For the most part, the established players in the financial services industry have been slow to fall victim to – or capitalise on – the kind of customer-centric digital disruption we have seen in other sectors. Inertia and a lack of differentiation between products and services have made customers loyal to brands by default. To this day, 20% of Brits still use the same bank that their parents chose for them when they set up their first current account. In recent years, however, the dynamic has started to shift, with the emergence of ‘Fintech’ challengers who have reimagined financial products and services – forcing the incumbents to respond. Customer experience – once an afterthought in a market where prices and rates were the primary drivers of demand – is now the secret weapon in this struggle for supremacy. Are you able to keep up with the pace of change?

So what does CX actually mean in practice? Here’s Manifesto’s take.

Customer experience is the sum of all the positive and negative interactions a customer has with your brand, across all channels and products. Yet many businesses are not organised to be customer-centric. When the back office is organised by teams that are aligned to a specific product or business function, the customer usually ends up paying the price in the form of a disjointed experience.

Every customer interaction is an opportunity to deliver on your brand promise, but they’re not all equally important. Recognising that principle is what High Performance Experience is all about – understanding that some experiences are more ‘valuable’ than others.

So what is a ‘valuable experience’? These are the moments that are pivotal to your business’s success. They may not be the moments you think. But by examining customer experiences through the lenses of customer need, and business goals; we can arrive at a prioritisation focused on high performance. Both for you and your customers.

Customer centricity is essential for any Financial Services brand that wants to stay relevant. Recognising that the customer is your source of profit, not the product, is fundamental. The barriers to switching providers have fallen. Slick and easy onboarding experiences becoming a focus of ruthless optimisation by challengers looking to steal customers from established brands. The customer has the choice of whether to spend with you or not, and whether to buy from you again.  Those low barriers to switching mean you need to evolve, or die.

So who in the market can we look too? If we want to understand how embracing experience can help brands to weather this storm – and come out stronger than before?

JP Morgan’s pivot to a focus on Customer Experience (CX)

Let’s start with JP Morgan; whose strategic moves show they are going ‘nuts’ for high performance experience and innovation. Firstly, they just announced the launch of their UK based Digital Bank, Chase. Using the latest technology and putting the customer’s experience at the heart of their offering, the bank offers a range of products. Launching first with a new take on current accounts, aimed to directly compete with fintechs. To complement this, JP Morgan acquired Nutmeg, one of the most successful digital challengers in the UK’s wealth management space. Slick user interfaces and intelligent messaging communication reflect a strong focus on delivering a high performance, customer-centric experience.

JP Morgan have successfully mimicked the UX features of fintechs, while leveraging consumer trust in their brand and building in their own unique services. This demonstrates their aptitude for innovation, agility, and desire to improve CX for their customers, by making processes more efficient, user-friendly, and anticipating their wants and needs, rather than just meeting them.

Tescos Clubcard Pay+

Up next is Tesco’s Clubcard Pay+, designed to help people budget and save. Customers can add money to their account, allowing them to isolate grocery spending if they wish, by linking their bank account via the Tesco mobile app. Shoppers can also ‘save while they shop’ by rounding up their spending to the nearest pound, with the difference paid into the Round Up account.

This customer centric approach is not only a clever use case for open banking, but also prioritisation focused on high performance. Whilst this is not the most competitive proposition, with a savings rate of 0.1%, which is beaten by most of the market leading savings accounts, Tesco have truly put the customer at the centre of this decision, adding value for customers and eliminating reasons for shoppers to go elsewhere.

Personalisation- the heart of American Express’ Business Model

Next is American Express and their clever use of personalisation, which forms the backbone of their consumer business model. The payments gateway has developed a data driven approach to personalisation. Through the use of Orchestra, their self-built personalisation engine, which shapes marketing interactions for every customer in real time. 

Customers are presented with carefully curated offers when browsing rewards through the Amex app or website. To enable this, Orchestra is constantly fine tuning recommendations behind the scenes, by matching cardholders with relevant offers at optimal times. For instance, providing local dining options when a customer’s flight touches down in London. 

American Express’ clever use of personalisation drives sales and engagement. Whilst most banks obsess over a frictionless experience, American Express’ focus on customer engagement and stickiness is a classic example of customer centricity and HPX. They leverage data to drill down to the customer level and steer away from a one size fits all model,  creating unique experiences tailored to each customer, driving engagement and fostering loyalty.

Adapting Experiences to Drive Value- Incumbent Banks vs Fintechs

Focusing on the customer is, of course, vital – but it counts for little if it doesn’t convert to sustainable revenue in the long term. So how does CX link with value? In our experience, it needs to paint a holistic picture. CX can certainly be a revenue generating powerhouse, driving barnstorming customer acquisition campaigns and lucrative new cross and upsell opportunities. But it can also supercharge your engagement with customers, enhancing the moments you communicate with them to improve NPS, reduce the cost of service and limit churn.

The most forward thinking among the incumbent banks have cottoned on to this by ‘borrowing’ features from the neobank world, like in-app card freezing, pin reminders and categorised spend, helping them to keep up with the competition and enhance their NPS scores, reduce churn and drive loyalty.

Conclusion: How we can help

No matter the industry, having the right customer experience is now as important as having a winning value proposition. But in Financial Services, where disruption continues to intensify, it’s something that can no longer afford to be ignored. Sometimes knowing where to start can be daunting – that’s where our HPX practice comes in – we can work with you for a short sharp period, identifying priority experience points; and help you plot a course to a more customer-centric, value-led approach to the critical business of experience. Read more about our HPX practice here.