Insights U.S. Financial Institutions could gain from UK Banking Customer Interactions
In the world of banking, the customer experience (CX) has become a crucial factor in determining loyalty and success. Two studies by Medallia Market Research have highlighted that 69% of consumers feel more loyal towards financial institutions when employees are treated well, indicating the significant impact that managing employee experiences can have on customer loyalty.
One sector that is actively embracing this concept is the U.K.'s building societies. These not-for-profit cooperatives, owned by members, use their profits to offer benefits like lower fees, incentive rates, or profit-sharing. Building societies, such as Nationwide, are deeply embedded in their communities, with members having a say in decision-making. This democratic approach to banking resonates with customers, contributing to their loyalty.
Nationwide, the world's largest building society with 16 million members across the United Kingdom, prioritizes fairness, transparency, and ethical banking. This focus is driven in part by the Financial Conduct Authority's (FCA) Consumer Duty, which emphasizes putting customers at the heart of business decisions. As a result, Nationwide secured the third spot in the U.K. Customer Satisfaction Index (UKCSI)'s list of the top 10 companies in the country with the highest overall customer satisfaction scores.
The voice of the customer should guide design processes and business decisions in financial institutions. This is a practice that Nationwide has embraced, earning recognition for its customer experience program and digital transformation initiatives. The society also strives to increase accessibility for customers with mental health conditions.
Designing inclusive experiences across products and channels is an important best practice for CX improvement. Building societies, including Nationwide, are combining digital and human-powered channels. Physical branches are being reimagined as community hubs, offering in-person support, private meeting spaces for financial-wellness planning, and a sense of community.
On the other side of the Atlantic, U.S. banks are also recognising the importance of CX. They are fostering engagement and ownership by actively gathering and acting on feedback via surveys, digital behaviour, and customer conversations across channels. Leading U.S. banks have shifted their customer experience priorities towards highly personalized digital services and customer-centric strategies. They leverage data analytics and AI for hyperpersonalization to build stronger, multi-product customer relationships and improve loyalty.
However, the path to improved CX varies. While some U.S. banks are rethinking branch expansion to targeted regions, others are closing physical branches in favour of digital-only experiences. Brands across industries are investing in CX, raising the standard for financial institutions.
One successful U.K. best practice for CX improvement is the Active Manager model. This model transforms managers into mentors and coaches who empower frontline employees and strengthen their active listening skills. This approach has proven effective in enhancing customer interactions and fostering loyalty.
In conclusion, the importance of CX in banking cannot be overstated. Whether it's through implementing product lifecycle management practices with a focus on inclusivity, prioritizing fairness and transparency, or leveraging technology for personalized services, financial institutions are recognising the need to put their customers at the heart of their operations.
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