By Chartered Banker Institute

Banks can no longer ignore the social media noise that typifies the matter-of-fact way new generations of customers communicate with brands. Younger audiences especially have increasingly more spending ability that has supercharged both their activity and interactions with banks online.

“As Generation Z comes into working age, we are seeing the first fully digitally native group emerge as critics of the brands they buy from. They resort to online first when they need to speak to someone,” explains Juliette Aiken, Chief Marketing Officer, Dotdigital.

Helping brands engage online is an area of expertise for Dotdigital, a cross-channel marketing automation platform that enables marketers to connect with their customers. “As it becomes easier and more natural for customers to complain online, the banking and financial services (FS) sector must be ready to respond,” she continues.

This begs the question: why have complaints become so prevalent over recent years? “Borrowing is not new, but historically people took out loans only for bigger purchases. However, today consumers’ credit-card usage is commonplace, and buy-now-pay-later [BNPL] schemes have normalised lending on a greater scale,” she says.

Aiken believes this new lending pattern, coinciding with the advent of digital, has likely increased the number of complaints. The growing frequency of transactions continues to generate more customer experiences (CXs), too – some good, others bad. “There are the usual grumbles around financial services, such as fees, charges and security concerns, but the core of the issue is CX,” explains Rebecca Stephens, Research Director, Customer Experience, IPSOS.

“When digital functionality doesn’t work as expected, customers have to revert back to the call centre, which can’t always offer a solution to a digital issue. They may face long response times, which fall short of their expectations,” she says. “While some issues may not be serious, there’s always a persistent anxiety that surrounds financial matters – a reason why customers may want their problems dealt with quickly.”

In less than two decades, consumers have switched from complaining privately to complaining publicly and en masse. “Today, customers have fewer alternatives to raising their issues online. Before, you could complain over the counter, receive a human response and move on,” explains Ian Davis, Insight Director, Customer Experience, IPSOS. “However, with fewer branches available, and younger digital natives intuitively spending their time online, where else other than Facebook and TikTok can customers voice their concerns?”

“Most of us are happy to carry out tasks and transactions ourselves digitally if it’s easy and straightforward enough – but when the computer says ‘no’, our patience quickly runs out. The frustration expressed by a customer online, whose banking app isn’t responding or who can’t contact a real person, may be a cry for help,” continues Davis.

Moreover, Stephens underscores the importance of ensuring there is human backup available when needed. “There’s nothing more frustrating than trying to explain a complex issue to a bot and receiving automated responses that don’t help.”

Why Legacy Banks Face an Uphill Struggle

“Digital-native banks are successful at adapting to users’ conversational needs partly because their tech stack and internal processes are much more agile than those of their legal counterparts. Traditional banks may be more limited by what they can say, and there might be more risk if they get it wrong. As such, traditional banks have relied on templatised conversations that are now out of tune with current audiences,” explains Aiken.

“Time is another factor,” she continues. “Traditional banks may be slower to respond when consumers are increasingly expecting fast and personal responses that deal with their issues quickly.”

Part of the issue is the slow and reluctant adoption of new, popular channels. “Banks need a mentality shift, and that starts with investing in the right technology,” argues Aiken.

“Indeed, many consumers assume someone will be monitoring complaints and act quickly to respond – especially when they see other brands on social media addressing customer issues almost instantly,” explains Davis.

Stephens also underlines the common frustration of having to repeat information previously provided. “Customers shouldn’t have to be repeating themselves every time they start using a different channel,” she says.

According to The Guardian, 6,000 bank branches have closed over the past nine years. For Aiken, there seems to be a mismatch. “The absence of physical banks on the high street hasn’t necessarily translated to more of a presence online. It doesn’t appear that that resource has been reinvested into online channels,” she says.

Although traditional banks hold vast amounts of customer data, their outdated legacy systems may not be designed to handle such a complex volume of information. “While there’s an expectation that banks and other providers should be acting smarter with the insights they have, consumers should be aware of the enormity of the challenge banks face and appreciate that fast, seamless interactions may not always be a reality,” explains Stephens.

In the data arena, fintechs have the upper hand. “Disruptor banks have newer, agile systems that drive the value of data exchange between businesses and customers, resetting the expectations around CX. Traditional banks must think about what longer-term strategic actions they must take to address problems, fixing pain points to begin with so customers have less to complain about,” she concludes.

Empowering Those at the Sharp End

Dealing with complaints can be a delicate process that requires empathy, communication and resolution. “It’s probably good practice for any industry, but particularly for banking, to ensure that responses aren’t filled with industry jargon or terminology that consumers won’t understand. Keeping it simple is key, otherwise it may feel dismissive,” advises Aiken.

While receiving a generic response may be frustrating, it may be difficult for banks to engage simply with customers on social media due to the sensitivity around the complaint. In this instance, standard prompts may be required to take the issue offline and avoid any risk.

“Customers may raise issues that are genuinely important to them on social, but replying directly in a public forum might not be prudent and could breach confidentiality,” argues IPSOS’ Davis.

“The problem for banks is that users will see only complaints and not resolutions,” he adds.

Aiken believes that, with the right training, teams across the bank can transform negative complaints into positive outcomes. “Can traditional banks empower social teams, content creators or even customer service agents? Can they be better educated and enabled within a changing regulatory landscape so that they can better respond authentically while remaining compliant within the framework they’ve been given?” asks Aiken.

Davis agrees that enriching the culture of the bank is key. “People must always be empowered to think about how they can continually improve CX.”

Today many brands champion proactivity in customer service, however banks are still somewhat reactive. “Expectation-setting can often help remove that frustration while customers wait for a resolution,” says Aiken. “It’s important to provide clear SLAs [service level agreements] on response times – because you don’t want exasperated customers waiting on the line for however long.”

One way to proactively deal with complaints is to reduce the volume of existing common frustrations. “At Dotdigital we routinely monitor frequently asked questions or concerns coming through social. Banks can be more proactive by better surfacing that information without a customer having to take time out of their day to speak to someone,” explains Aiken.

Improving CX comes down to viewing the journey as holistic. “Banks should think about how they can improve the user experience across channels and manage down the points of failure that cause complaints because they are extremely difficult to counter,” says Davis. “For example, banks could provide simple calls to action for feedback across their digital properties, which – compared with lengthy surveys – would require minimal commitment from users.”

Stephens agrees that implementing comprehensive, connected CX programmes could help abate complaints. “At IPSOS, we talk to our clients about closing the loop. That means reviewing feedback to set in motion actions to address individual problems. This kind of intervention means that banks could pre-empt a potential issue before it becomes a just cause for raising a complaint.”

In the long term, identifying commonalities across all issues can help streamline CX. “Once banks have mapped out the customer journey systematically, and identified points of stress or failure, they can put improvement plans in place to stop problems from reoccurring,” says Davis.

Pillars of Social Media Strategy: Resource and Response

Dedicated facilities within banks are needed to engage with customers on their terms. “Banks need committed teams whose job it is to look at social media and deal with customer complaints. They should think about where customers are going to be. Is it X, Facebook or TikTok?” Davis asks.

Aiken agrees that enablement is required to future-proof practices. “Banks must to give their teams the tools they need to make customer-first decisions that abide by compliance – especially for international banks dealing with multiple governing bodies,” explains Aiken.

“Technology is a bank’s best friend. It can help identify what the important issues are, enabling teams to follow up and provide resolutions,” explains Stephens.

“There’s plenty of technology available to help marketing teams stay on top of their social media presence. Appraising tools from a usability standpoint can also help marketers tap into technology in a smarter way, helping them deliver better, faster experiences at scale.

“From an immediacy perspective, live chat is a tool many banks are utilising – and with success, because it gives people that speed of response.”

For FS providers, apps already provide a huge opportunity for positive engagement. “Realistically, there is only a handful of apps you use on a regular basis and that are visible on your home screen, your banking app included. So, banks could consider in-app messaging, as long as it’s helpful and accurate, and used carefully and sparingly. Customers won’t want to be overloaded with what feels like promotional messages,” emphasises Aiken.

Davis concurs that banks should avoid ‘salesy’ language. Overstepping the mark in such a private environment could appear invasive. “Customers may not appreciate seeing bestselling product recommendations in their banking app,” he claims.

That being said, banks may be able to leverage customers’ emotional attachment to brands. “Softer marketing that celebrates key milestones can help deepen that relationship with the brand and make customers more forgiving,” explains Stephens.

In an increasingly digital world where anonymous interactions with brands have become the norm, adding a human touch can make all the difference to CX.

“Curating an authentic tone of voice and content guidelines that are compliant, without forcing people to be overly formulated in their responses to complaints, can also add personability to customer conversations,” highlights Aiken.

Monitor the Red Flags

Aiken believes that a robust social media strategy is about putting the customer at the centre. “Social listening and sentiment analysis are not new, but perhaps underutilised by banks. There are many tools now that can measure what proportion of engagements are positive, neutral and negative,” she says.

Davis concurs that by employing a systematic approach to analysis, banks can better identify where the issues are. “Technology can search for trigger words or particular sentiments that are valuable for social media teams,” he says.

Putting actions in place to improve CX, and then tracking interactions to see if there has been an uptick in positive reviews, can also be a good measure of success. “Analysing the language that people are using can provide a more qualitative assessment of how banks are perceived by their customers,” suggests Aiken.

Davis asserts: “There are still brands that only measure satisfaction within a number range, benchmarked against a target. However, banks should be taking every opportunity to close the loop with the customer – have people on standby for any alerts while monitoring potential red flags in the quality of customer service.”

With generative AI, there is more opportunity to use language processing modules to extract the most valuable feedback. “This is not just identifying whether this comment is good or bad, but what it means and how to act on it,” explains Davis.

“At IPSOS, we advocate the double-closed loop – contacting the customer personally, wherever they may be, to find out if the resolution is satisfactory,” he adds.

Aiken concludes: “When all is said and done, banking doesn’t have to be a faceless industry.”

This article previously appeared in Issue 2 2024 of Chartered Banker, UK.