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CX INVESTMENTS IN BANKING & INSURANCE ARE
ON THE RISE
WHITEPAPER SEPTEMBER 2018
PREPARED FOR:
WHITE PAPER
CX Investments in Banking and Insurance are on the Rise
P1 | © Keypoint Intelligence
Document Introduction ........................................................................................................................................ 2
Marketplace Invests in CX ............................................................................................................... 3
The Current State of CX .................................................................................................................... 4
How CX Should be Framed and Defined ..................................................................................... 6
The Hidden Costs of Not Bringing CCM into the CX Discussion ............................................ 7
CX Strategy Enabled by Growing Use of Cross-Functional Teams ...................................... 9
Conclusion .......................................................................................................................................... 10
Figures Figure 1: High Incidence of CX Strategies within UK Enterprises ................................................. 3
Figure 2: Development of Unified CX Strategies Remains a Work in Progress .......................... 4
Figure 3: Where Ultimate Responsibility of Customer Experience Resides ................................ 6
Figure 4: How Financial Institutions Should Approach CX Strategy ............................................ 7
Figure 5: How Consumers React When They Have Questions Pertaining to Statements ....... 8
Figure 6: Interviews Validate Many Banks Enabled Workflows to Drive Collaboration .......... 9
cont
ents
WHITE PAPER
CX Investments in Banking and Insurance are on the Rise
P2 | © Keypoint Intelligence
Introduction Consumers have come to expect personalised experiences when they interact with
companies. Regardless of where they are in the customer journey, consumers want
companies to know the full range of products they engage with, anticipate needs or
interests and remember prior interactions. Financial services firms, many of whom are
behind the curve, recognise the need to enable better customer experience (CX) across
all phases of the customer journey and communication channels. This is driving substantial
increases in budgets allocated to CX-related initiatives.
Barriers between organisational silos are coming down gradually as financial services and
insurance companies strive to improve customer interactions. Change may be gradual;
however, momentum has undoubtably increased. Steering committees, a growing
number of formal CX teams, or in some instances CXO’s, are driving investments to
modernise customer journeys using APPs, web portals, email, SMS/text, etc.
Often the goals of CX investments is to employ the voice of the customer (VoC) to drive a
higher Net Promoter Score (NPS), or to achieve increased sales. Whilst these factors are
extremely important, they only consider specific phases of the customer journey. To be
truly effective, CX strategy should address the full spectrum of customer interactions.
Ironically, operational groups that manage high volumes of complex communications
(e.g. statements, bills, regulatory documents) are often not tightly integrated into CX
initiatives. Yet, customer communications management (CCM) plays a key role in CX
because of the sheer number of interactions that are involved, and the criticality of these
very personal interactions carry significant weight in the context of the overall experience.
Furthermore, CCM operations often oversee, or are considering implementing, software
that drive enablement of digital channels. This IT infrastructure enables the conversion of
print touchpoints to digital ones (e.g. secure email, SMS/text), which in turn allows for real-
time data capture that exposes how customers are interacting with communications.
Unfortunately, other areas of the enterprise tasked with a range of CX initiatives are often
not aware of the capabilities of CCM. They in turn are implementing additional software,
or engaging a range of third-parties, whose offerings are bolted onto legacy IT platforms.
As a result, financial services firms that strive to create a unified customer experience,
often overlook the benefits CCM can bring to CX. This raises an important question. How
should CCM operations be aligned with CX initiatives to leverage the full capabilities of
existing software investments or service provider capabilities?
WHITE PAPER
CX Investments in Banking and Insurance are on the Rise
P3 | © Keypoint Intelligence
Marketplace Invests in CX Keypoint Intelligence recently conducted a study in the UK, interviewing senior executives
within banking and insurance firms. All the executives had responsibilities over consumer or
business products and had oversight over communication strategies designed to improve
customer interactions. Although they hailed from different roles and responsibilities, they
had one key factor in common. Their companies’ budgets allocated to improving
customer experience have increased significantly over the past two to three years.
Additional evidence of the rise in CX-related capital expenditures was found in two
different surveys Keypoint Intelligence fielded in late 2017. The first study focused on
business executives in banking, insurance, telecommunication, utilities and retail, whose
responsibilities involve oversite of transactional communications. The second study
surveyed executives with responsibilities involving marketing communications. Both surveys
had a sample size of 75 UK respondents. The study found that 91% of enterprises in the
transactional communication survey had a CX strategy in place. Within the marketing
communication study, 75% of enterprises had a CX strategy.
Figure 1: High Incidence of CX Strategies within UK Enterprises
The question is, however, what does it mean to have a CX strategy in place? Indeed, the
most recent study involving in-depth interviews with banking and insurance executives
revealed they have many different perceptions of what CX means, depending on where
they sit within their respective organisations. Their perspectives will be influenced and
shaped by the products and services that fall within their areas of responsibility, and the
unique customer journeys they are tasked with managing.
For some, the focus is on customer acquisition and retention. For others, onboarding is the
focus. Still others may be focused on loan applications, contact centre interactions,
91% 75%
TransactionalCommunications
MarketingCommunications
N = 75 UK respondents N = 75 UK respondents
The percent of UK companies indicating they havea customer experience strategy in place.
Source: 2017 Transactional and Marketing Communications Surveys
WHITE PAPER
CX Investments in Banking and Insurance are on the Rise
P4 | © Keypoint Intelligence
customer web portals, or maybe even, transactional communications. The common
denominator is the goal to create more efficient customer journeys that address rapidly
changing customer expectations and to produce more profitable customer interactions.
The common tools are digital channels, more efficient use of data, and increasingly,
artificial intelligence (AI). Unfortunately, a common theme is that Customer Experience
strategies are often not holistic. They tend to focus on specific stages of the customer
journey; initiatives undertaken by the front office (sales, marketing and product teams) are
not coordinated with initiatives or investments made by the back office (operations).
The Current State of CX The disconnect between front office and back office operations is not surprising. Although
banking and insurance firms are making CX investments, most are a long way off from
developing a unified customer experience strategy. Among the executives interviewed,
the consensus was that their institutions are still in relatively early stages. When asked to
rate on a scale of one to five, how far along their company is in the process of developing
a unified customer strategy, the majority rated their institution a three. Each executive
spoke to their institution’s unique circumstances; however, all acknowledged that the
implementation of new technology and workflows is a slow process. This reality plays a role
in why the front office can overlook how back office CCM functions can contribute to CX
initiatives.
Figure 2: Development of Unified CX Strategies Remains a Work in Progress
Factors driving the slow pace of change are many. The size and complexity of these highly
regulated institutions typically necessitates a long planning process. For changes that are
How far along in developing a unified CX strategy?
Ideally we want to get customer centric in our strategies and decisioning;tends to be more product based. We would like to decision it
at a more customer level – Large UK Bank
1
Hasn’t started
2
Planning
3
Resourcing
4
Implementing
5
Implemented
• Slow planning process• Bureaucracy• Legacy systems• Customer adoption
The Challenge
“Probably a 3. I have been [here] for 21 years and have seen many technology projects taking place. I see there are still a lot of projects and investment to be made in the coming years to bring us to a “5”. Nevertheless, we are still ahead of the curve.” – Global Bank
WHITE PAPER
CX Investments in Banking and Insurance are on the Rise
P5 | © Keypoint Intelligence
not fundamental to how the bank is run, tactical change management can be
implemented more rapidly (e.g. changing email templates for individual campaigns). In
other cases, CX initiatives that fundamentally change the customer journey (e.g.
partnering with a FinTech company to develop a loan application app) requires
substantial input from a broad range of stakeholders (e.g. legal, compliance, IT, etc.) and
across lines of business, which adds complexity. These initiatives also require approval of
additional budget and compete internally for funds with other CX projects.
There is also the challenge of getting new technologies to integrate with legacy systems.
As many executives chartered with customer journey enhancements will echo, the sharing
of data between legacy systems and other software systems or applications is never easy.
In many cases, banks would like to implement change more rapidly; however, segments of
their customers are slow to adopt new channels of interaction. As a result, the customer
journey must also encompass traditional channels of communication such as branch
offices, contact centres, and mailed statements.
Surmounting these challenges is difficult. As a result, groups chartered with driving CX
initiatives often take a narrower view that focuses on select components of the customer
journey. Another dynamic that fosters a narrower focus is that these projects often come
out of product groups. Keypoint Intelligence’s research found that product management,
customer experience or customer onboarding were common areas driving these
initiatives. This drives a bias towards customer acquisition and cross-sell, and by extension,
the role CCM operations can play was not considered.
Again, the 2017 surveys of executives with influence over either transactional or marketing
communications found that Chief Marketing Officers (CMO) are frequently those with
ultimate responsibility over customer experience. This helps explain why product
management groups are driving investments to improve customer journeys. Also, both
studies found that Chief Customer Officers (CCO), CEOs, and from the perspective of
transactional communications, CIOs, are frequently the ones with the ultimate
responsibility for improving customer experience. Moreover, the data show that the title of
Chief Experience Officer (CXO) is beginning to become a formal position for some
enterprises. Notably, both surveys highlight that Chief Operating Officers (COO) are rarely
the key stake holder when it comes to customer experience, which fosters an environment
that hinders consideration of how CCM, currently considered an operational function, can
contribute to more efficient customer journeys.
WHITE PAPER
CX Investments in Banking and Insurance are on the Rise
P6 | © Keypoint Intelligence
Figure 3: Where Ultimate Responsibility of Customer Experience Resides
How CX Should be Framed and Defined Regardless of where banking and insurance firms are in the development of a codified CX
strategy, they should take a broad view when attempting to create value streams within
customer journeys. At its core, CX is about enabling personalised and streamlined
experiences to produce value, which is measured by acquisition & retention rates,
satisfaction, Net Promoter Score (NPS), and of course, revenue.
Keypoint Intelligence believes CX strategy should be grounded on the following principles:
• Build an infrastructure via a combination of technologies, processes and services
that enables personalised and efficient experiences across the customer journey
• Adopt a holistic view of touchpoints that customers engage with from cradle to
grave to help avoid unintended negative experiences
• Develop online and offline options for interaction targeted at specific phases of
the customer journey, without forgetting how other channels or touchpoints may
affect the customer experience
CIO, 28%
CMO, 20%CCO (Chief Cust. Ofc.),
17%
CEO/Mng. Dir., 15%
CDO (Chief Dig. Ofc.),
9%
COO , 7% CXO , 4%
Q: Who in your company is ultimately responsible for improving customer experience/engagement?
Transactional Communication Respondents
N = 75 UK Respondents
CMO, 24%
CEO/Mng. Dir., 21%
COO , 15%
CCO (Chief Cust. Ofc.),
12%
CXO , 12%
CDO (Chief Dig. Ofc.),
12%CIO , 4%
Marketing Communication Respondents
N = 75 UK Respondents
Source: Keypoint Intelligence 2017 Transactional and Marketing Communications Surveys
WHITE PAPER
CX Investments in Banking and Insurance are on the Rise
P7 | © Keypoint Intelligence
Figure 4: How Financial Institutions Should Approach CX Strategy
If one adopts this view of how CX strategy should be approached, then it becomes clear
why operational functions, such as customer communications management and
transactional documents, should not be overlooked. Front office and back office groups
often share the same objective, which is to enable more digital channels. Also, they both
work towards the maintenance of consistent branding and they both play critical roles
that directly impact customer experience.
One of the interviewees summarised this point of view as follows: “CX strategy has
[historically] been siloed. There is now a team responsible for looking at CX and customer
journey. You have to do that across every event, or you won't be able to respond as you
should.”
The Hidden Costs of Not Bringing CCM into the CX Discussion By not taking a holistic view and including CCM operational teams in CX initiatives,
banking and financial services teams risk incurring unintended costs. Acquisition
campaigns on credit cards, personal loans or introductory offers for other products provide
a good example of how unintended consequences can occur.
When customers receive their first bills and statements, they will look to see if what they
signed up for is in fact what they are receiving. If customers misunderstand the information
in their first statement or bill, their first action is to call the contact centre - an expensive
proposition for any enterprise. The rise in partnerships with FinTech’s, which increases the
number of distribution channels, creates even more room for customers to have questions.
Often enterprises attempt to address anticipated questions within contact centres by
providing automated responses. However, this merely treats the symptom of the problem
and ignores the cause altogether. If CCM teams were an integral part of the CX
Targeted
Holistic view
Combination of processes, technologies and services
w Provides the infrastructure needed to enhance the multifaceted aspects of customer experience
w Encompassing the full spectrum of touchpoints within the customer journey
w Strategies that create efficient interactions across all types of interactions
Building Blocks of CX Strategy Development
WHITE PAPER
CX Investments in Banking and Insurance are on the Rise
P8 | © Keypoint Intelligence
discussion, then thousands of phone calls, and negative first interactions, could be
avoided in the first place.
A Keypoint Intelligence 2017 survey of 500 UK consumers found that 59% of customers will
pick up the phone and call a service provider if they have a question regarding their
statements and bills. In fact, a phone call remains the most common means of
communication when consumers have questions.
Figure 5: How Consumers React When They Have Questions Pertaining to Statements
Compounding this problem is the fact that many enterprises cannot track the number of
calls that are triggered by communications. This reality was exposed in the recent study by
a respondent on the operational side of a large bank: “Currently we can’t track how
many calls we might be getting from communications.” Notably, for this bank at least, the
problem is being solved because of the implementation of CCM software, which illustrates
perfectly how CCM can positively impact CX.
There are also the opportunity costs associated with CX teams not being aware of CCM
investments and capabilities. For example, banks and financial institutions are investing to
drive more transactional communications through digital channels. This creates a
significant opportunity to capture real-time data on how frequently consumers interact
with their documents. In contrast, these institutions have little insight into how consumers
interact with mailed statements, except through contact centre interactions. The ability to
capture live data on documents that play an important role in the customer relationship
opens additional insights into critical touchpoints within the customer journey. All too often,
the opportunity is not exploited.
0%
6%
7%
8%
25%
39%
50%
59%
0% 10% 20% 30% 40% 50% 60% 70%
Other
Social media
SMS/Text message
Physical mail
Web contact form
Online chat
Telephone
Q: When you have a question about a bill or statement, how do you contact your provider?
N = 500 UK respondentsSource: Keypoint Intelligence 2017 Consumer Transactional Communications Survey
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CX Investments in Banking and Insurance are on the Rise
P9 | © Keypoint Intelligence
Furthermore, marketing and product teams frequently deploy software or engage third-
parties to enable communication delivery via digital channels. Increasingly, these activities
are part of CX-related initiatives. This was a common trend identified within the discussions
with banking and insurance executives. Keypoint Intelligence’s marketing communication
survey validates this finding; it found that
• 45% of enterprises are using an email marketing platform or service and another
33% were planning to adopt
• 43% indicated they are using a CCM platform/service with another 35% indicating
they are planning on implementing soon
This leads to a multitude of third-parties being engaged, or duplicative software
investments, because operational teams are often simultaneously deploying CCM
software or engaging additional third-parties to support delivery of transactional
documents through digital channels.
CX Strategy Enabled by Growing Use of Cross-Functional Teams Fortunately, the recent research highlighted that important changes are taking place
within banking and financial services that create the environment whereby CCM
operations can become more central to the CX strategy.
Certainly, many enterprises struggle when making changes to the customer journey. This is
nothing new. However, the recent study revealed that in addition to spending increases
on CX initiatives, there has also been an increase in the use of cross functional teams when
implementing changes to customer journeys. The formation of steering committees and
change management teams is on the rise. Financial services, and banks in particular, are
proactively making investments to enable collaboration and interactive workflows to
ensure a return on investment from CX investments.
Figure 6: Interviews Validate Many Banks Enabled Workflows to Drive Collaboration
Change management teamincluding program managers and project
managers with IT and product team
All our departments,customer service, finance, IT, etc. all working together, not working in silos
Spent a lot of money to NOT be a siloed business
Col
labo
rativ
e
Marketing and operations work together
Interactive
Steering committee.Function is to join all the dots.
“[Our bank has a] strong cultural piece in stakeholder engagement – Who needs to know most about something before it is launched? Key thing we worked on is collaboration. To make sure you have the right people at the table” – Large UK Bank
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CX Investments in Banking and Insurance are on the Rise
P10 | © Keypoint Intelligence
This change in the marketplace has important implications regarding organisational
alignment. As the use of multi-disciplinary teams rises, the barriers that have existed
between different business units and slowed the pace of change are coming down.
This change creates the opportunity for these enterprises to incorporate CCM operational
units within CX initiatives. One key benefit of this would be tighter governance over
marketing, operational and transactional communications. Currently, differences in
processes can exist when there are changes to communication templates. This leads to
inconsistent use of clear and concise language, voice, brand and customer effectiveness
reviews. Improved governance enabled by CCM, across all events, would
• Produce more consistent customer experiences
• Ensure improved regulatory compliance via consistent use of the appropriate
approval channels
• Enable the correct call to action embedded in the full spectrum of
communication types
Another benefit stemming from consistent governance processes is the ability to more
effectively monitor how customers interact with these communications, and to prevent –
you guessed it - unwanted calls into the contact centre.
Conclusion The financial services industry is taking customer experience seriously. Budgets for projects
designed to improve customer journeys have increased significantly, driven by changing
customer expectations. Along with the increasing expenditure have come changes to
organisational alignments. As a result, there are fewer barriers between the various
business units. Certainly not all financial institutions are progressing at the same pace.
Insurance companies, as a group tend to lag the broader market when it comes to CX
strategy and not all banks are equally progressive in their approach to customer
experience. Nevertheless, there is change afoot within the marketplace.
This changing environment presents banks and insurance companies with the opportunity
to take a broader, and more effective, approach to customer experience. They should
recognise the important contribution operational business units chartered with CCM make
to CX and integrate them into the growing number of interdisciplinary CX teams emerging.
Otherwise, as banks invest heavily to improve customer experience as individual business
units, they may inadvertently compound the complexity of legacy IT systems, deploy
instantly redundant software systems, proliferate the range and number of partners and
services vendors and potentially jeopardise the sought for CX improvement and
subsequent revenues that should follow.
Con
clus
ion
“We can then analyse complaints to make sure these letters are not driving customers to phone in and query because it is not clear from the letter.” – Large UK Bank