Accelerated by the pandemic, digitalisation allows banks to transform customer experience and use new technologies to ensure all needs are met.

Banks embrace digitalisation to improve customer experience in the pandemic.

The Covid-19 pandemic has transformed the way banks are looking at customer experience. (Credit: Ken Stocker/Shutterstock)

The coronavirus pandemic has brought financial and mental health hardships for millions of people, who now need banks to step up and help. The challenge is to provide a seamless and consistent experience as customers migrate to the digital channel.

Jim Banks speaks to Janet Chapman of Nationwide Building Society and Kat Robinson, director of customer experience at Metro Bank, about how new technologies and process adaptation are helping them serve customers during the pandemic.

Banks are no strangers to market disruption. It can take the form of sudden unforeseen events, such as the global financial crisis of 2008, or it can happen because of unstoppable forces like the advance of technological capability.

Today, with the Covid-19 pandemic still gripping the world, both the sudden impact of the virus and the inexorable push towards digitalisation are forcing banks to re-evaluate the customer experience (CX) they deliver.

The pandemic is fundamentally – and likely permanently – changing customers’ attitudes to digital banking. Some have been forced to use online banking for the first time, due to restrictions on movement and social distancing requirements. For older generations, of course, the need to self-isolate has often made it impossible to visit their local bank branch.

As more customer interactions move to the digital channel, banks have had to ensure that their brand values are reflected online, just as they are in the branch. Whether it is a new entrant to the market, or an established presence on the high street, CX is, increasingly, how a bank can differentiate itself from its competitors.

Nationwide Building Society is the world’s largest building society and one of the few remaining mutuals. Owned by its members, as it calls its customers, it has built a track record of innovation since it opened 130 years ago.

For instance, it launched the first interest-paying current account in the 1980s and is currently building a digital innovation centre in London to train its workforce.

The Covid curveball

In 2010, Nationwide began a journey to transform its CX, and since then it has become one of the UK’s best service brands, according to KPMG’s 2018 Customer Experience Excellence survey. “Customer experience has always been at the heart of what we do as a building society,” says Janet Chapman, director and mission leader for Moments that Matter at Nationwide.

“As a mutual, our original purpose was to help people build and then buy their own home. So, our members own the society and they need a caring and responsible service from us. We need to respond to the way people want to interact with us, and we have always done that quickly, including members’ needs for more channels.”

The pandemic has served as a catalyst for Nationwide and its competitors, as customers have suddenly and dramatically changed their banking behaviour since March 2020. Priority one was to ensure business continuity.

In practice, that meant guaranteeing that systems and processes were in place to handle remote banking transactions. With customers stuck at home, and less traffic coming to branches, this meant facilitating the shift to digital channels, while still delivering a reliable and comforting customer experience.

“It is a challenge to provide services during a pandemic, but Covid has certainly accelerated the existing changes that were happening in terms of how people want to access them,” Chapman explains. “We had to adapt quickly to serve our members.”

Branches are a key element in Nationwide’s business model, and have largely remained open –though of course serving fewer customers. Indeed, they were a key focus of the five-year, £1.3bn programme of technology investment the bank announced back in 2018.

Among other things, the programme contained a commitment to maintain Nationwide’s branch network, which will receive £350m of investment over the same five-year period to deliver more open-plan spaces, new technology like iPads, free Wi-Fi– as well as a video link service to connect customers to teams of personal banking managers and specialist consultants.

The idea is that customers can manage their finances in a branch, via the mobile app, by telephone, online or by post – with consistent service regardless of channel.

“We have kept branches open but only for essential services, which has accelerated the move towards mobile,” Chapman explains. “We are also encouraging members to access in-branch services through ATMs. It is all about having the flexibility to adapt to rapidly changing circumstances. So much has happened in the last year and it has accelerated change around different channels.”

Since the start of the pandemic, in fact, Nationwide has seen 600,000 new registrations to its mobile services. Meanwhile, staff in branches have been redeployed where possible, with some taking calls from members in support of call the bank’s call centres.

The new and the old

If Nationwide is a stalwart of the UK’s financial services sector, the new kid on the block is Metro Bank. It was established as the UK’s first challenger bank in a century and in July 2020, as the pandemic raged, marked its ten-year anniversary.

From the outset, Metro Bank’s business proposition has been built on customer service, both in-branch and online, and it has invested heavily in its network of branches or, as it calls them, stores. These stores are intended to be focal points for the local community, so Covid-related restrictions have presented a major challenge to that model.

“It is all about creating fans,” explains Kat Robinson, Metro Bank’s director of customer experience. “The customer runs like a thread throughout our whole business model. Our stores are important to us, and all of them have stayed open during the pandemic, but now the multi-channel offering is just as important.”

Metro Bank saw an 8% rise in digital or mobile interactions in the first half of 2020, and phone calls to the bank are up by 27% since the start of the pandemic.

“The challenge is to try to support customers in the ways they want to bank with us,” adds Robinson. “There are fewer customers coming into the stores, so more is done by phone or by logging into the mobile app, some of them for the first time. So, they need some hand holding with self-service.”

Overall, both organisations have worked hard to ensure that the personal element in service is maintained in a multichannel environment. “One-to-one interactions in the branch are more limited now, so keeping the human element across all channels is important,” remarks Chapman of Nationwide’s efforts.

“CX is about really looking at the end-to-end journey from our members’ perspective and understanding what it feels like.

For digital channels, it is about giving members the feeling that their experience has the characteristics of Nationwide – empathy, efficiency, effectiveness and the sense that they are being cared for.”

Even so, it’s important to emphasise that neither bank is moving away from physical channels. Rather, they’re focusing on getting the basics of in-person service right – then replicating it online.

“Customers are increasingly comfortable with doing some things digitally, so we may see their behaviour change in the post-Covid world,” Robinson believes. “Some things have shifted towards digital channels, where some customers will stay, but there is an important role for our colleagues to play in that digital transition – when they use webchat or call they can speak to a person, not just a chatbot.”

Computing power alone is not enough

Covid did more than drive more traffic to digital channels. It also forced banks to look closely at how customers want to interact with them during the pandemic, and to look ahead at whether those choices will be permanent once lockdown restrictions are eased. For her part, Robinson emphasises that many customers want to interact with people, not just systems.

“People and processes are more of a focus for us than technology,” she says. “It is more about bringing people together than implementing a clever chatbot. Our challenge now is to bring the brand to life more in the digital channel. The customer journey must be suitable for each customer – quick for some and hyper-personalised for others. We have to adapt to a diverse customer base.”

At Nationwide, technology’s role is not only to facilitate the transition to digital channels, but also to monitor and measure the quality of customer experience. The institution has, for example, deployed artificial intelligence (AI) to analyse customer interactions and solve members’ problems faster.

Working with analytics specialist SAS, Nationwide has also used AI and natural language processing to identify inefficiencies in customer interactions. One key finding being that over 50% of all email enquiries can be resolved by guiding members towards digital channels.

It has also implemented KPMG Nunwood’s ‘Fizz: Voice of the Customer’ software, which captures customer feedback and couples it with operational data to provide insights into potential blockages in the customer journey.

The result of its CX investment has resulted in an increase of Nationwide’s market share – it now has 10% of the UK’s current accounts, as well as 15% growth in 2020 in the number of committed members (those who have at least two products with the building society).

Nationwide’s success can also be measured by how quickly it can now help customers. At the start of the pandemic, many members needed payment holidays on loans and mortgages as their income fell. Nationwide processed 250,000 in a few weeks, relying heavily on automation and the use of AI.

In terms of CX, meanwhile, AI is being used predominantly for analytics to improve the efficiency of service, rather than in customer-facing applications. “We are starting to explore the deployment of AI in customer experience, but we want to do it thoughtfully,” says Chapman. “It is important for our members to interact with humans.”

“The last year has been a period of forced experimentation and adaptation that will have a lasting impact,” she adds. “So much has changed in the context of the pandemic that expectations of service and customer experience are very different.”

Metro Bank is focusing on successfully replicating the basics of its in-branch experience in the digital channels and is waiting to see whether customer behaviour is permanently changed by the pandemic.

“Some aspects of technology have been accelerated because of Covid,” says Robinson, “such as virtual meetings and the use of digital channels, but not all of it will stick. Post-Covid, we need to listen more closely to our customers to see whether they want richer digital services or whether they want to return to our branches.”

For that reason, AI is less of a focus for investment than it is for Nationwide, but when it comes to CX, both long-established institutions and newer challenger banks face similar challenges and are responding with similar tactics. Technology plays a key role, certainly, but consistency of service and brand identity across all channels is also based firmly on person-to-person interaction.

This article originally appeared in Future Banking summer 2021.