of urgency and crisis management to create differentiated experiences that provide a competitive advantage in 2021. While much about the future remains unknown, it is clear that financial institutions that prioritize the integration of digital and CX will be best positioned for it.

https://bit.ly/2PEKptq

Biggest Emerging Markets Banks 2015

ANDREW CUNNINGHAM

It is not even close: The 12 largest emerging markets banks in the world are Chinese.

A BIG COUNTRY WITH BIG BANKS

China’s increasing prominence on the world financial stage has been proven yet again: Of the 50 biggest emerging markets banks in this year’s ranking, the top 12 are all Chinese. The biggest of the big is Industrial and Commercial Bank of China, which boasts assets of $3,368 billion. That total also qualifies ICBC as the largest bank in the world—even when compared with developed market financial institutions.

In all, 19 Chinese banks make Global Finance’s list of the 50 biggest emerging markets banks, ranked by 2014 asset size. That’s the same number as last year.

The combined assets of the 19 banks was $20,145 billion, up 13% from 2013. In contrast, the combined assets for non-Chinese banks in the Biggest 50 list declined slightly, down to $6,585 billion.

The biggest emerging markets bank in the world that doesn’t happen to be Chinese is Banco do Brasil, with $481 billion in assets as of the end of 2014. Sberbank of Russia is next, with $448 billion.

There are five new entries on this year’s list: CTBC Bank and Mega International Commercial Bank, both from Taiwan; National Bank of Abu Dhabi; India’s Punjab National Bank; and Malaysia’s Public Bank. The five who fall out of the list are Vnesheconombank and Gazprombank, both of Russia; Taishin Financial Holding, of Taiwan; Standard Bank of South Africa; and Korea Finance Corporation, which is not included because it merged with Korea Development Bank in December. As a result of the tie-up, Korea Development Bank’s assets grew by 60%, moving KDB up 11 places to become the 25th-largest emerging markets bank in the world.

South Korea contributes eight of the world’s 50 largest emerging markets banks, and Taiwan contributes three. When combined with Chinese banks, these three Asian countries contribute 30 of the biggest 50.

Six banks from Brazil make the list, four from India and three from Turkey. Malaysia and Russia each have two banks in the ranking.

BIGGEST EMERGING MARKETS BANKS 201­5
Rank	Bank	Country	Total Assets USD Mln
1	Industrial and Commercial Bank of China	China	3,368,190
2	China Construction Bank	China	2,736,416
3	Agricultural Bank of China	China	2,610,582
4	Bank of China	China	2,492,463
5	China Development Bank	China	1,685,954
6	Bank of Communications	China	1,024,399
7	China Merchants Bank	China	773,301
8	Industrial Bank (China)	China	720,118
9	Shanghai Pudong Development Bank	China	685,721
10	China Citic Bank	China	676,387
11	China Minsheng Bank	China	656,175
12	Agricultural Development Bank of China	China	513,517
13	Banco do Brasil	Brazil	481,299
14	Sberbank	Russia	447,947
15	China Everbright Bank	China	447,297
16	State Bank of India	India	431,391
17	Itaú Unibanco	Brazil	424,463
18	Caixa Econômica Federal	Brazil	400,920
19	Export-Import Bank of China	China	386,953
20	Ping An Bank	China	352,427
21	Banco Bradesco	Brazil	350,373
22	BNDES	Brazil	330,328
23	Hua Xia Bank	China	302,603
24	China Guangfa Bank	China	269,334
25	Korea Development Bank	South Korea	252,231
26	KB Kookmin Bank	South Korea	250,572
27	Bank of Beijing	China	249,132
28	Woori Bank	South Korea	245,754
29	Shinhan Bank	South Korea	232,554
30	VTB Bank	Russia	216,693
31	Industrial Bank of Korea	South Korea	199,910
32	Banco Santander Brasil	Brazil	195,888
33	Bank of Shanghai	China	194,060
34	Nonghyup Financial Group	South Korea	192,531
35	Maybank	Malaysia	183,205
36	Hana Financial Group	South Korea	156,877
37	Bank of Taiwan	Taiwan	146,756
38	Qatar National Bank	Qatar	133,614
39	ICICI Bank	India	131,981
40	Türkiye Is Bankasi	Turkey	118,818
41	Bank of Baroda	India	117,266
42	National Commercial Bank	Saudi Arabia	115,967
43	Ziraat Bankası	Turkey	109,009
44	CTBC Bank	Taiwan	107,839
45	Garanti Bank	Turkey	106,442
46	National Bank of Abu Dhabi	UAE	102,409
47	Korea Exchange Bank	South Korea	102,192
48	Punjab National Bank	India	101,614
49	Mega International Commercial Bank	Taiwan	99,167
50	Public Bank (Malaysia)	Malaysia	98,919

Source for asset figures: Fitch Solutions

Biggest Global Banks 2015

ANDREW CUNNINGHAM

Chinese banks are assuming an increasingly important position among the world’s biggest banks. But European banks are still the largest geographic grouping in our rankings.

THE BIG GET EVEN BIGGER

At the end of 2014, the first, second and fourth-largest banks in the world, ranked by assets, were Chinese. HSBC was the third-placed bank.

The 10 Chinese banks included in last year’s list of the world’s Biggest Global Banks have all moved up the rankings (with the exception of Industrial and Commercial Bank of China, which was first last year and retains that position this year). Industrial and Commercial Bank of China remains the only bank in the world with more than
$3 trillion in assets at the end of 2014. China Minsheng Bank enters the top-50 ranking for the first time this year, taking the total number of Chinese banks in the top 50 to 11.

Despite the increasing importance of Chinese banks, European banks still make up the largest geographic group within the 50 Biggest Global Banks. Twenty-one European banks from eight different countries feature in the 2015 list, two fewer than in 2014: KfW and Danske Bank dropped off the list this year.

The profile of the 21 European banks that feature among the world’s 50 largest is very different from the profile of those European banks that feature among the world’s 50 safest. European banks hold the first nine places in the ranking of the World’s Safest Banks, but none of these now features among the world’s biggest. (Last year, KfW was placed in both rankings.) Four Nordic banks feature among the World’s Safest this year, but only one, Nordea, makes the Biggest Global Banks.

The United States contributes seven banks to the biggest 50 ranking this year, one more than last year, as a result of the inclusion of Prudential Financial. Japan and Australia contribute four each and Canada three—in all cases, the same number and the same banks as last year.

The combined total assets of the biggest 50 banks in the world was $68,994 billion at the end of 2014, marginally higher than the $68,488 recorded a year earlier. The increase in the size of Chinese banks was offset by declining asset sizes at many eurozone banks (the euro lost 10% of its value against the dollar during 2014) and Japanese banks (for whom a similar devaluation took place).

In this year’s rankings the 50th-placed bank, China Minsheng Bank, had assets of $656 billion. In 2014’s rankings, the 50th-biggest bank, Danske Bank, had assets of $596 billion.

BIGGEST GLOBAL BANKS 2015
Rank	Bank	Country	Total Assets USD Mln
1	Industrial and Commercial Bank of China	China	3,368,190
2	China Construction Bank	China	2,736,416
3	HSBC	United Kingdom	2,634,139
4	Agricultural Bank of China	China	2,610,582
5	JPMorgan Chase	United States	2,573,126
6	BNP Paribas	France	2,522,471
7	Bank of China	China	2,492,463
8	Mitsubishi UFJ Financial**	Japan	2,391,680
9	Crédit Agricole	France	2,140,055
10	Barclays	United Kingdom	2,119,410
11	Bank of America	United States	2,104,534
12	Deutsche Bank	Germany	2,074,424
13	Citigroup	United States	1,842,530
14	Wells Fargo	United States	1,687,155
15	China Development Bank	China	1,685,954
16	The Royal Bank of Scotland	United Kingdom	1,640,023
17	Societe Generale	France	1,588,163
18	Sumitomo Mitsui Financial Group	Japan	1,542,204
19	Banco Santander	Spain	1,537,327
20	Mizuho	Japan	1,534,259
21	Sparkassen-Finanzgruppe (Sparkasse)	Germany	1,523,129
22	Groupe BPCE	France	1,485,126
23	Lloyds Bank	United Kingdom	1,334,316
24	ING	Netherlands	1,205,361
25	UBS	Switzerland	1,074,187
26	UniCredit	Italy	1,024,909
27	Bank of Communications	China	1,024,399
28	Credit Suisse	Switzerland	931,617
29	Goldman Sachs	United States	856,240
30	TD Bank Group	Canada	837,909
31	Royal Bank of Canada	Canada	834,191
32	Rabobank	Netherlands	826,862
33	Nordea	Sweden	812,604
34	Morgan Stanley	United States	801,510
35	Intesa Sanpaolo	Italy	784,785
36	Norinchukin Bank	Japan	779,396
37	China Merchants Bank	China	773,301
38	National Australia Bank	Australia	773,062
39	BBVA	Spain	767,199
40	Prudential Financial	United States	766,655
41	Commonwealth Bank of Australia	Australia	745,527
42	Standard Chartered	United Kingdom	725,914
43	Industrial Bank	China	720,118
44	Bank of Nova Scotia	Canada	714,560
45	Shanghai Pudong Development Bank	China	685,721
46	Commerzbank	Germany	676,956
47	China Citic Bank	China	676,387
48	ANZ Group	Australia	675,733
49	Westpac	Australia	674,639
50	China Minsheng Bank	China	656,175

Source for asset figures: Fitch Solutions, except for ** from bank’s financial statements