The Title Of This Proposed Research Is The Influence Of Customer Services In The Financial Industry. Research Paper Sample
Influence of Customer Services In Financial Industry
This research paper focuses on the study of importance of customer support and services in the financial industry. The paper will explore the various aspects of customer services as expected by the financial industry customers and the impact of these services in improving the customer experience.
The research analyses available literature to review the possible effects of the customer services and how does it relate to the financial industry on the whole and for the customer of this industry.
Today successful business means much more than merely providing the business services to the customer. In this era of social media bad business has no place in the market. Conventionally, financial industry believed that customer services and provision of enhanced customer satisfaction was a major concern for FMCGs and had little or no effect to the customer of the financial industry. Very few financial institutions made any major investment on the provision of customer support services and least bothered about the customer experience.
However as the consumer profile is changing, their expectations from their service providers are also changing. The modern customer assumes same level of customer services from every company regardless of the industry. Thus how they want to be treated by a clothing brand defines the level of expectation for their bank.
According to a global Trust Barometer study by Edelman, consumer trust is on decline in various industries in fact the financial industry is lowing the trust at much faster pace than any other industry as shown in the figure below:
Figure 1 Consumer Trust Survey,
Analyzing these trends, any futuristic financial institution especially banks, as they deal directly with the consumer market need to facilitate their customers through awesome experience that caters them with personalization.
The above stats show that a majority of consumers do not trust their financial service providers, however the lower trust is not due to the financial service they provide instead the level of customer support and services stand as the key factor for trusting a business.
The 2014 report of the trust Barometer by Edelman showed the similar trust scale for financial institutions and in a comparison to other business the trust ratio between consumer businesses with financial services was 49% to 48%.
Figure 2 Comparison of Trust,
In 2014 J.D. Power conducted a Retail Banking Customer Satisfaction Study in US revealed that while customer satisfaction in big banks improved by 23 points however that for midsize banks only upgraded 11 points.
These stats show that the financial services industry lacks the customer trust, in order to understand the effects of lack of trust this research will analyze various literature available to study the important of customer services in the financial industry.
Based on the above discussed problems with the customer services in financial industry the research is based on the question that, “how customer does services influence the customer perception and trust of the financial industry?”
In order to answer this question, the research will focus on some key areas of customer’s expectations that respond to the lack of trust. The research will explore why customers do not trust a business that takes care of their most sensitive belongings. Additionally the study will also elaborate how financial industry needs to revamp or rethink about its customer experience and what factors will decide the next generation of financial service providers.
Why is Customer Service Important?
Before understanding the influence of good customer services in the financial industry it is important to understand why is customer service important at all. In a survey conducted by Forrester in 2011 to study customer experience state of the industries, 7,700 US consumers were surveyed for their experience with various companies in about thirteen industries with almost 154 brands. The report stats showed that about 36% of the correspondents would tell their social network or friends of any negative experience with their financial institution and about 18% switched to another brand.
Retail banking consumer compares their banks with any other service provider and thus consumer banks need to understand and fulfill their expectations. The global banking consumer survey of 2014 by EY states that consumers banking preferences depend highly upon the way they are treated by their banks. Though stability of a bank still is the number one factor, however personalized customer services stand as the second most important factor.
The stats by PWC show that designing a customer centric organization has been the top priority for about 63% CEOs across industries. Based on that fact, a detailed report by KPMG discusses in detail how and why customer experience will be the most critical factor for business success in the financial industry. The following table shows the literature selected to review and analyze to study the role of customer services and how it influences the trust on financial services companies.
Figure 3 Selected Literature
The publication by KPMG “Customer Experience Barometer” surveys and reports how critical is the level of customer support provision in the financial industry. This paper states that the customers feel a lack of staff engagement and direct communication for quick response. The researched stats presented also show that self-service model has a positive impact on the customer satisfaction however the customer still feels an importance of assurance from the staff.
Interestingly, the paper shows that in a global survey for banking customer satisfaction, the percentage of happy customers was directly proportional to the level of investment in customer experience in that country. As the figure below shows that the bank customers in China, US and Australia have a better level of satisfaction as compared to the rest of world. While figure 4 shows the most satisfied customers, figure 5 shows how various banks have taken measures to enhance their customer experience that has made influenced their customer trust.
What Customer Wants?
The above review of the paper establish the fact that customer experience derives customer satisfaction or loyalty. A company that provides better customer services has better chances against its competitors in any industry. The paper by Temkin group, “The ROI of Customer Experience” discusses what does a customer expects as the awesome customer experience. The paper provides a comparative analysis between 10, 000 US consumers and 3000 UK consumers across various industries and recorded their expectations. According to the surveyed customers, the most credited aspects of their dealings with their service provides were
Functional: Service availability for the customer enabling them to accomplish their tasks.
Accessibility: the ease of performing the routine as well as special tasks
Emotional: how the company made them feel while fulfilling these tasks?
These aspects show that customer experience does not specifically include only the customer service’s staff instead every staff member of that company needs to be follow the CS agenda of the company and strive to connect with the customer at professional as well as personal level.
Though most of the financial services’ brand strive to make the functional aspects strong, most lack the emotional attachments and the ease of doing business that affects the customer at personal level.
A survey of UK retail banking industry showed that consumers believed that emotional attachment was foremost important in attaining the customer loyalty. As the figure below shows below customers want their banks to understand them and their preferences before providing the functional aspects. The results of the study showed that the customers who were more connected to their banks felt more secure, relaxed, valued and supported thus enjoyed an awesome customer experience.
Figure 6 Personal Connection
The Temkin group report additionally shows that the customer experience efforts have to be consistent, integrated with the corporate policies, continually improved and become a part of the corporate culture to gain advantages for the business. According to their survey banks that have invested in their customer support services have gained about additional $273 billion worth of business from additional purchases and recommendations from the satisfied customers.
How To Achieve Customer Experience?
Today the customer is more empowered and equipped than ever before. While some years ago advertisements were enough to grab the attention, today the customer follows the online blogs, virtual forums and social media to gain more insight on what is best for them before they come to their financial service providers. Conventionally, banks and financial institutions lagged behind in core marketing and promotions however for the egoist customer today every company needs to ensure customer engagement to retain a customer.
The article published by McKinsey & Company, ” We’re all marketers now”, identifies and elaborates on the customer engagement strategy to provide a memorable customer experience.
Even though functional and ease of business play an important role in satisfying a customer, with the growing online community, Omni channel banking and Omni channel support is a presumed feature for financial industry. More than half of the financial transactions take place online today, web and mobile apps are being preferred over branch banking. Every financial company need to have a clear picture how their customer services represent their corporate goals their product development strategy and their marketing/PR initiatives. Loyalty is a byproduct of the right mix of these factors.
When functional ease and accessibility are discussed, technology plays an integral part. Every customer today wants to be able to use any channel, such as branch, phone, email, web or mobile app inter changeably for their decision making and support services. Banks need to provide Omni channel banking support to keep the customer satisfied and ensure that each channel has appropriate measure of customer service and support to resolve issues instantly. An important aspect of cross channel dealing is the availability of context sensitive customer data to make the right decisions.
The expectation of Omni channel approach can be demonstrated from the stats in the article ,” Big data is key to effective financial services customer service”, showing that in a survey about 12% respondents accepted that they would change their financial service provider if they do not offer cross channel support even though only 16% respondents use mobile channel,4% access through Facebook and 1,2% through twitter, still the ease of switching a channel according to needs was appreciated by most of the customers.
The correlation between customer services and Omni channel support and services cannot be overemphasized. An article by CSP (Customer Services Profile) also highlights the advantages and considers it as the trend that will drive the customer experience in the financial industry. The growing trend of mobile and smartphones is the key factor behind Omni channel model as these devices enable the anytime and anywhere banking concept.
The same article points to the fact that it’s not only the number of channels that matter to customer experience, in fact the way companies use the data collected through these channels is the actual deciding factor. By using customer intelligence and analytical tools financial institutions can provide proactive and personalized customer service, thus can deliver the awesome customer experience.
Big data To the Rescue
As the business channel increase so does the amount of data. Currently, only US banks have 1 Exabyte of data about their customers that can be used in various ways to provide proactive customer services to their customers. Typically it is used as in the figure below:
Figure 7 How To Use Big data
The use of this data enables financial companies to
Identify customers who might switch brand
Identify customers who might engage in fraud
Understand a customer’s decision making journey and facilitate them accordingly across channels.
Better product development and maturity
Lower risks of breaches, fines, money laundering and credit defaults.
The business world today is driven by the new generation of customers who want to be treated exceptionally. To satisfy this breed of customers, customer services and support have to be more than what they conventionally had to be. The above discussion and review showed that the level of customer services influence customer expectations, trust and loyalty of customers. In addition to that continual and focused approach in customer services can assist businesses to provide personalized services, limit risks and frauds as well as increase yearly revenues for the business due to recommendations and additional purchases. The literature review also discusses the ways the customer data can be utilized in achieving outstanding customer experience and gaining a reputation in the industry.
Anderson, J., 2013. Customer Experience Barometer, s.l.: KPMG.
Brief, B., 2013. Customer Loyalty in Retail Banking: Global Edition 2013, s.l.: Bain & Company.
Bunge, W., 2013. The Importance of the Omnichannel in Financial Services, s.l.: Cisco.
CSP, 2015. WHAT INFLUENTIAL TRENDS WILL DRIVE FINANCIAL SERVICE CUSTOMER EXPERIENCE IN 2015?. [Online] Available at: http://www.csp.com/influential-trends-will-drive-financial-service-customer-experience-2015/#.VO-OSvmUcwQ[Accessed 2015].
Edelman Insights, 2014. Edelman Trust Barometer: Financial Services Industry. Edelman Insights, February.
Ernst & Young Global Limited, 2014. Global Consumer Banking Survey 2014:Winning through customer experience. [Online] Available at: http://www.ey.com/GL/en/Industries/Financial-Services/Banking---Capital-Markets/Global-consumer-banking-survey-2014[Accessed 2015].
Harris Interactive, 2014. Banking Relationships. [Online] Available at: http://www.harrisinteractive.com/uk/Portals/uk/UKImages/Customer-Power-Retail-Banking-relationships.jpg[Accessed 2015].
Nilsson, J., 2013. The Importance of Trust in the Financial Services Sector. Brandwatch, January.
Ofori-Boateng, C., 2013. Business Intelligence Infographic Review: Alacer. [Online] Available at: http://go.christiansteven.com/blog/bid/310798/Business-Intelligence-Infographic-Review-Alacer
Perlman, J., 2014. Customer Satisfaction with Banks at All-Time High, but Areas of Weakness Signal Competitive Vulnerabilityf. [Online] Available at: http://www.jdpower.com/press-releases/2014-us-retail-banking-satisfaction-study#sthash.s2bYZoiW.dpuf
PWC, 2013. How to build a customer-centered organization to gain competitive advantage. [Online] Available at: http://www.pwc.com/us/en/business-strategy/customer-experience-consulting.jhtml[Accessed 2015].
Reitsma, R., 2011. The Data Digest: How Do Consumers Respond To Bad Customer Service?. Forrester, February.
Taylor, J., 2013. Big data is key to effective financial services customer service. [Online] Available at: http://www.mycustomer.com/blogs-post/big-data-key-effective-financial-services-customer-service/165014[Accessed 2015].
Temkin, B., 2012. The ROI of Customer Experience, s.l.: Temkin Group.
Tom French, L. L. a. P. M., 2011. We’re all marketers now, s.l.: Mckinsey & Company.
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