When a customer provides their personal information… they see it as similar to their capital or cash. Banks have a responsibility to safeguard this information, to use it in ways that will help the customer grow and develop through their life financially.
An import from the financial services industry, Salesforce’s recently appointed Regional Sales Director for Financial Services, Stuart Ward, now commands a bird’s eye view of an industry he knows all-too-well from the inside.
Following on from the release of the SaaS specialist’s The Customer Imperative in Financial Services report, co-authored with consultancy Bain, we sat down with Ward, a man who has long advocated for digital as a powerful customer engagement and retention asset, to gauge how he rates Australian FSIs’ Covid and post-Covid response, his concerns with the ‘sticky’ customer trope, the ethical minefields around the industry’s relentless pursuit of customer data insights, and what the local barista can teach the financial services industry about refining their CX.
FST Media: Keeping customers ‘sticky’ was once the defining mantra of customer acquisition and retention teams. As front-line services become increasingly digitalised (and built digital-native), and FSIs lose those face-to-face interactions, how can financial institutions build and maintain customer loyalty?
Ward: The word ‘sticky’ is almost disappearing from financial services. Instead, organisations want to be enjoyed, to be appreciated, and to be part of people’s lives.
People don’t get out of bed in the morning and think, ‘Gee, I want a mortgage!’ or ‘I want insurance!’ They’re more likely to want to protect themselves and those that they love; they’re concerned with being able to put a roof over their heads or to secure their future via an investment.
The role of financial services is really to help people navigate those moments in their life, being aware that those moments might be contemplated by their community.
That was difficult at first, because these were conversations that previously occurred in the branch; we might have had a relationship with our banker and shared our dreams and goals with them. Since we’ve moved increasingly digital, and indeed jolted by Covid to be entirely digital, the industry has had to look out for those triggers much more deliberately, be they changes in income patterns or sources of income or changes in expenditure that might signify a family composition change.
If the industry can offer personalisation through insight to help customers move towards their goals, that’s going to be appreciated far more than simply trying to make them ‘sticky’, particularly in creating lasting, deepening relationships.
FST Media: The Covid pivot has clearly dominated the industry’s priorities over the last two years, with most rating their digital shift a roaring success. Has this pivot, however, necessarily delivered a more humane, more trust-building approach to FSIs’ customer interactions?
Ward: The industry at large – and not only banking but insurance and superannuation collectively – has really helped Australia through this difficult period with, for instance, deferrals of loan payments, early access to super, and insurance policy relief.
The last couple of years have taught the industry so much about humanity.
We used what you might call a blunt instrument in that first attempt, with the industry mobilising lots of bankers to contact centres to check on customers’ wellbeing. What we’re seeing now, however, is data and insights playing a much bigger role in enabling the industry to be more targeted – for example, spotting those individuals who are showing signs of financial hardship.
It’s such a sensitive topic; it’s not like we’re automatically going to put them on an informational journey; maybe it’s a banker just reaching out to check whether the customer is okay: ‘We’ve noticed this change. Is everything okay? Would you like to discuss payment plans?’
It’s simply a matter of being more proactive and human in those processes, and Covid’s certainly taught us a lot about that.
FST Media: And, has this digital pivot necessarily led to a better customer experience?
Ward: I think so. We saw a couple of things. The first was that every bank had a banner – and probably still does – posted on their website about special Covid-19 provisions. What we saw was the very quick adaptation of remote digital working and work from home (WFH). But those difficult conversations also had to be had in the contact centre, because these weren’t things customers had seen before, nor were they things that a bank or insurer had seen.
In the initial stages of Covid, the customer experience probably suffered. Contact centres were seen by many businesses as a cost centre and therefore staffed in a way that, while probably quite efficient for normal times, with the deluge of enquiries during the early stages of Covid it saw blow-outs in response times and therefore dissatisfied customers. As the crisis played out and continues to play out, the industry has started to use more techniques to deflect some of those calls compassionately, using bots as well as better information up front to assess the volume and nature of calls and inform customers early so that they don’t need to call – that’s leading to better experiences.
Increasing the role of data and insights, and enabling it to be more targeted to help inform customers that are likely to need assistance, is another way that digital has helped through the crisis. But we’ve learnt a lot.
Having worked in the financial services industry previously, WFH was something that we’d very rarely do; it was a real treat, in fact. Now, it’s the normal way to operate for banks, and those that had adopted cloud and were more open to the ideas leading up to the crisis were in a way better position when it came to that quick ‘shelter in place’ that we all needed to do.
FST Media: How would you define the ideal customer experience for financial services consumers today?
Ward: A lot of us are nostalgic about the experience of getting our coffee order at the local café, being addressed by name by the barista and them already knowing the coffee we’d like. It’s no different when we visit a branch more than a couple of times – customers expect to be known.
The challenge in the past has been that these relationships have depended on being there in person. The trick with today’s bankers is that any interaction that happens in a contact centre, a branch, or in the digital realm on a website or chat interface, needs to inform a brand-wide memory of ‘Who is Patrick?’, for instance.
The next time you interact with the bank, they not only address you by name, but like the barista, they know what you last ordered, they know what fees you might have been charged, and you can have a conversation that is informed by any dealing you’ve had with them up until that point. That’s what customers expect.
Customers have been informed by the best digital experiences in the world, from Amazon to Uber and all those from the bigtech world. They know your history exactly and that history suggests what you, as the customer, might like to do next. I don’t see financial services being any different.
FST Media: Which, looking at the experience offered by those bigtechs, touches very much on that ambition across the wider industry to deliver a truly omnichannel experience. Why should this remain a foremost priority for FSIs?
Ward: When we set out to do research with Bain and Company, we surveyed more than 5,000 Aussies around their general banking and insurance enquiries.
We tracked a 50-point NPS [net promoter score] hit whenever they ask a customer to switch channels when they’re halfway through a job to be done, a journey, or an episode.
The key learning for us: it doesn’t matter if it’s an assisted channel – for example, a contact centre branch – customers need to be able to finish what they started regardless of the channel they’ve chosen. When you ask them to change, it’s a major hit for a net promoter score.
FST Media: Coming from the Netflix and Amazon experience, with customers able to step in or resume their journey at any point of their choosing, it is no doubt something many customers increasingly expect from all their digital experiences, irrespective of brand or service.
Have you noted any standout examples from the financial industry?
Ward: One from the local financial services space, in fact, where customers do so deliberately is with Athena Home Loans, one of our customers. They’ve got a team of loan experts who sit alongside a very streamlined digital loans application process; their role is to keep people engaged and confident as they move through the loan application process. When they nudge somebody to resume an application, upload expenses or employment details, they’re doing so much like this ‘Netflix experience’, which is, as we understand in this context: ‘You’ve gotten to this point in the process. Do you need help with payslips? Here’s how you get this done’.
The conversation doesn’t need to start again – they’re adding value at every step with that ultimate goal of getting more submissions in the portfolio. There’s still a role for humans, but humans, in fact, need to be informed by anything that’s happened previously in any channel.
FST Media: I do wonder how granular this mortgage assessment process response can really get. If someone, say, suddenly stops their digital application at a point where they need to enter their income, might this tip the lender off to potential issues with an applicant’s finances? And, with AI capable of dissecting these human cues, should they act upon this?
Ward: If I look back personally, my dad was a community banker. There were a lot of nonverbal behavioural cues he would take when assessing a loan applicant. These don’t translate too well to digital – I can’t see how you look as you’re filling in the digital form.
But things like attempts, amends, how long a customer remains on a field could, in fact, be an indication. And with some lenders, their AI and machine learning algorithms do take those things into account. Indeed, what machine learning can do is look at the credit portfolio performance down the track against some of those markers, like you suggested, to see whether some of those might be leading indicators, and then take those into account for subsequent applications.
FST Media: And, just going back to that realisation of true omnichannel and personalised service delivery (to really know or anticipate their customers’ life journeys), how far do you think the industry, including traditional players as well as neobanks, fintechs and insurtechs, have come?
Ward: When we talk about personalisation, trust often comes very close in that equation.
When a brand is able to give immediate value from the information they’ve requested or that’s provided as part of their recommendation, customers trust them much sooner. There’s a value exchange from there that can deepen.
That’s what’ll happen going forward for all banks, neos, and more traditional brands. You’ll start to see them being more impactful throughout the home buying journey – not just in financing, but also in providing more guidance and advice to something that they get exposed to way more often than the borrower.
FST Media: You mentioned lender Athena before as a standout service innovator. What can the big four lenders and traditional insurers learn from these smaller-scale digital pioneers?
Ward: When you’re lean and going to market, you’re just incredibly focused on each and every step of that application journey. These companies are constantly doing AB testing and have passionate team members assisting anywhere the borrower is likely to get stuck or full afoul of the application funnel. That obsession around – initially monoline – product design and services is something that fintechs generally do very well because they’re just so focused on a single product and they’ve noticed a niche in the market to go after.
We’ve seen a number of banks, including some of the big four, form ‘tribes’ that tend to be more cross-functional in their skills around, say, customer intent. That’s a very welcome sign that the banks are thinking in the same kind of way as brands like Athena.
FST Media: How can FSIs balance their priority to individualise or tailor services through customers’ personal data with the imperative to protect this data from misuse and loss?
Ward: That’s an awesome topic and one that’s continuing to develop. At Salesforce, we’ve got an office of ethical use of AI in technology for that very reason.
The outcomes of machine learning are often a function of the input data they’re trained upon. If there are biases in that data, they can often creep into and impact loan decisions, for example.
To quote from, of all things, Spider-Man: “With great power comes great responsibility”. When a customer provides their personal information, they’re starting to see this as similar to their capital or cash. Banks and the industry have a responsibility to safeguard that information, to use it in ways that will help the customer grow and develop through their life financially.
There have been regulatory instruments, like the Consumer Data Right (CDR), which have started to recognise the value of data, implementing things like customer consent so that data can be used by third parties. What I would expect moving forward is that the granularity of that consent be finer, so that consumers permit an organisation to use the data for the intended purposes and that any additional purpose would require a revisit of that consent. That’s where I think we’re moving towards – especially as we move from a read-only to a read-write CDR, with transactive behaviours that will require much, much greater scrutiny.
Looking at where it’s heading on the data side, I would expect brands with similar values to start to align around, as I mentioned earlier, home ownership. For instance, if I’m moving from Sydney to the Central Coast, I might agree to have my data shared, in a way that is secure, with a removalist company or with local schools or real estate agents that are trusted by the bank. That value-based bundling might result in a much smoother experience for moving home, providing a strong use-case for a shared party model.
FST Media: Finally, what is your secret sauce for FSIs to increase customer trust through their digital portals?
Ward: The industry generally has to demonstrate loyalty and gratitude for the relationship. They do so, as I illustrated with the ‘good barista’ analogy, by knowing their customers, by demonstrating that they know them, and by anticipating need and by confirming information: ‘Hey, we know that you like the almond milk cappuccino’, or, in the case of a bank, ‘We understand you’ve been making these repayments on time and in full. Thanks a lot for your loyalty!’
Any opportunity to demonstrate that and further this conversation is what customers expect, especially in low engagement, high apathy products like superannuation.
The opportunity for these organisations to ‘wow’ is massive, as is the opportunity for them to disappoint customers who so rarely engage with them.
(Fewer than once or twice a year in the case of many super providers). Demonstrating that you understand the customer, no matter the channel you’re engaging through, is where the industry must go.
My final point would be on the organisational nature of all types of financial services, which has been product-led for so long. Often, the data about your relationship sits across multiple teams and systems. Therefore, the role of what it means to be customer-centric is to elevate conversations beyond product and to start to see customers as they are, to see the entirety of their relationship, and to reward that. That takes organisational change, it takes technical change, and crucially, it takes passion and genuine alignment with customers from executives. ◼
To learn more about Australian customers’ evolving demands post-Covid and expectations around personalisation, read The Customer Imperative: Permission to Personalise report, authored by Salesforce and Bain and Co.