10x Banking: Banks Are Losing Customers from Poor CX
Banks worldwide are losing one-fifth of their customers because of poor CX, overlooking what genuinely matters and mistaking innovation for true digital transformation, according to new research by 10x Banking, the London-based fintech provider of a cloud-native software-as-a-service (SaaS) bank operating system.
The research also discloses that senior decision-makers in banks recognize they are not only losing valuable customers—one in eight banking leaders state they have lost 30-40% of their existing customers—but an alarming two-thirds (64%) admit that their slow rate of digital transformation has directly resulted in them missing out on winning new customers.
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Antony Jenkins, founder of 10x Banking and former CEO at Barclay Banks, says most of the banking industry has overlooked the customer, taking a product-focused approach instead. “Banks need to think about solving problems in a way that makes customers’ lives easier,” he says “This is a good thing for the bank and the customer, who will be more loyal over time as a result.”
Jenkins also states that banks often mistake innovation for transformation—the former being a linear series of marginal improvements, whereas true transformation is a non-linear step-change in improvements, beginning with a material improvement in CX. “Many banks might convince themselves that releasing an app or going digital means they have been on a journey of transformation, but the reality is that very few banks are undergoing true change at their core,” Jenkins remarks.
The direct impact on the bottom lines of banks, coupled with the current economic uncertainty within the banking sector, has resulted in three-quarters of banks (74%) attempting this year to accelerate their digital transformations, which offers some encouragement that decision-makers are seeking to address the issue.
Forrester: CX Quality of US Brands Falls for Second Consecutive Year
For the second year in a row, the CX quality provided by US brands fell as companies struggled this year in their attempts to deliver great customer experiences, according to the US Customer Experience Index Rankings 2023 from Forrester Research.
Although more than 80% of business leaders indicate that CX improvement ranks as a high-priority item for their organizations, just 6% of brands saw a significant increase in the CX quality they provide to customers, compared to 10% in 2022. The findings are based on Forrester’s Customer Experience Benchmark Survey, which collects data from more than 96,000 US customers across 221 brands and 13 industries. The CX Index score from Forrester is a proprietary measure that gauges how successfully a company delivers experiences that create and sustain customer loyalty.
This year’s results show that luxury auto manufacturers and retailers are the only industries to significantly improve their overall CX quality. Brands from both industries, including Lexus, Lincoln, Infiniti, and Tractor Supply, joined the top 5% of brands, considered the elite in the entire CX Index. The top CX brand this year is pet food retailer Chewy.com, with a score of 84.3; followed by Navy Federal Credit Union in second place with a score of 82.5. Altogether, 7 of the 11 elite brands are repeats from 2022: Chewy.com, Navy Federal Credit Union, e-commerce company Etsy, grocery chains H-E-B and Trader Joe’s, and financial services firm USAA, which appears twice on the elite list for both its credit card and auto/home insurance businesses.
The drop in CX quality this year was caused by a decrease in the average score of the three key CX measures of ease, effectiveness, and emotion. Emotion was the area that registered the smallest dip, with elite brands evoking an average of 29 positive emotions—including feeling happy, valued, and appreciated—for each negative emotion, such as frustration and annoyance. In comparison, delivering easy and effective experiences was tougher as companies strove to deliver great CX at scale amid a talent-constrained recession, the findings show.
Related Article: White House Requests More than $500 Million for CX Initiatives
“High-quality CX isn’t a nice-to-have—it’s a revenue driver,” says Pete Jacques, principal analyst at Forrester. “Even small improvements in CX quality can reduce an enterprise’s churn and increase its share of wallet, adding up to millions of dollars in revenue.”
Rick Parrish, vice president and research director at Forrester, says that despite the drop in CX quality, more organizations are aware of the need to prioritize their customers’ needs to drive business growth. “When companies invest in improving their CX quality, they receive many benefits, including higher customer loyalty, retention, and devotion.”
Gartner: Customer Use of Chatbots Remains Minimal
Just 8% of customers used a chatbot during their most recent CX, a new survey from Gartner shows, and only 25% of that portion indicated they would use a chatbot again in the future. To spur the adoption of chatbots in the future, chatbots need to help resolve customer issues, the survey findings suggest.
“While many customer service and support leaders look to chatbots as the future of the function, customers clearly need some convincing,” says Michael Rendelman, senior specialist on research at Gartner. “To improve chatbot adoption, the key is to focus on improving the chatbot’s ability to move customers’ issues forward.”
Resolution rates, however, vary greatly by issue type: Just 17% of billing disputes are resolved by customers who used a chatbot at some stage in their journey. In comparison, resolution rates are much higher—at 58%—for customers making a return or a cancellation.
Qualtrics: AI Proves Exciting for Executives, but Less So for Employees
New research from experience management company Qualtrics reveals that executives are more excited about the role of AI in the workplace than employees, who believe AI will have a negative effect on their jobs and cause them to be eliminated. Among executives, more than 60% characterize AI as exciting, compared to 40% among the rank-and-file who feel the same. At least 46% of employees are also more likely to say that AI is scary, compared to just 30% of business leaders.
The most common ways that employees say AI technology can have a positive impact in the workplace are related to productivity, including the automation of routine tasks and the ability to do faster and more advanced data analysis. Conversely, the biggest concerns among workers about AI are the loss of the human element to work and the loss of critical thinking skills.
The ultimate negative impact of AI on employees is the replacement of jobs. More than two-thirds of workers believe that some jobs are at risk because of AI, and 23% believe their own jobs are at risk.
As AI increasingly becomes part of the cultural landscape, companies are racing to understand how to incorporate the technology, the report says. Even so, nearly 60% of employees say their company either lacks a policy on using AI or that they are not aware of such a policy, leaving them on edge.
Benjamin Granger, chief workplace psychologist at Qualtrics, says the excitement among executives about AI is not surprising given the technology’s promise of more efficiency, but adds that employees have well-founded reasons to be concerned. “Organizational leaders would be wise to remember that at their roots, organizations are simply groups of people, and the bigger promise of AI is to help people be happier, healthier, and more productive at work—outcomes that benefit everyone.”
Coveo: Gen Z Has More Difficulty Finding Relevant Info at Workplace
The new Workplace Relevance Report from Coveo, the Canadian provider of an AI-powered search engine, shows that Gen Z and similar young digital natives struggle to find information considered relevant or critical to the work they perform, causing them to feel less confident about the quality of their work or about sharing the information externally.
Such struggles put companies at risk of losing innovative talent for management and leadership in the future, the report adds.
“Your workforce is the lifeblood of your business,” says Cynthia Connors, general manager of the Coveo platform. “But not all of your employees have the same needs, or are facing the same frustrations. For example, our survey showed that the cohort of employees just starting their careers devoted more time searching for information than their peers with longer tenure.”
In a survey of 4,000 US and UK workers across generations who work with computers, the results show that 76% of Gen Z struggle more than, say, Baby Boomers to find information than their co-workers. Moreover, Millennials and Gen Z had the strongest reaction to finding inadequate content, which makes them feel burnt out or less qualified to do their work.
A solution, Coveo officials say, is to deploy AI, which can proactively provide content and information that is personalized and relevant to employees, reducing or even eliminating the need to search and improving the search experience for users.
Author Information
Alex is responsible for writing about trends and changes that are impacting the customer experience market. He had served as Principal Editor at Village Intelligence, a Los Angeles-based consultancy on technology impacting healthcare and healthcare-related industries. Alex was also Associate Director for Content Management at Omdia and Informa Tech, where he produced white papers, executive summaries, market insights, blogs, and other key content assets. His areas of coverage spanned the sectors grouped under the technology vertical, including semiconductors, smart technologies, enterprise & IT, media, displays, mobile, power, healthcare, China research, industrial and IoT, automotive, and transformative technologies.
At IHS Markit, he was Managing Editor of the company’s flagship IHS Quarterly, covering aerospace & defense, economics & country risk, chemicals, oil & gas, and other IHS verticals. He was Principal Editor of analyst output at iSuppli Corp. and Managing Editor of Market Watch, a fortnightly newsletter highlighting significant analyst report findings for pitching to the media. He started his career in writing as an Editor-Reporter for The Associated Press.
