Instilling customer confidence in the pandemic era

Since the infamous market crash in 2008, the financial services industry has struggled to shake off negative public perception. Now, as the world is shaken by the COVID-19 pandemic, banks and financial institutions have mostly been quick to pivot, flexible in extending support to their customers.

Yet, despite their efforts to change public perception, customers still believe that the industry is mostly focused on short-term profits over long-term strategy and relationships. This is evident in the Edelman Trust Barometer 2021, which revealed that customer trust in the sector dropped by 10 points.

One of the most significant shifts since the pandemic began is the change in customer expectations, behaviours and demands. Movement restrictions gave people time to reassess their priorities as well as life choices, and forced them to identify what they hold dear to their hearts. This has brought personal finance to the top of their agenda, as customers reassess their financial wellness. This is clear in research recently conducted by OpenText, which revealed that for more than 7 in 10 Singaporean consumers, a personalised digital experience is vital if they are to stay loyal to a brand, while almost two-thirds (63%) say they would be put off buying again from a brand due to a bad experience.

As a result, banks need to ensure that they deliver the correct experience to customers. They need to supply every individual with a custom journey that encompasses everything from the communications channel used to proactive financial advice and information about the business.

While banks often use trust as a key differentiator, confidence will now have to take centre stage to move the loyalty needle. As defined by the Cambridge Dictionary, confidence is “having trust in people, plans, or the future”. For banks, it is having their customers believe that they will deliver the experiences they want and need, in the hope that they will choose their services moving forward. If banks and financial services firms are to maintain customer loyalty, rebuilding customer confidence will have to be their top priority in the coming years.

To achieve this, they must reimagine their business strategy and organisational culture. Building their business in a way that puts customers first and products second will help them build confidence and make them the institution of choice, ahead of their competitors.

What’s important in the customer journey?

Building customer confidence requires financial firms to have a clear understanding of what their customers want and need from their bank. This demands that banks move away from the traditional transactional business models that focus on delivering products and services, and instead, base their engagement models on an intelligent and proactive understanding of each customer.

The engagement model should provide customers with tailored and personal experiences that are consistent throughout their journey. Whether people choose to engage with the firm through a banking app, desktop, a phone call, or visiting their local branch, their experience should be consistent and contextually based on the relationship the bank has with them, as well as the behaviours of that individual customer over time.

Why is cyber resilience important?

The other part of building customer confidence is demonstrating how serious the firm takes cybersecurity and operational resilience. In the past couple of years, we have seen cyberattacks and outages become commonplace. In a recent spate of phishing scams, one of Singapore’s leading banks suffered a serious cyberattack that affected hundreds of customers and resulted in a total monetary loss of SG$13.7 million.

Indeed, as banks become more digital and technologically advanced, customer expectations are also expected to rise along with growing concerns from customers – that they may not be able to access the services they need to manage their daily lives. One such case came in November 2021, when one of the major financial institutions in Singapore faced one of its worst digital disruptions in a decade that left customers unable to access their accounts or make payments after digital banking services went offline for up to two days.

The increased uptake of digital technologies, spurred on by the pandemic, has also increased customer concern about their personal data. Customers want reassurance from firms on how they handle personal data, how it’s used, stored, if they share it with external parties, and the security measures financial institutions take to minimise risk.

While remote working has supported business continuity, it has also increased the risk of data leaks, as employees can be working with sensitive customer data on unsecure home networks. This can also expose organisations and customers to fraudulent activities and cyberattacks.

Additionally, the increasing use of open banking means that our banking services are interconnected with external partners through APIs. Even though this is an excellent development for customers and helps banks expand their service portfolios, it also leaves them vulnerable. Furthermore, while banks might be well protected internally, their partners and vendors might not have the same level of security. This could open a “back door” to the bank’s system – the so-called supply chain attack.

How can data and technology help rebuild confidence?

Preventing cyberattacks and providing a hyper-personalised experience for customers requires financial organisations to have access to the right data and technology. If banks are to understand their customers better, and ensure that products and services are super relevant and timely, they need access to the right data at the right time. Yet, getting this level of access to personal data requires permission from customers. As reported by EY, customers are only willing to share personal data with their banks as long as they can see the benefit from this exchange.

Ultimately, if financial services are to be granted access to customers’ personal data, they must demonstrate the best use of data by continuously providing meaningful experiences and ensuring it doesn’t come at the cost of data privacy and security.

However, delivering the right customer experience doesn’t end when banks gain access to personal data. They must use a digital experience platform to design targeted digital strategies that leverage the data more effectively to give users that rich and hyper-personalised experience. A digital experience platform will equip financial services firms with the right tools and applications that serve as the foundation for consistent, omnichannel customer journeys across multiple digital channels.

If banks and financial institutions are to remain competitive, they must put their customers ahead of their short-term revenue goals. Utilising personal data and the right technology can help them build cyber resilience and true customer confidence, which in turn results in secure long-term customer loyalty.