Relationships were personal and face-to-face, with customers looking to their banks to provide them with all the financial products they needed ― from current accounts and savings accounts to mortgages and credit cards.
Not only was this convenient for the customer, it was also good for the banks as it allowed them to balance less profitable products (typically current accounts) with ones that brought in more revenue.
As a result, the big high street banks grew even larger ― acquiring smaller competitors in the process ― and became part of everyday life.
The growth of niche banks
Times have changed, and the ease with which we can view deals, compare products and switch providers is spelling the end for banking’s one-stop-shops.
Today, newly emerging ‘challenger’ banks are able to specialise in a smaller number of products. Digital channels are reducing overheads and increasing margins, so newcomers can choose what to offer without needing to offset the profitability of one product against another.
The battle for the retail banking customer
Competition for banking customers has never been so fierce. And if brand loyalty wasn’t already wearing thin following events of the last decade, there are now many reasons for better informed, more connected and more demanding customers to shop around.
So, how can today’s retail banks capture, win back or hold onto their customers? The answer takes us almost full circle… to customer service.
Customer Experience Management (CXM) in retail banking today
Today it’s much more than recognising the central importance of the customer; it’s about providing a positive customer ‘experience’. This involves delivering outstanding and truly differentiated, omni-channel customer engagement at every stage and every level of interaction.
It’s described as Customer Experience Management (CXM) and is a key strategic driver of customer loyalty and retention in today’s hyper-competitive world.
Our research: The importance of CXM
We asked senior executives of large B2C organisations in the UK (including retail banks and credit card companies) how important Customer Experience Management (CXM) was in achieving their strategic goals.
Two-thirds agreed that in a world of less product differentiation and more market competition, designing and managing customer interactions to exceed expectations and increase loyalty, advocacy and lifetime value is the way to succeed.
But only one-in-ten said they had achieved their CXM goals.
In a recently launched whitepaper, we explore why ― and offer a series of key recommendations to help enterprises achieve success.