In the financial services industry, it’s no surprise that customers come first. As a result, many firms have shifted their focus to delivering products and services on the customers’ terms, across branch, desktop, and mobile locations. Indeed, customer experience (CX) is the top 2020 strategic priority for industry leaders, cited by 88 percent of respondents in our annual Beacon financial services study. Yet, as financial services firms strive to deliver seamless, connected customer experiences, there’s an accompanying imperative to address efficiencies and mitigate costs, with operational efficiency also an important priority for the industry (85 percent of respondents). The recipe for success requires a careful balance of these areas, determining the investments that will achieve both these aims.
Compounded by the challenges brought by these dual priorities, firms face unprecedented pressure to evolve continuously and at scale, addressing the regulatory compliance requirements that compete for the time and resources of financial services teams. With CX and operational efficiency key initiatives for firms this year, many organizations may be questioning which improvements to prioritize, how to prioritize them, and how to maximize the aims of both experience and efficiency while also meeting regulatory requirements.
Left unanswered, these questions can spell lack of clarity and organizational misalignment for financial services leaders. And when organizations are unclear on the best path forward for improvement, the result is ineffective prioritization, inconsistent evaluation of performance, and diminished returns from investments. Across industries, 75 percent of organizations cite “lack of clear vision” as the number one reason that transformations fail to achieve their anticipated value, according to our research.1 As a result, financial services firms may miss opportunities to prioritize initiatives for increased and accelerated returns—returns that will drive value at the intersection of both CX and operational efficiency.
By looking more holistically at the value of continuous improvement and creating a shared vision for the value of transformation, firms will have a North Star to guide how they prioritize efforts to maximize value. Particularly as financial services firms move from vertical, siloed organizations towards matrixed organizations with horizontal ways of operating focused on customer solutions, this approach will nurture greater alignment and cross-functional collaboration – an element that organizations cite as critical to the success of transformation (cited by 50 percent of organizations in our research).2
We recently helped a B2B financial services organization unlock this opportunity by applying our Change EconomicsSM solution. Mirroring the wider industry’s focus on CX and efficiency, the organization sought to grow its major business segments but struggled to engage and retain customers.
We started with an alignment and visioning session to analyze the firm’s brand promise, customer value proposition, business differentiators, and service aspirations, creating alignment on a future state experience vision across functions. We then conducted a full discovery, supplemented with primary employee and customer research and targeted analytics, to reveal gaps between delivered experience and customer expectations. The solution process culminated in 60 potential initiatives to address recurring CX issues, which we prioritized based on the shared vision of value that we’d co-created with the client at the outset of the initiative. Our prioritized programs showed quantifiable opportunity to improve product use and retention, reduce service costs, and drive revenue. Ultimately, our work helped the firm distill a clear set of improvement priorities that would transform the B2B customer onboarding experience—one of the most critical aspects of the end-to-end client experience.
Financial services firms seeking to improve CX while driving business efficiency and mitigating costs can get started in four key steps:
- Define vision and desired outcomes: Agree upon a unifying vision and guiding objectives that establish the case for change.
- Define value levers: Understand value drivers, both internal and external, and determine their importance based on impact to all stakeholder groups (including clients, employees, and partners).
- Identify and prioritize initiatives: Define, rank, and prioritize initiatives according to the importance of the full stakeholder experience.
- Build value model and change agenda: Establish the agenda for change and improvement, laying out the sequence of initiatives and supporting business cases.
Ultimately, the Change Economics approach results in a set of priorities that are not static or linear, but rather, serve as the starting point for continuous improvement that sustains growth and performance over time. By strengthening the capability for continuous improvement, financial services firms will be equipped to address the top CX and operational efficiency priorities today, but also keep pace as those priorities will inevitably continue to evolve.
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