Customer engagement and financial services

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The financial services sector has not, it would be fair to say, done much to polish its reputation for customer engagement over the last few years. Given the storm of negative media headlines it has attracted for bad behaviour such as the mis-selling of complex insurance products, this is understandable.

However, if the sector is to recover from this malaise, financial services – especially those with retail and business lending functions – are going to need to develop their customer engagement strategies.

A host of potential approaches have been suggested, with the water somewhat muddied by the fact that high street banking is beginning to fall away to be replaced with online, phone and mobile services.

CRM will be vital in this new development, as marketers and customer service teams work hard to stay in touch with consumers despite there being less physical touchpoints with which to do so.

But how is engagement likely to develop over the coming years? A new report from KPMG has cast some light on the changes expected to take place.

Customer experience – a great opportunity

Jeremy Anderson, KPMG's global chairman for financial services, said that one of the greatest opportunities for sustainable revenue growth in what is still a complex market lies in improving the customer experience.

"Those that get it right will not only capture a greater share of new customers, they will 
also be better placed to keep their customers and extend their existing relationships," he explained.

He admitted that many service-based organisations are going to need to work hard to "scrub off the reputational stain" they have developed through recent mismanagement and bad decisions, but argued this only makes the opportunity bigger for those firms that can improve along this metric.

CRM and digitilisation will play a role in this development, argued Mr Anderson.

"Those heading down the road of automation and online services must continue to pay close attention to ensuring that their digitally-focused services are not just market leading, but that every customer interaction that underpins those services and relationships are the best they can be and support the brand values," declared the KPMG chairman.

Ultimately, CRM solutions can't be one-size-fits-all or badly implemented if firms are to see a strong return on investment or an uptick in engagement levels.

Working closely with a firm to ensure your customer relationship management software is tailored to your needs will help deal with any issues that arise.

Technology can also play a role in helping employees fulfil their potential and in 'choreographing' interactions efficiently, KPMG's report found. However, training staff to utilise such systems effectively is also key.

"While data, analytics and new technologies will be key, it will be those that are able to integrate their culture, business operations, data and technology that will be best positioned to create a truly customer-centric organisation," concluded Mr Anderson.

Four insights

KPMG revealed four main insights that service industries, particularly those in the financial sector, should bear in mind if they want to succeed in attracting new customers and retaining their existing ones.

Placing clients at the heart of how they operate is a good start, while understanding that a customer-centred approach will lead to an improved 'lifetime value' is also crucial, the consultancy giant posited.

The report also claimed that digital technology can play a big role in transforming the consumer experience, which makes sense as CRM technology becomes more sophisticated.

Finally, it reminded businesses that any engagement strategy will live and die on the quality of the people asked to carry it out, which is a good rule of thumb with any campaign planned by business executives.

A global issue

Customer experience and engagement is a global issue – Chinese consumers, for instance, recorded a rapid growth in their happiness with brand interaction as their market becomes more westernised.

Worryingly, British respondents recorded some of the most negative sentiments around engagement, especially for the banking and insurance sectors.

Customer engagement white paper