American Express, ABN AMRO, HSBC, Royal Bank of Scotland (RBS), USAA have one thing in common - they are all financial services companies operating in a sector not so famous for customer centricity. The average NPS® score for the financial services sector sits at 34, whereas industries like technology and consumer brands are above with 61 and 45 respectively. The clear correlation between NPS, customer loyalty, sales and profitability of a financial institution has led a lot of financial services companies to adopt the NPS system and work on improving the customer experience they offer. The sector, however, still has a long way to go till it becomes infamous for customer experience and satisfaction.
In order to prepare more financial services companies for their CX and NPS success, CustomerGauge will cover some of the key trends that will shape the future of sector. We will also explore the NPS scores of banks like American Express, USAA, ABN AMRO and HSBC, in order to compare and contrast NPS tactics and best practices.
The CX Trends that are changing the face of the financial services sector
Measuring and growing the Net Promoter Score in the banking and financial services industry has never been more important. With customers becoming increasingly tech-savvy and expecting more personalised banking experiences, banks simply cannot afford to operate in the traditional inside-out CX approach. The good news is that a recent FSI Adobe Summit uncovered that the financial services industry is rapidly catching up in terms of customer focus. 63 percent out of 840 FSI executives have marked customer experience as their top priority for 2017—a 17 percent increase over 2016. However, execution has been found to still lag behind intention. This is further confirmed by a study from PA Consulting on the financial services industry, which highlighted both the priorities and challenges of executives in the banking sector (See images below).
Let’s discover what are the key trends that will shape the FS industry in the next couple of years.
1) Data analytics capabilities
Improving data analytics capabilities will be a crucial component for better customer experience in the financial services sector. According to Adobe, a full 99 percent of respondents consider “improving data analysis capabilities” to be a key element in better understanding customer experience requirements; and more than half of respondents (53 percent) plan to increase their marketing analytics budget over the next year. A great example comes from Royal Bank of Scotland (RBS)'s recent CX initiatives. In order to better understand, analyse and act upon customer expectations, research showed that RBS have even appointed specialised teams of “journey managers,” empowered to analyse entire customer journeys from start to finish, and order specific functional changes at any problematic touchpoint. RBS currently has an NPS score of 50 after it increased investment in personalisation.
2) Mobile payment technologies that offer more value
A recent report published by Ipsos MORI, a market research company, and VocaLink, a global payments partner to financial institutions and governments, indicates that European millennials are struggling to adopt mobile payment technology. The study uncovered that while there is a great interest in mobile payments by customers, the lack of features and benefits that today’s technology offers is preventing them from changing their habits. What is even more interesting is the fact that the study found that millennials in the U.K. and the Netherlands would be more inclined to use new mobile payment services if such services were offered by their banks, followed by PayPal.
One bank that caught our attention with regards to their mobile payment technologies is the Dutch bank ABN AMRO. The bank's Tikkie app allows any bank customers to send payment requests via WhatsApp, thus making the experience extremely effortless and time-efficient. The requester selects the amount they need to be paid in Tikkie and then the person from their WhatsApp contacts from whom they wish to receive payment. The app creates a link that can be sent with a WhatsApp message and then with one click on the link, the person who receives the message is directed to the payment environment. A unique feature of Tikkie is that the user does not need to create a new online bank account or separate e-wallet in order to receive payments. The money is automatically credited to their existing current account.
We decided to dig a little deeper and find out the NPS score of ABN AMRO, along with some of the CX initiatives they have launched in recent years. The Net Promoter Score is in fact a main focus and objective for ABN AMRO Group. Customer feedback helps ABN AMRO track and act upon client’s opinion of the product and service. The bank rolled-out closed-loop feedback throughout the organisation in 2016 as a way to continuously learn from their client. ABN AMRO has made tremendous progress in the past three years (coming from NPS -23 for their retail banking division) . Initiatives launched in 2016 to enhance the customer experience are the client loyalty program & Meer, the Tikkie payment app and the Grip app, which gives clients insight and overview regarding their spending. CEO Frans Woelders, who we spoke to recently, has established a customer centric transformation strategy based on the NPS and enhanced ABN AMRO’s CX by consistently improving customer journeys.
“The customer says whether we do well or not. It is up to us how we collect that information. " - Director for Ecommerce Jan-Pieter Schrier, ABN AMRO
3) Focusing on omni-channel will remain critical for many financial institutions
Bank of America chairman and CEO Brian Moynihan recently discussed some of the key attributes that financial services companies will need to develop in order to remain competitive in the market space.
“You have to be able to meet every customer, everywhere they want, and no one channel wins,” Moynihan said.
During a WSJ’s CFO Network conference, BoA' CEO shared that the bank hosts 130 million consumer interactions every week, and while 123 million transactions don’t take place in a branch, 7 million still do. As such, Moynihan stressed that while some financial services companies will be available only via mobile or the internet, most will continue to have a presence across a variety of channels. Therefore, the importance of creating a seamless customer experience across channels cannot be understated.
A Closer Look at the NPS Benchmarks from Financial Services Companies
Now that we have looked at some of the trends that will shape the future of the financial services sector, let's take a closer look at the NPS benchmarks from the industry. We have decided to explore the NPS scores of companies currently available in our sister website NPSBenchmarks.com.
American Express is among the US banks that leads the NPS rankings in financial services, enjoying an NPS of 52. Positive direct interactions and customer service and a generous financial rewards program has helped American Express make its cardholders feel that they are valued and that they are getting good value. In turn this has led to prevent switching of accounts to take advantage of introductory deals.
In an interview, Derek Martin, American Express’ director of global consumer card sales, retention capabilities and strategies shares that NPS is far from a vanity metric. It has instead become one that has correlated with significant improvements to the customer experience and the business’ bottom line.
"People who say you can’t correlate the data to actual revenue items—it’s not true, at least not in my case," says Martin. "I can show you data that says that as net promoter score rises, customers spend more money, they’re more loyal, they’re putting more dollars on an American Express card, and they’re leaving us less. - Source
NPSBenchmarks.com shows us that HSBC, on the other hand, has an Net Promoter Score of – 24, after a series of customer service complaints have damaged the brand’s reputation. A combination of poor customer service and overall negative public opinion can significantly hurt a brand’s consumer sentiment and hence lead to a low NPS.
The American bank USAA is enjoying an NPS score of 75 - one of the highest in the industry.The ease of doing business with the company, combined with the feeling that customers are treated fairly has helped USAA achieve the impressive NPS score of 75. The bank has carefully invested in initiatives that reduce customer effort and lead to active promoters. One such initiative is allowing customer to check their bank balances via text message. The brand also now offers technology for customers who have been involved in car accidents, allowing them to instantly attach photographs and voice recordings to their insurance claims, which can be initiated remotely. Such CX investments have helped USAA stay on top of the financial services NPS benchmarks and become an epitome for customer-centricity.
Here are more NPS benchmarks from the financial service industry:
Morgan Stanley NPS = 16
First Direct NPS = 73
Tesco Bank NPS = 28
ING Luxembourg NPS = 63
JP Morgan NPS = 8
CitiGroup NPS = 18
Westpack NPS = -15
ANZ NPS = -13
CBA NPS = -3