As consumers are getting more comfortable with making financial transactions online – from ordering grocery to banking and purchasing insurance – the market is also becoming more competitive for financial institutions (FIs.)

You aren’t just competing with the bank down the block or the credit union in the next town. While you have the opportunity to access a national or even international clientele, you’re also competing against other FIs from around the globe.

How can you stand out?

The financial industry is highly regulated and many consumers consider most financial products as a commodity.

Simply coming up with a slightly different product or a marginally better pricing is no longer enough to set you apart in this competitive landscape.

Thankfully, there’s a gap in the market and if you fill it before your competitors do, you’ll set your brand apart and gain market share.

Customer Experience: the New Frontier

Consumers are willing to pay more for a better customer experience (CX), which will become the key differentiator, overtaking price and product by the year 2020.

Customer Experience Statistics


Your customers have developed high expectations when they interact with other consumer brands that deliver a user-centric customer experience.

In addition, the line between online and offline is blurring. Customers want a seamless omnichannel experience even when they switch channels or devices while interacting with a brand.

However, the financial industry has lagged behind in delivering an outstanding customer experience. Many FIs fail to meet customer expectations and consumers are increasingly frustrated with the industry.

A report titled “Improving the Customer Experience in Banking” found that only 37% of organizations have a formal CX plan.

While many FIs are starting to invest in CX initiatives, they’re still facing a lot of challenges in the implementation – especially with data analytics, technology, and the creation of a 360-degree customer view.

In addition, most FIs still approach CX from the perspective of internal benefits (e.g., cost cutting, increasing sales) instead of customer benefits (e.g., ease of use, responsiveness), which is the key to delivering a customer-centric experience.

How Financial Institutions Can Improve Customer Experience

To successfully deliver an excellent customer experience, you need to shift the focus of your organization’s digital engagement from cost reduction to experience enhancement.

Focus on building trust and developing relationships with your customers throughout the entire customer journey – engaging them from the moment they’re researching about a financial product, to opening an account and becoming an advocate for your brand.

Here are some ideas for designing an engaging CX that will improve customer acquisition and retention:

Create an Exceptional Mobile Experience
More and more customers are engaging with FIs via mobile devices. For example, 49.5% of all online searches for life insurance and 42.1% for over-50s life cover came from mobile devices, according to Alex Koslowski, head of proposition in the consumer division at Royal London, the UK’s largest mutual insurer.

To capture these customers, develop a mobile-optimized website that’s not only responsive but also utilizes mobile-specific features such as tap-to-call, location service, and auto-fill to streamline the user experience.

You can also create a mobile app that enables customers to carry out specific tasks quickly and easily, e.g., pay bills or deposit a check.

Barclays Mobile Banking won two FStech Awards for a feature that enables customers to call the bank directly from the app and introducing instant lending on a mobile device.

Use Engaging Content To Simplify Complex Processes
Many consumers are intimidated by the complexity and variety of financial products. FIs can create interactive, educational, and engaging content, e.g., a quiz or product selector, to help customers understand their needs and choose the best products.

Streamline your online application processes by simplifying product configurations and pricing structure.

In addition, you can use gamification to increase customer engagement and loyalty.

Deliver a Consistent Omnichannel Customer Experience
Customers want a seamless experience when they interact with your brand across all touchpoints and devices.

Develop a centralized database for storing your 360-degree customer profiles, which can be updated in real-time as customers interact with your brand on multiple channels.

With the development of a single customer view, you’ll also have the opportunity to leverage advanced analytics, machine learning, and contextual engagement to be proactive about your advisory and sales activities and deliver a highly personalized experience through your customers’ preferred channels. Defining an audience


How To Optimize Customer Experience Cost-Effectively [ Case Study ]

Creating an exceptional customer experience is a sizable undertaking that involves many moving parts.

What can you do to ensure that your CX initiative is achieving the desired customer experience and the associated business objectives?

Security Service Federal Credit Union (SSFCU) is an $8 billion member-owned organization. It’s the largest credit union in Texas and the 8th largest in the nation, serving more than 700,000 members worldwide.

As more members choose to self-serve online, SSFCU needed to offer high-quality service in their digital environment. SSFCU had to take its website usability and online service capabilities to the next level quickly and effectively.

SSFCU worked with UserReplay and used advanced technologies such as machine learning, a variety of CX analytics, and patented interactive user session technology, to define and improve their CX strategies.

As a result of this collaboration, the credit union reduced the time it needs to identify and fix CX issues by more than 50%. They’re able to act on critical issues immediately to minimize the overall impact on the business.

In addition, they have the ability to test new products and services with their members before spending the time and resources to bring them to market so they can maximize ROIs.

With the aid of advanced analytics and technologies, you can now take the guesswork out of implementing CX initiatives for your financial institution and make data-driven, informed decisions.

SSFCU Webinar


Moving into 2017, one thing is pretty clear for the financial services industry—digital transformation cannot be ignored. But don’t worry. Just because you haven’t been a first mover with digital financial services doesn’t mean you can’t succeed.

In fact, this might be an example of a situation in which you would like to be second or third to market because it gives you a chance to learn from the first movers.

And while these consumer facing, or ‘Direct’, examples demonstrate the changes in the Direct models, we should not forget that there is a huge indirect / Intermediary channel where the benefits and effects of Digital disruption are also being felt.

As you start to get the ball rolling on digital financial services, you need some role models who are succeeding today to make sure you’re on the right track. Let’s look at 3 UK financial services companies that can teach you some important lessons about digital disruption.


<< Book a Demo Now to See How You Can Increase Your Customer Experience ROI >>


1. Metro Bank—The Pioneer for Digital Banking in the UK

When you think about digital disruptors in banking, you might jump straight to elimination of physical banking and only think of entirely-online products and services. But Metro Bank started in 2010 as the first high street bank to be licensed in the UK in about 150 years.

Although Metro Bank wasn’t necessarily digital, it has been a pioneer paving the way for today’s disruptors. At a time when traditional banking had a strong hold on the UK, Metro Bank stepped in and proved there was demand for more customer-centric banking.

Metro Bank’s customer-first approach laid the groundwork for the recent release of their advanced online banking experience. As a newcomer to disruption, it’s important to note that embracing digital transformation doesn’t always mean a complicated in-house development process.

Metro Bank leveraged Backbase, a leader in omni-channel customer experience platforms to build out its online offerings to keep up with its customer-centric values. If you want to streamline digital banking, the lesson here is that partnerships can help your enterprise pivot more smoothly than undertaking massive projects on your own.

2. Atom Bank—The UK’s First Digital-Only Bank

As if starting Metro Bank wasn’t enough, founder Anthony Thomson went on to set up the UK’s first digital-only bank to offer real products and services.

While there are skeptics surrounding digital-only banking, Atom Bank’s lack of branches and call centers, coupled with total functionality through a mobile app, is appealing to younger customers. And according to Atom Bank CEO, the company believes that older consumers are coming around to the idea of online banking.

The lesson you can learn here is that an agile mindset is critical for digital transformation success. At release, Atom Bank only offered savings accounts for their customers. Traditional firms may not be able to imagine going to market with anything less than a full feature set.

Atom Bank has plans to soon release checking accounts, loans and mortgages as well as an Android operating system app offering, but getting to market with a minimum viable product has helped build a customer base ahead of competitors.

3. Guevara—Making Peer-to-Peer Insurance a Reality

The traditional insurance industry has been a race to the bottom for years, leaving incumbent firms to look for new ways of unlocking potential revenue.

Digital transformation is starting to have a significant impact on the industry, especially as online peer-to-peer insurance companies come to market. One example is Guevara, which focuses on auto insurance for now.

The idea is that Guevara pools customers in groups and takes their premiums to cover claims. When money is left over, it results in discounts for the group (specifically those who have not submitted claims).

At a time when the customer experience is everything for financial services, online platforms like Guevara seem to be the future. That’s not to say you need to you need to become a peer-to-peer insurance company. Rather, you need to take customer feedback seriously as consumers grow frustrated with the lack of transparency and over complication in traditional insurance.

Know Where Friction Exists in Your Customer Experience

As a traditional financial services company looking to embrace digital transformation, the first step is to understand how you’re being disrupted and what is the customer experience friction that’s holding you back.

What’s interesting is that this understanding also compliments compliance needs whether they be regulatory, risk, disclosure or simple proof.

Whether a new entrant or a traditional player, working in direct and/or indirect channels, where the degree of “legacy” can be an obstacle, or not, there are customer experience improvements that can be made now, and along the course of the ongoing digital journey.

If you want to dive a little deeper into how new technology like machine learning and companies embracing digital transformation are impacting traditional financial services companies, download our free ebook, Uncovering Hidden Revenue from Online Customers for Financial Services.

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For several years now, traditional financial services firms have been under siege from a new market of financial disintermediaries—startups focused on using digital channels almost exclusively, to streamline financial services.

Whether you’re a bank, insurer, retirement firm or wealth management firm, you know that digital isn’t just a fad. Digital is a reality that financial services firms must deal with or risk losing even more market share and revenue to emerging FinTech companies. Succeeding in digital is predicated on delivering a superior customer experience. FinTech firms have had the upper hand in this regard, but traditional firms are making strides to catch up.


<< Book a Demo Now to See How You Can Increase Your Customer Experience ROI >>


Earlier this year we discussed the lower-level process of optimizing the digital customer experience in financial services. Now, let’s take a step back and understand the bigger picture of what the financial services industry is facing.

The New Financial Services Reality

Investments in financial technology have grown over 1,000% since 2010 (from $1.8 billion to $20 billion in 2015). These investments are expected to accelerate through 2020 as some FinTechs transcend startup status.

There are many residual effects of digital dominance in the financial services industry, but two important ones include:

  • An Uptick in Fraud: According to Financial Fraud Action UK, 2015 saw 26% increase in fraud in the UK financial services ecosystem, totaling €755 million. Specifically, there was a 72% increase in remote banking fraud, pointing to the effects of greater adoption of digital channels—both by consumers and financial services companies.
  • In-Person Banking Is Dwindling: Major banks and financial services providers are a long way from going entirely digital. However, consumer behavior is accelerating the shift. Branch banking is still going strong, but 40% of Americans haven’t visited a bank in the last 6 months.

These two opposing trends are indicative of a realization that multiple other industries have come to in recent years—consumers are willing to sacrifice some level of security for the convenience, ease, and better customer experience of digital channels.

Because FinTech disintermediaries can, in some cases, offer simplified account setup processes, more attractive rates and fees, and better overall experiences online, they are successfully eating away at the revenue that well-established firms have owned for years. Traditional financial services companies need an effective way to observe digital behavior and optimize customer experiences accordingly.

The Big Data Opportunity for Financial Services Firms

Capgemini Consulting research recently found that 37% of customers believe banks don’t understand their needs and preferences. At a time when customer experience is a key differentiator for digital financial services businesses, companies must be in tune with what customers need and want.

This is where customer experience data will play a role in digital financial services moving forward.

The same Capgemini survey also found that 60% of financial institutions see customer experience data and analytics (part of big data) as a means to creating competitive advantages while 90% go as far as to say that it may define future winners in the industry. Leveraging big data analytics to optimize the customer experience is an answer to keeping up with innovative FinTech startups while unlocking revenue you never knew you earned.

If you want to learn more about the digital landscape surrounding financial services as well as how customer experience analytics can help incumbent firms adapt to disruption, download our new ebook, How Financial Services Firms Can Uncover Hidden Revenue Opportunities in the Digital Channel.

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Dollar Sign Digital Pressures Financial Services Firms

Financial service providers have undergone a significant transition in the last decade whereby the customer’s experience has increasingly transitioned online, with a complex array of functions being offered on a self-service basis.  For a highly regulated industry – that has traditionally been a face-to-face customer serving industry – this is quite a step change.

Optimal customer experience is essential – particularly when customers are managing their financial affairs.  Coupled with the risk of fraud, the financial services industry has some sector-specific challenges to address where customer experience management (CEM) technology, such as UserReplay, can help.

Optimizing the experience

Sites in the financial services industry are regularly split between secure and non-secure sections.  The non-secure areas are where potential customers experience their first interactions with the brand and are introduced to the various products and services.  A poor experience here, such as badly designed forms and errors in application processes, can reduce conversion opportunities.

In the secure self-service area, customer expectations are high and they wish to be able to complete transactions quickly and easily.  A poor experience could lead a customer to defect and try out a rival brands services. In addition, one of the main aims of the customer self-service function is to deflect customer service calls or branch visits – which incur additional cost to the business.

Finding and fix issues

Financial services sites are rigorously tested.  Nonetheless, undetected errors or poorly designed processes can occur.  Ensuring that problems are rapidly identified and rectified is an on-going and time-consumer process.  According to The Online Customer Experience – Counting the Cost of Not Knowing research study, commissioned by UserReplay, 58% of finance eCommerce professionals surveyed said that not having complete visibility of their customers’ online journey makes it significantly more challenging to plan and make decisions.  It also takes financial services providers a day to find and fix issues on average – a significant drain on resources and too slow in a time critical environment.

Customer services and dispute resolution

When customers experience an issue on their online banking site, they are likely to contact the customer service team.  Being able to visualize exactly what the customer did in real-time can help reduce the time required to service the customer and reduce the need for further calls.  Also, having this visibility means that resolving disputes with customers is much easier as you have empirical evidence of their interactions.

Fraud analysis

Online fraud can be detected by such behaviors as unusually high attempts at login or changing personal details midway through a process.  UserReplay can be configured to recognize fraudulent behavior and to notify managers of unusual incidences.  As well as real-time responses, it also provides a wealth of data for forensic fraud analysis and to guide on-going fraud strategies.

Tag based capture becomes a realistic option

Regulatory issues around third party storage of data is a key issue for financial services organizations and means that SaaS based CEM solutions have traditionally been out of bounds for financial services companies.  This has meant that, up to now, they have not been able to take advantage of high fidelity session replay and/or advanced capabilities such as form analytics.

In response to this challenge, UserReplay has launched an Enterprise Tag capability that is now available within its installed software offering. It uses a JavaScript tag to capture the customer journey data. The only difference with UserReplay’s SaaS option is that data is directed to the customer’s own servers rather than UserReplay’s hosting environment. This is particularly advantageous for brands that want to capture PII data for customer services, fraud analysis and dispute resolution use cases but also want the advantages of capturing data at the client side.

To find out more about Enterprise Tag and UserReplay’s various deployment options visit here.

Darren Ward, Director of Product Marketing, UserReplay