Delivering Customer Experience in a Third-Party Financial Services Model
In the highly competitive financial services industry, third-party providers have emerged as the go-to source for organizations looking to do more with less: less distraction from core functions, less capital investment, less internal acquisition of specialized functions. Sixty-five percent of financial services firms now use third parties, and the majority plan on maintaining or increasing third-party involvement in the future.1
Over the last few years, as financial organizations began outsourcing more sensitive functions—mobile banking, payment processing, customer service or data processing—their risk exposure has broadened. In an effort to mitigate growing risk factors, the rising tide of regulation stemming from the 2008 financial crisis has extended to third-party organizations. Security breaches, compliance issues and service interruptions are among the more high profile—and highly regulated—risk factors financial services firm accept and manage as a function of the third-party model.
Experience leakage, where in a third-party, model the primary organization loses control of the customer experience, steals value with inconsistency.
Yet in their diligence around risk management, financial services firms are too often failing to manage against one glaring and equally significant risk factor: experience leakage.
In 2016, nine out of 10 companies planned to compete primarily on the basis of customer experience. Today there is nothing, not even price or quality, that is more important than the experience you provide.2 And in an increasingly commoditized financial services marketplace, providers must differentiate with experience, education and relationships.
Experience leakage, where in a third-party model the primary organization loses control of the customer experience, steals value with inconsistency. In Customer Experience (CX), consistency is central to trust, and is the foundation on which CX’s four core dimensions—empathy, ease, orchestration and relevance—are built and delivered.
A recent study of US retail bank customers found the annual revenue potential between those receiving the best and the worst CX was $300 per customer.3 In order to capture revenue potential and to differentiate in an increasingly commoditized market financial services organizations must now develop new strategies and management techniques to deliver a consistent high quality customer experience across party lines.
1.“Financial Services Firms Expect to Work More and More with Third Parties,” CFO Publishing, July 3, 2014
2. "Gartner Survey Finds Importance of Customer Experience on the Rise—Marketing Is on the Hook,” Gartner, Sept. 29, 2014
3. “CX Industry Spotlight: Retail Banking,” Forrester, Aug. 14, 2015
4. “ROI of Customer Experience, 2015,” Temkin Group, October 2015