The Importance of Customer Voice in the Banking, Financial Services, and Insurance (BFSI) Sector

Published by Cubic Author

Posted on 25/07/2024

Introduction to the BFSI Sector

In the present worldwide aggressive business, the fight for retaining consumers is fierce among the active entrants as well as the contemporary competitors. Companies, particularly those in the BFSI sector, are going out of their way to make sure that they maintain and continue their track record on client line and commitment. Monetary services customer areas are broadly classified into 2 main categories – persons and businesses. Organizations are persistently climbing to enhance client satisfaction and deliver an enhanced experience to their patrons, and technology has played an important role in their growth in client service. Segmenting technology has constructed a strong convergence in the customer practice by improving the back-end functionalities in the functions of the business.

The banking, financial services, and insurance (BFSI) sector is the core of a country’s economic system. The BFSI sector plays a vital role in the progress and growth of a country by providing necessary financial instruments and investment services to the savers and borrowers. The industry has been subject to disruptive technological innovation in the area of client service, and its aim has changed from execution supposed manually to delivering digital ease in order to perceive and meet the increasing prospect of digitally conversant customers. The BFSI sector and associated businesses are dealing with ‘smart’ consumers who are digitally connected to others across the globe. As patrons and customers of the BFSI industry establish themselves towards digital channels for money manipulation and transactions, organizations in this sector require to increase their service location to diverge their wants.

Understanding Customer Voice in BFSI

Banks’ core business propositions are really rather vital to life as we know it. As Peter Cook famously said of commercial television, “it’s rather like oxygen (or bank cash machines) – people don’t notice them until they stop”. It’s about bringing together a very good story (in other words an accurate and truthful representation of the customer voice) with somebody who really wants to hear it. Who are these people? They’re the people providing the service. This really is a win-win opportunity, because currently, surprisingly few bank employees meet, listen, and talk to customers (given a typical ratio of customers to branch employees, a customer will visit the bank just once a year, at most, to transact, while of banks that are serious about customer service, customer-facing employees will only meet or talk to around 30-35% of their customers). But imagine the effect of really engaging with customers. Banks have customers – not staff – visiting branches up to 100 times more often, and holding thousands of conversations with them, it’s to the bank’s credit that they can unveil the very powerful and positive hidden voice of their customers to their colleagues, and in doing so, reinvigorate the tired cliche of ‘customer service’.

When BFSI companies talk about the customer voice, they are usually referring to the ‘customer needs’, which from a purely product-centric analyst and R&D perspective, are not hard to understand. Banks, and to a lesser extent financial service providers and insurance companies, have traditionally been very adept at understanding their customers, and knowing about their needs, what are acceptable service levels, and recognizing the huge societal value inherent in the smooth operation of a national, and indeed, cross-border, payments’ system. However, when these companies talk about ‘customer intelligence’ – something that in recent years has been acquired primarily for the purposes of customer retention or service optimization activities, the realization that ‘needs’ are not synonymous with ‘voice’ has to be confronted. The main point here is that customers, being real people, have voices, and can talk to their suppliers. More directly – and even more simply – they can talk in a way that can be heard, and to which responses can be made.

Benefits of Listening to Customer Voice

In the pursuit of navigating in the new digital economy, everyone is pushing for digital transformation. To be truly digital organizations, it’s not only the architecture that will need recalibrating, attitudes and how we treat different stakeholders also need to be re-looked. Given the competitive pressures, pursuing digital for the heck of it isn’t attractive. The quest for digital leadership, customer-centricity, and interference-free services has to be high on the agenda. Engaging with the customer and leveraging their voice is one way to shed some light down the dark tunnels. Listening to the voice of the customer is important and complacency is not acceptable. Despite positive strides by banks and startups, many of the digital-only pioneers are displaying high customer veto rates and many have struggled to break even. Given the explosion of fintech, it is important for organizations to stay connected with consumer needs, wants, behaviors, and sentiments. Big data, automation, artificial intelligence, and the likes will help narrow the gap between digital and brick-and-mortar businesses. They will not overtake the importance of engaging the customers. Voice of Customer (VOC) and experience feedbacks are tools that organizations cannot ignore. To accomplish these, there is a need for organizations to harness inwardly, thinking about the wider ecosystem and embracing multiple collaboration models.

In this digital age, stresses are occurring across all sectors, including the banking, financial services, and insurance (BFSI) sector. Rapid technology advancement and consumer behavior shift are together creating a perfect storm for existing players to either innovate or face potential disintermediation. Never has the BFSI sector been at such a critical juncture. As the heartbeat of the economy, any disruption could have catastrophic ripple effects across different sectors and globally. Traditional organizations are struggling with their legacy infrastructure and are perceived to be slow, expensive, inflexible, and out-of-date. Moreover, with consumers demanding a more ethical, customized, and socially responsible approach from all industries, the pressure to change is increasing.

Implementing Customer Feedback Mechanisms

Deploying feedback analysis for banks, however, requires special care to avoid customer experience initiatives from being caught in the ‘one-size-fits-all’ approach. By addressing that care, we find that customer feedback can provide the matchless inspiration that banks and insurance companies need. The following best practices, cautionary notes, and other advice are taken from actual programs we implemented for leading financial institutions around the world.

By 2020, customer experience will overtake price and product as the key differentiator across the BFSI sector. To create a compelling experience, organizations must consistently deliver on their brand promise, as the potential cost of losing customers is high. At the same time, new ‘neo banks’ and other third-party financial technology have emerged as strong alternatives for a large share of traditional customers. In this environment, customer feedback and customer experience can provide a serious advantage to financial service brands by putting their customers at the heart of their actions.