In this short series of blogs I’m exploring how the behaviour of UK financial services customers has changed amid the pandemic. In the first two posts, I drew on the UK findings of our Banking Consumer Study: Making digital more human to examine how COVID-19 has affected the shift to digital banking services across different customer segments.

The study confirms that customers are making greater use of digital channels, a change that could potentially weaken their personal connection with their banks. In this final blog, I’ll look at how banks are combatting that risk by focusing on empathy. To do this, I’ll draw on our new Banking on Empathy research, which involved 125 senior banking executives from across the globe.

The need for empathy

With consumers’ financial and personal distress likely to remain high throughout 2021, the study is well-timed. As the government tapers off the financial relief measures introduced during the pandemic, more customers will need banks to understand and empathise with their financial circumstances.

Yet the traditional ways of helping financially distressed customers are hard to scale. Digital channels can serve large numbers of customers efficiently but carry the risk of commoditisation. Furthermore, most are unable to provide the human touch and personalised advice which many customers appreciate in their hour of need.

So, as banks look to tailor their services, they shouldn’t segment customers based on their economic profile alone. Customers’ emotional profile must also be part of the equation. Yet our Banking on Empathy research shows that just three in 10 banks are very confident that they can sense customers’ emotional outlook about their financial situation without asking them directly.

A vision for the future

How can we close this gap? In the study, we identified a group of Empathetic Banking Leaders who are overcoming these challenges and outperforming their peers financially. They can anticipate customers’ needs without asking. And rather than forcing customers into a particular channel, they let them choose how they interact based on their emotional state and financial need.

The Empathetic Banking Leaders offer a powerful vision of how banks can deliver a human touch in a digital world. We’ve pinpointed four key steps that can help others follow in their footsteps.

Firstly, banks should anticipate the customer’s intent at the zero moment of truth. In other words, at the point when customers are researching the services, products and advice they need to navigate a financial crisis or opportunity, banks should reach out proactively with empathetic actions. To do this, they must develop a more holistic view of how customers are feeling in real time, pinpoint the moments that matter, and capture data that measures and monitors customer experiences. Is your bank already doing this? If so, how do customers rate the personalised experiences?

The second imperative is to make empathy part of the digital skillset. This means tapping into technologies such as voice recognition, speech analytics and text analytics to detect customer sentiment – just as a skilled human agent would. Empathetic Banking Leaders are twice as likely as Laggards to already be using these technologies to enable empathetic interactions at scale. Is your organisation following suit?

Third, banks should transform their contact centres into customer care hubs. Contact centres are easier to scale than branches, but banks must reduce call hold times and add a personalised touch to each customer conversation.

Leaders stand out here, too. In fact, 93% of Empathetic Banking Leaders (vs only 23% of Laggards) regard human chat as an efficient option for solving customers’ problems. That’s why leaders are making human chat the primary way that customers interact with their contact centres. In addition, they are augmenting contact centres with digital capabilities, to provide empathetic experiences without physical face-to-face interaction. For example, they are using AI virtual agents to help advisors access information and resolve customer enquiries faster.

Last but not least, banks should reinvent their branches as experience centres. For most banks, the branch of the future will be far from the most important distribution channel. However, the few customer interactions that take place here will be those that matter most to customers’ experience and perception of their bank. This is a huge shift. In fact, 97% of banks agree that their branches will need to be redesigned in the next one to two years to meet new demands.

Empathetic Banking Leaders foresee the need to operate a mix of large and small branches to serve different purposes. For instance, branches in strategic locations might become experience centres that offer inviting spaces for customer engagement – including coffee areas to spark conversations that wouldn’t take place in a more formal setting. Meanwhile, others could become networking and training hubs for the local small business community, or personal finance education centres in areas where fewer people have bank accounts.

Stepping into action

Pivoting towards empathetic banking requires a profound rethink of how to blend human and digital capabilities. Here are some questions to help you get started:

  • The majority of banks in our survey (63%) consider the branch to be the most effective channel for sorting out problems for customers under financial pressure. Is this the case for your institution, too? How has this impacted your cost to serve? Do your customers think branch-based services are the best fit for their needs right now? How many would be willing to seek advice remotely rather than face-to-face?
  • Where does your contact centre fit into this picture? Are your agents well-equipped to help customers in financial distress? Are you exploring how video chat or text chat can streamline interactions between customers and agents?
  • How are you using digital channels to support financially distressed customers? What are the barriers to doing so? Can you offer personalised, empathetic services to distressed customers via your existing digital channels?

Throughout this short series of blogs, one theme has been front and centre: the need for banking services to feel human, irrespective of how they’re delivered. Embedding empathy can help turn that humanity into reality. And customers will appreciate the difference.

For further insights read the our Banking on Empathy report:
Read report