Solving Fragmented Customer Journeys in Banking

Many financial institutions still struggle with fragmented customer journeys in when onboarding or providing support. These disconnected journeys lead to inefficiencies, frustrated customers and missed opportunities for cross-sales and deeper engagement. 

A Financial Brand report notes that banks and credit unions lose nearly 15% of customers and members each year, underscoring the urgent need to improve and streamline how these journeys are orchestrated so they are more convenient and cohesive.

What are customer journeys in banking?

Customer journeys in banking specifically are the steps a customer takes from their first interaction to reach any goal with their bank, from activiating a credit card to going online with a new payment system to setting up an operational account for their business. Ideally, customer journeys never end, as customers continue to use bank products and expand and change their relationship based on financial goals and life stages.

In this context, bank customer journeys differ from marketing customer journeys, which focus primarily on lead generation and nurturing with a goal of selling a banking product. This blog focuses on the challenges of threading together operational tasks to make them a singular journey that feels easy to a customer.

The unique thing about bank customer journeys is how complex they tend to be. Not only is financial services a highly regulated industry, but it's also one that has seen the rise of fintechs partnering with institutions to help them bring new services to market more quickly. That's a good thing - it allows banks to be responsible and proactive. But it also adds outside organizations into CX, and that's not simple to manage.

As customers spread out their banking relationships more widely, according to research, financial institutions have no choice - they have to focus now on resolving friction and obstacles so they can win and retain more households.

Banks lose nearly 15% of customers annually due to poor customer journey management.

Why Do Fragmented Customer Journeys Happen?

Fragmented customer journeys happen in banking because of it'scomplex ecosystem. In the past, the bank may have provided the majority of its products leveraging its core system and a few providers. Today, as they try to keep pace with consumer demands, they've partnered with fintechs. That's a good thing, but it can feel disjointed and uncoordinated to a customer on the other side.

Several factors contribute to journey chaos:

1. Siloed data and systems: Banks rely on a mix of legacy systems, applications and third-party platforms. While these tools  function well in isolation, they don't collaborate or share data well. Tim Attinger, a co-founder of OvationCXM and expert in journey orchestration, has extensive experience mapping customer journeys for top 10 banks. He notes: "..you get a baseline diagnostic of what it’s like for somebody outside of a company to experience all the different silos and organizations and systems and handoffs." It results in disconnected systems that fail to provide a comprehensive view of the customer’s journey.
   ‍
2. Multiple stakeholders: Banking processes involve many stakeholders, both internal (e.g., relationship managers, loan officers support teams) and external (e.g., fintech partners, payment processors regulators). Each stakeholder owns a sliver of data about the customer, and it's not typically shared, leading to a lack of coordination and communication. Attinger summarizes it simply, "Nobody knows what anybody else is doing." That means that bank colleagues themselves may unknowingly add to the confusion and inefficiency of their own customer journeys.
   ‍
3. Manual processes : Despite rapid jumps in technology including AI, many banking processes are still manual. For example, when onboarding new customers, employees may need to check multiple systems or manually update information. Lack of automation slows down the overall process and opens up the bank to human error.
   ‍
4. Disconnected channels: Separate channels provides separate views of the customer but each is only a sliver. It becomes impossible for banks to offer a unified experience that spans all customer interactions or is personalized to the whole relationship.

"I describe it as a game of 1-800 ping-pong that we put our clients through as they were calling into the bank. The bank was saying 'No, no, this isn’t us. This is a merchant issue. You need to call Fiserv.' And Fiserv would say, 'This isn’t us; this is the banker gateway.' Nobody knew exactly what the real issue was the client was experiencing.

Even once we understood the issue, nobody knew where that servicing hot potato was in the path toward resolution for the client. Our path towards resolution wasn’t as the crow flies, so to speak. It was hopping around everywhere, within KeyBank and within our third-party partners. We had what I’ll describe as a lot of servicing complexity. It was a nightmare for our clients, and it was having a direct impact on our P&L and the growth of our business.
- Jon Briggs, Executive Vice President of Commercial Payments, KeyBank‍

Where does friction exist in customer journeys?

It's most often caused by multiple internal and external stakeholders who aren't working together on a shared customer. With only partial views of what's happening, one party may point a customer to another stakeholder, insisting they should be the ones to help. Whether that's true or not, it's a terrible experience for a customer to get bounced around and to feel their bank has no idea who they are or what they need.

• Operations Teams: Operations teams may focus on efficiency in their department, but lack visibility into the broader customer journey.
• Customer support: Even though this team is usually a primary contact of customers, they usually have the least amount of information about the relationship, which restricts them from providing robust, fast responses when they inquire.
• IT: The IT team is tasked with keeping legacy systems secure and working. It may have a large amount of techncal debt and customization to maintain, which can keep it from leading innovation.
• External partners: Fintech providers, payment processors and many other third-party services contribute to fragmentation because they hold a bank's first party data in separate systems not integrated into customer journeys. The bank may own the customer relationship, but too often, it can't see parts of it managed by partners.

While new customers are always valuable, nurturing relationships with current customers can improve retention, lower the cost of funds, and strengthen liquidity. Start by examining how customers engage with your bank at every touchpoint and identify areas where technology can make interactions smoother and more rewarding. -BAI

How bank technologies hurt customer experience

There are dozens of platforms that have a part in facilitating customer journeys, but they also contribute to chaotic processes that are not modernized to meet today's customer expectations.

1. Legacy systems: Legacy systems can hold back innovation. We aren't saying that - banking executives bemoan this fact every time they are surveyed. These systems work well for the very specific jobs they have, but don't work well across channels, products or partners. They were not built for versatility either, so as bank customer experience expectations evolve, they are stuck, and they hold back needed change.
2. CRM and case management: Some customer relationship management (CRM) tools like Salesforce or ServiceNow say they can streamline customer journeys, but what they don't do very well is manage complex, multi-party workflows that are common in banking. If they do, it's with significant amounts of custom code and costly updates that, as quickly as everything is changing, could be obsolete almost immediately. They do a little bit of a lot of things, but they don't specialize in bank customer experience. And like their legacy counterparts, they too become unwieldy the more functions that are bolted onto them.
3. Core banking: Core banking systems like FIS, Fiserv, Jack Henry and Temenos are the backbone of all banking operations. They do what they were created to do well. What they don't offer is true visibility into a customer journey or insights on how to optimize those operations. It's data is incredibly valuable, but too often, it remains locked within and banks cannot act upon it.
4. Collaboration: Even some of the world's largest banks use manual tools for internal collaboration like email, spreadsheets. It's inefficient at scale, and that can affect how quickly banks help cusotmers reach their goals.

Jon Briggs, Executive Vice President of Commercial Payments at KeyBank, noted that within 18 months, the bank transformed from lagging behind peers in client retention to achieving best-in-class status across the industry. This improvement was so substantial that it exceeded their original business case projections by approximately fourfold. 

How to optimize bank customer journeys

To improve the customer experience, banks should focus on integration, collaboration and real-time data orchestration. Here are a few best practices:

1. Unify bank ecosystem data : Solving fragmentation starts with a 360-view of the customer. That can only be done by integrating data from core banking systems, CRMs, support tools and external partners in real time. A holistic approach enables everyone to access relevant information they need at any moment.
2. Leverage AI and automations: One way to responsibly bring Ai into customer journey orchestration is to leverage it in a dedicated CX orchestration engine, where analysis can identify specific recommendations to improve customer experience. In addition, companies like IBM are partnering with providers like OvationCXM to bring AI tools to the data - offering feature sets behind the firewall so this rich customer data remains safe and secure but available for AI insights.
3. Foster cross-party collaboration: Empower collaboration between different departments (e.g., operations, customer service, IT) and external partners by leveraging a shared platform.
4. Allow business lines to design and manage customer journeys: It makes sense that those closest to customers should have the ability to build customer experiences without waiting for platform updates or IT resources. A no-code journey builder that's part of an orchestration engine can overlay core systems andgive banks the tools to be responsive to modern customer banking needs more quickly.

Embedding digital collaboration into business process workflows promises to open up steep improvements in employee productivity, leading to significant value creation for the industry. - McKinsey & Company