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The Perils and Rewards of Poor Customer Experience at the Bank

We have highlighted before the downside of negative customer experiences. We also suggest that there is nothing more important than providing a great experience. In retail banking, these negative experiences are causing a defection rate of over 25%.  However, what is the business benefit of improving the bank customer experience?

We now have a better idea, using data from a recent study by Kantar, and highlighted in ATM Marketplace. The Kantar CX+ study analyzed 6,000 retail banking customers in the U.S. and was conducted in 2018.

The financial upside of great bank customer experience is huge:

Banks can increase deposits 16.5 percent with improved CX.

Conversely, they also confirm the impact of a negative experience is massive:

Banks whose customer experience is allowed to decline risk losing up to 12.5 percent of their deposits.

Other results:

  • Banks that lead in the CX+ Index have a recommendation rate 1.9 times higher than banks at the lower end of the index.
  • Additionally, their share of deposits is 1.9 times higher and their customers are 2.1 times more willing to use the bank’s new products and services.
  • While 61 percent of female bank customers stay with their bank for more than five years, on the whole, they are less satisfied than men.
  • Women have a lower preference score for their bank than men, indicating that they may be more willing to switch if a better alternative presents itself.
  • Women are also less willing than men to take up additional products or services with their bank (64.3 percent vs. 73 percent of men).

Using on the spot customer feedback can help in improving the experience. But bank customer feedback forms are not the answer. They have all the same problems as comment cards. In fact, there are at least twelve major issues. It allows feedback to be delivered on their terms and with maximum convenience. Usually, this involves kiosks or tablets in addition to feedback via cell phone. More information on this is here.

The conclusion of the report is emphatic:

Focusing on bank customer experience is the single most important investment a bank can make in today’s competitive business environment.