Customer Support as a Strategic Asset: Shifting the Paradigm from Cost to Value

In the financial sector, a significant number of employees work in the Customer Support (Customer Care) department. However, blogs about the financial (Fintech) sector often overlook this department, focusing instead on sales and IT.

Instead Customer Support departments are often considered as necessary costs (a cost center) that should be minimized as much as possible.

This results in continuous neglect and relentless cost-cutting measures in those departments. E.g.

Outsourcing to near- and off-shore countries
Structural understaffing, leading to awfully long waiting times for customers.
Low salaries, resulting in hiring profiles with little experience and expertise.
Bad and difficult working circumstances, like
- Setting targets on Average Call Time, creating pressure to quickly close calls.
- Leaderboards based on the number of calls processed, fostering competition among team members.
- Monitoring and limiting break times
- Encouraging multitasking during no-call time (for other occupations, like answering mails, social media, chat boxes…), which requires continuous context switching and reduced focus.
Complex IVR menus that aim to automate and streamline processes, but often lead to a poor customer experience.
Maximizing automation through standard templates (to reply to mails and phone calls), the setup of chatbots, forcing customers to use self-service options…

These measures ultimately contribute to a bad customer experience, leading to customer churn, negative social media feedback…

Considering the growing importance of customer centricity, this situation is probably not sustainable, as in the long-term it leads to bad business results. Clearly delivering exceptional customer service has become a key competitive differentiator, and therefore shifting the paradigm is crucial.

In a customer-centric organization, the Customer Support department should emerge as a cornerstone in serving and delighting customers. Increasingly financial service players are therefore recognizing the value of Customer Support teams as profit-centers, that positively impact customer satisfaction and brand loyalty.

In this trend, we see the opposite movement of the measures taken above, i.e.

Re-insource Customer Support departments, considering them as a core, strategic competence/function for the company.
Increase headcount (i.e. foresee sufficient staff) to reduce waiting times (ensuring swift issue resolution), increase the time spent on every customer interaction (focus on satisfaction of the customer in the customer support interaction, rather than a quick completion) and to improve work conditions.
Hire better profiles and provide sufficient training and support.
Prioritize direct customer interactions over indirect or automated interactions. E.g. certain companies have already adopted a policy of answering every question via a phone call and not by a written reply. By adopting this practice, they have significantly increased customer satisfaction, but were also able to identify countless new cross-selling opportunities.
Grant more responsibilities and autonomy to Customer Support resources, allowing them to cross-sell products, identify potential customer issues (i.e. identify churn), survey and understand customers, and proactively contact customers.
Recognize Customer Support teams as ambassadors of the organization and as salespeople, encouraging them to go above and beyond to exceed customer expectations.
Leverage the deep understanding of customers' needs, preferences, and pain points possessed by Customer Support departments.

By implementing these measures, organizations acknowledge the value of existing customers as valuable assets. Customer Support teams play a central role in building and nurturing long-term relationships, ensuring customer satisfaction, and fostering loyalty. Additionally, they become a valuable resource for gathering market insights and understanding the perception of existing products, potentially replacing complex and costly (often external) surveys and market studies.

So next time a Product Manager wants more info about the market or about the customer perception of an existing product, maybe worth to visit first the Customer Support department, before organizing complex and costly surveys and market studies.

Check out my other blogs on https://bankloch.blogspot.com/

Comments

Transforming the insurance sector to an Open API Ecosystem

1. Introduction "Open" has recently become a new buzzword in the financial services industry, i.e. open data, open APIs, Open Banking, Open Insurance …, but what does this new buzzword really mean? "Open" refers to the capability of companies to expose their services to the outside world, so that external partners or even competitors can use these services to bring added value to their customers. This trend is made possible by the technological evolution of open APIs (Application Programming Interfaces), which are the digital ports making this communication possible. Together companies, interconnected through open APIs, form a true API ecosystem , offering best-of-breed customer experience, by combining the digital services offered by multiple companies. In the technology sector this evolution has been ongoing for multiple years (think about the travelling sector, allowing you to book any hotel online). An excellent example of this

Are product silos in a bank inevitable?

Silo thinking is often frowned upon in the industry. It is often a synonym for bureaucratic processes and politics and in almost every article describing the threats of new innovative Fintech players on the banking industry, the strong bank product silos are put forward as one of the main blockages why incumbent banks are not able to (quickly) react to the changing customer expectations. Customers want solutions to their problems and do not want to be bothered about the internal organisation of their bank. Most banks are however organized by product domain (daily banking, investments and lending) and by customer segmentation (retail banking, private banking, SMEs and corporates). This division is reflected both at business and IT side and almost automatically leads to the creation of silos. It is however difficult to reorganize a bank without creating new silos or introducing other types of issues and inefficiencies. An organization is never ideal and needs to take a number of cons

RPA - The miracle solution for incumbent banks to bridge the automation gap with neo-banks?

Hypes and marketing buzz words are strongly present in the IT landscape. Often these are existing concepts, which have evolved technologically and are then renamed to a new term, as if it were a brand new technology or concept. If you want to understand and assess these new trends, it is important to reduce the concepts to their essence and compare them with existing technologies , e.g. Integration (middleware) software ensures that 2 separate applications or components can be integrated in an easy way. Of course, there is a huge evolution in the protocols, volumes of exchanged data, scalability, performance…, but in essence the problem remains the same. Nonetheless, there have been multiple terms for integration software such as ETL, ESB, EAI, SOA, Service Mesh… Data storage software ensures that data is stored in such a way that data is not lost and that there is some kind guaranteed consistency, maximum availability and scalability, easy retrieval and searching

IoT - Revolution or Evolution in the Financial Services Industry

1. The IoT hype We have all heard about the "Internet of Things" (IoT) as this revolutionary new technology, which will radically change our lives. But is it really such a revolution and will it really have an impact on the Financial Services Industry? To refresh our memory, the Internet of Things (IoT) refers to any object , which is able to collect data and communicate and share this information (like condition, geolocation…) over the internet . This communication will often occur between 2 objects (i.e. not involving any human), which is often referred to as Machine-to-Machine (M2M) communication. Well known examples are home thermostats, home security systems, fitness and health monitors, wearables… This all seems futuristic, but smartphones, tablets and smartwatches can also be considered as IoT devices. More importantly, beside these futuristic visions of IoT, the smartphone will most likely continue to be the center of the connected devi

Neobanks should find their niche to improve their profitability

The last 5 years dozens of so-called neo- or challenger banks (according to Exton Consulting 256 neobanks are in circulation today) have disrupted the banking landscape, by offering a fully digitized (cfr. "tech companies with a banking license"), very customer-centric, simple and fluent (e.g. possibility to become client and open an account in a few clicks) and low-cost product and service offering. While several of them are already valued at billions of euros (like Revolut, Monzo, Chime, N26, NuBank…), very few of them are expected to be profitable in the coming years and even less are already profitable today (Accenture research shows that the average UK neobank loses $11 per user yearly). These challenger banks are typically confronted with increasing costs, while the margins generated per customer remain low (e.g. due to the offering of free products and services or above market-level saving account interest rates). While it’s obvious that disrupting the financial ma

Can Augmented Reality make daily banking a more pleasant experience?

With the increased competition in the financial services landscape (between banks/insurers, but also of new entrants like FinTechs and Telcos), customers are demanding and expecting a more innovative and fluent digital user experience. Unfortunately, most banks and insurers, with their product-oriented online and mobile platforms, are not known for their pleasant and fluent user experience. The trend towards customer oriented services , like personal financial management (with functions like budget management, expense categorization, saving goals…) and robo-advise, is already a big step in the right direction, but even then, managing financials is still considered to be a boring intangible and complex task for most people. Virtual (VR) and augmented reality (AR) could bring a solution. These technologies provide a user experience which is more intuitive, personalised and pleasant , as they introduce an element of gamification to the experience. Both VR and AR

Beyond Imagination: The Rise and Evolution of Generative AI Tools

Generative AI has revolutionized the way we create and interact with digital content. Since the launch of Dall-E in July 2022 and ChatGPT in November 2022, the field has seen unprecedented growth. This technology, initially popularized by OpenAI’s ChatGPT, has now been embraced by major tech players like Microsoft and Google, as well as a plethora of innovative startups. These advancements offer solutions for generating a diverse range of outputs including text, images, video, audio, and other media from simple prompts. The consumer now has a vast array of options based on their specific output needs and use cases . From generic, large-scale, multi-modal models like OpenAI’s ChatGPT and Google’s Bard to specialized solutions tailored for specific use cases and sectors like finance and legal advice, the choices are vast and varied. For instance, in the financial sector, tools like BloombergGPT ( https://www.bloomberg.com/ ), FinGPT ( https://fin-gpt.org/ ), StockGPT ( https://www.as

PFM, BFM, Financial Butler, Financial Cockpit, Account Aggregator… - Will the cumbersome administrative tasks on your financials finally be taken over by your financial institution?

1. Introduction Personal Financial Management (PFM) refers to the software that helps users manage their money (budget, save and spend money). Therefore, it is often also called Digital Money Management . In other words, PFM tools help customers make sense of their money , i.e. they help customers follow, classify, remain informed and manage their Personal Finances. Personal Finance used to be (or still is) a time-consuming effort , where people would manually input all their income and expenses in a self-developed spreadsheet, which would gradually be extended with additional calculations. Already for more than 20 years, several software vendors aim to give a solution to this , by providing applications, websites and/or apps. These tools were never massively adopted, since they still required a lot of manual interventions (manual input of income and expense transaction, manual mapping transactions to categories…) and lacked an integration in the day-to-da

Deals as a competitive differentiator in the financial sector

In my blog " Customer acquisition cost: probably the most valuable metric for Fintechs " ( https://bankloch.blogspot.com/2020/06/customer-acquisition-cost-probably-most.html ) I described how a customer acquisition strategy can make or break a Fintech. In the traditional Retail sector, focused on selling different types of products for personal usage to end-customers, customer acquisition is just as important. No wonder that the advertisement sector is a multi-billion dollar industry. However in recent years due to the digitalization and consequently the rise of Digital Marketing , customer acquisition has become much more focused on delivering the right message via the right channel to the right person on the right time . Big tech players like Google and Facebook are specialized in this kind of targeted marketing, which is a key factor for their success and multi-billion valuations. Their exponential growth in marketing revenues seems however coming to a halt, as digi

Low- and No-code platforms - Will IT developers soon be out of a job?

“ The future of coding is no coding at all ” - Chris Wanstrath (CEO at GitHub). Mid May I posted a blog on RPA (Robotic Process Automation - https://bankloch.blogspot.com/2020/05/rpa-miracle-solution-for-incumbent.html ) on how this technology, promises the world to companies. A very similar story is found with low- and no-code platforms, which also promise that business people, with limited to no knowledge of IT, can create complex business applications. These platforms originate , just as RPA tools, from the growing demand for IT developments , while IT cannot keep up with the available capacity. As a result, an enormous gap between IT teams and business demands is created, which is often filled by shadow-IT departments, which extend the IT workforce and create business tools in Excel, Access, WordPress… Unfortunately these tools built in shadow-IT departments arrive very soon at their limits, as they don’t support the required non-functional requirements (like high availabili

Bankloch

Search This Blog