As recently as 2014, three-quarters of all current accounts in the UK were held with just four large providers. Not for long.
Today, the government-supported Current Account Switching Service is making it easier for customers to change banks.
At the same time, a relaxation of regulations has prompted a flood of new banks applying for a banking licence. Bank of England officials have approved 14 new banks since 2013, and another 20 are in talks.
Challenger banks on the attack
While we’re familiar with supermarkets providing financial services, we should probably get used to the idea of mobile app-only banks, social banking, savings-only banks, banks for specific customer groups and (stop us if you’ve heard this one before) banks with local representatives providing face-to-face service.
No one is suggesting that the dominance of the Big Four is going to be reversed overnight, or anytime soon. However, the battle for our business, our loyalty and our money is about to heat up.
What does it mean for customers – and for banks?
It’s likely to be great for consumers ― just as the government intended when they established the Independent Commission on Banking to improve competition (among other things).
But what if you are a bank or a financial services organisation, and have been around for centuries or relatively speaking, five minutes?
In this era of rampant commoditisation, agile specialisation, unprecedented competition and customers who are better informed, more connected and more demanding than ever before, how can you stand out from the crowd?
The rise in Customer Experience Management
According to two-thirds of senior executives we spoke to (including many from retail banking and credit card companies), Customer Experience Management (CXM) is a key strategic tool to increase loyalty, advocacy and lifetime value. In short, to engage with customers seamlessly and emotionally at every interaction throughout the customer lifecycle.
However, a strategy to harness data to deliver insight-led actions; integrate people, processes and technology; and manage omni-channel, two way communications with customers is easier said than done…
…which may be why only 10% of companies feel they have achieved their CXM goals.
Fortunately our research also revealed some compelling success stories and helped us make a series of recommendations to help enterprises achieve success.
Find out more ― download our whitepaper, The Rise in Customer Experience Management.