What the pandemic taught us about customer service by banks

Whether they preferred the convenience of tapping on a smartphone, or having to go digital because a neighborhood bank branch was closed, customers in Singapore were quick to go online for their banking needs during the early days of the pandemic.

In a study of 1,000 adults in Singapore last year, finance website SingSaver found that 70 per cent had been using online banking frequently since the outbreak of Covid-19. What’s more, 80 per cent were also more likely to continue bankingonline post-pandemic.

In another study on customer preferences by Publicis Sapient, 44 per cent of respondents said they would use a mobile banking app more frequently during the pandemic. Correspondingly, 37 per cent said they would use a bank branch less frequently during this period.

These numbers may not be such a surprise, given that digital transactions were one way that banks overcame the lack of face-to-face interactions with their customers.

Looking ahead, what’s important for banks is how they respond to the customer preferences and behaviors that have permanently changed during the pandemic, as digital channels are increasingly becoming the norm instead of over-the-counter interactions in the years ahead.

To be sure, Singapore banks have been transitioning towards digital-first transactions for several years now, but the question is how well customers have taken to these efforts. In other words, how satisfied are they?

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Tellingly, in Publicis Sapient’s survey, 21 per cent in Singapore did not lean favorably towards mobile services meeting their general needs. When asked about their primary bank’s level of support in general and during the pandemic, most respondents in the study were not too positive, either. 19 per cent said their bank needed to do more to help them, while 65 per cent said their bank was doing just enough to provide support.

The fear for banks is that this could translate into churn, costing them valuable customers. In Singapore, 9 per cent of respondents in the Publicis Sapient study saidthey were very likely or somewhat likely to switch banks, while 21 per cent were undecided.

The 2 main reasons for switching were digital banking experience and customer service, ahead of reasons such as banking products and interest rates.

The good news is that banks seem to understand the challenges in this area and are taking them seriously.

In a separate Publicis Sapient study involving senior leaders in banks in Singapore, Australia, Thailand, Hong Kong and Indonesia, 85 per cent of respondents said customer service was a key metric at the highest level of their organisation. At the same time, 78 per cent of the respondents also agreed that their organisation must do more to cater to customers who lack digital skills. Tellingly, 73 per cent also said the pandemic had highlighted the weakness in their organisation’s current customer experience.

In other words, more needs to be done to deliver on a digital customer experience that has become even more important now than before to the bottom line.

One lesson that the pandemic has taught is that it’s difficult to gaze into a crystal ball for answers to an uncertain future. That said, with the knowledge gleaned from the digital transactions that customers increasingly perform over digital channels, banks should find an opportunity to improve their customer service and retain customers.

Certainly, with more data, banks can get better understanding of the customer through deeper insights.

This goes beyond upselling a bank’s related products based on a customer’s spending patterns. A bespoke experienceis more than just offering generic advice based on the past 6 month’s credit card bills.

A bank has intimate knowledge also of what a customer spends on and how he pays for those purchases. Therefore, can a bank shape a customer’s behavior through predictive intelligence, say, by recommending a service or product before he needs to reach out to a customer service agent?

Think of a car loan, for example. Based on other customers’ preferences and behavior, can a bank predict when a customer might buy a new car and recommend a new loan and insurance package ahead of that purchase?

That may seem like a simple scenario, but to get there, much needs to be done to understand not just the spending patterns of individual customers but also to spot similar patterns within the same demographic. This means gleaning insights from data that presents a holistic view of a customer, and not just based on the products they use regularly. 

According to Publicis Sapient’s study, banks are deploying new technologies such as cloud services, micro services, machine learning (ML), and artificial intelligence (AI). Indeed, 63 per cent of respondents believed they were ahead of competitors in this aspect, while 29 per cent felt that they were at least equal to competitors.

In implementing data as well as analytics for a 360-degree view of customers, say, to increase personalisation, 58 per cent believed they were ahead of competitors. That is an encouraging start, though success is defined by whether customers stay with your bank in the post-pandemic years.

Data also needs to be analysed and interpreted continuously, and not just at one point in time. Customers do change over time, as they go through important moments in life, such as parenthood or retirement. As such, any analysis needs to be frequently tested, with the results then fed back to the system to confirm findings and to further improve accuracy.

With a timelier and more precise picture of what customers want, a bank can refine the services offered, and in a continuous manner. Digital transformation is a journey, and just as it is difficult to predict what comes next in the pandemic, banks have to continuously analyse the data that comes in, and never be satisfied they have arrived at a perfect solution to better serve their customers.