By Stephen Hampshire, Client Manager, TLF Research
Using technology to get closer to customers
It’s hard to avoid coverage of the impact of technology on customer experience. Whether it’s AI, digital channels, or augmented reality, technology is mounting an assault on the traditions of customer service.
Too often this is billed as being in opposition to the human-to-human interactions of traditional customer service: AI will replace agents in the call centre, digital will supplant shops staffed by people, augmented reality will paint a picture more effectively than the most experienced salesperson. That doesn’t have to be the case. Used the right way technology can improve the human connection between a business and its customers.
Nationwide is at the forefront of this movement, shoring up its position at the top of the UKCSI with market-leading innovations in the customer experience. Customer Insight interviewed Tony Prestedge, Chief Relationships & Distribution Officer, to find out more.
Nationwide have 12% of the market for mortgages and savings in the UK and, while traditionally a relatively small player in the current account market, in the six months before I spoke to Prestedge they accounted for one in five new current account openings. That growth is driven by the success of their digital tools, and the potential that digital gives them to grow beyond what their physical branch footprint would allow.
That’s important because, unlike most mutuals, Nationwide goes toe to toe with the banks in offering current accounts as well as mortgages, savings, and investments. In order to take on the banks and be credible in those markets they need a solid digital offering, and they need to make sure it’s well integrated into their overall customer experience.
Balancing the old and the new
Nationwide is used to being a leader in terms of customer satisfaction. It consistently performs well in the UKCSI*, the FRS, and in its own internal surveys. It’s consistently rated number one of the banks and building societies with a major high street presence, but that success brings its own dangers. As Prestedge says, “The big risk is complacency…how do we make sure that being number one doesn’t become the anchor that drags us back rather than the thing which propels us forward.”
In particular, he’s very conscious of the potential for new entrants to disrupt the banking sector, and reset what service might look like. Disruption may come from technology companies offering account aggregation and other non-financial services rather than from new financial suppliers per se. It’s a fast changing market, which has seen customer usage of Nationwide’s mobile offering increase by 700% in two years, but it’s also a world in which customers still value a high street branch presence.
“Customers are happy to adopt the technology, but they want to continue to have a personal relationship, we’re not seeing a movement away from branch.”
There’s a delicate balance to be struck between continuing to meet the needs of customers when they want a face to face branch service, and embracing new technologies fast enough to anticipate the danger of potential disruptors entering the market. The answer is to make sure that technology works not to replace personal service, but to support it.
“We think about service leadership being enabled by technology, made meaningful by people.”
As we’ve seen in many other industries, you can’t just assume that the brave new digital world is populated by a different type of customer. Although 25% of Nationwide’s members now have a mobile relationship as the dominant channel, there’s a reason that “omnichannel” has been such a buzzword—Nationwide see 70% overlap across channels, depending on what customers are doing. It’s not so much the case that there are “digital” customers and “face to face” customers; more that most customers are both depending on whether they want to check a balance or get some financial advice. Customers might check their balance in an app once a day, go online once a week, and visit a branch only once every couple of years, but they need to be able to do all three on their terms.
Customer focus & staff engagement
Despite embracing technology, Nationwide is a business with its values rooted firmly in heritage. It remains a mutual, owned by its members rather than shareholders, and that has a clear impact on the way customers are seen by the organisation and its staff. The focus on members creates a unique culture, in which people are willing to go further in order to serve customers better. Ultimately, Nationwide’s people understand that the organisation’s right to exist is dependent on customers remaining loyal.
“We make a profit, and we’re heavily regulated, but we don’t need to earn quarterly profits. That does create a different culture, and a different feel.”
As well as formal survey work, customers are engaged through online chat panels and monthly talkbacks in branches, making sure that their needs are kept front of mind.
“We spend a huge amount of time with our members, from the boardroom downwards.”
Staff are at the core of Nationwide’s strong performance in customer satisfaction. Processes are necessary in any business, and perhaps particularly in highly regulated financial services markets, but good processes are driven by people. Processes should never get in the way of serving customers, and it’s very easy for that to happen unless they are regularly scrutinized and challenged by the people who have to put them into practice.
“Our people drive the design of our processes.”
Nationwide recently held a “Big Conversation” to gather feedback from all staff about things that get in the way of serving members, and what they would like to change. That kind of bottom-up approach to process design is much more engaging for staff, and much more likely to result in processes that work for staff and customers. The same principle is at work in the half hour section of every weekly “Heartbeat” exec meeting which is dedicated to hearing from frontline staff about how their week has been. It makes sure that processes are designed more bottom-up than top-down, and people have a genuine voice in how they should work or how they should be changed.
Employee engagement, and trust in senior management, is very high. Prestedge is confident that translates to a level of discretionary effort on behalf of customers that you would not see in other businesses.
Why are staff so important to customers? Just like in every business, their ability to respond when things go wrong (as they inevitably will with 15 million customers) is vital. They also have a key role to play to humanise what can be an overwhelming industry with complicated products and, necessarily, lots of specialist language.
“We have complex products, and it’s our people that bring them to life.”
Most of us have probably become used to relying on apps for the majority of our day to day banking needs such as checking balances or making payments. Is it just about making it as easy as possible for customers to self serve? For Nationwide it’s also about putting the organisation in closer touch with its customers.
“The mobile experience is like having a digital branch in your pocket, but at the other end of that there is a person.”
The banking app, for any institution, is now one of customers’ most regularly used apps. Done right, a mobile app can mean that you are continually present with the customer, deepening the relationship. As well as improving the customer experience, that obviously has potential benefits in terms of cross-selling. Nationwide is looking to integrate technologies such as WhatsApp and video chat, as well as tools such as a digital vault for documents, so that they are constantly present with the customer.
Where Nationwide’s investment in technology is really striking, however, is in its innovative in-branch video. They’re working hard on integrating technology into the physical environment. “Nationwide NOW” is a video link service which connects customers in branch, anywhere in the country, to help and advice. I was given a chance to try the technology out, speaking from London to an advisor in Scotland, and I was really impressed both by the quality of the connection, and by how much more human a face to face interaction is than one over the phone.
It’s a really simple, practical, solution to the problem of resourcing branches with advisors to cope with varying demand; and it’s one that preserves jobs as well as making for an improved branch experience. Why wouldn’t all banks adopt it? Unlike many of their competitors, Nationwide branch staff are incentivised on service and efficiency, but not sales. That means that they are very accepting of a customer talking to someone else by video link, where another bank might encounter cultural resistance and protectiveness.
Moving forward, Nationwide is trialling other technologies such as home-based video and chat integrated within the app. The unifying feature of all of these trials is that, for the first time in generations, technology is starting to bring customers closer to staff rather than further away.
“It’s about technology bringing people together, rather than getting in the way.”
If call centres took the relationship away from local branches, and the internet made the relationship more distant and focused on self service, the latest technologies can help put people back in touch with people. It’s not necessarily about re-inventing the wheel. Where existing technology is well-established, like WhatsApp, it may make more sense to use that rather than spending a fortune on developing an offering that is less familiar to customers.
These trials are all about a “test and learn” model, experimenting and developing systems that work for customers. That in itself drives energy and enthusiasm.
“The days of big projects, where you said two years in advance ‘this is what I want to do, and I’m prepared to wait two years for it to deploy’, are gone. Now you’re putting technology in the hands of colleagues, let them figure out with members the best way to deploy and use it.”
The future of customer service?
Where does the future of customer service lie? The rest of us may not be able to replicate some of the ingredients of Nationwide’s successful recipe. We’re not all mutually owned, and we don’t all have a tradition of service leadership dating back decades. There are, however, many principles that we can adopt that apply to any business in any industry.
Some of these principles are staples for readers of Customer Insight: engaged employees are a necessary precondition for happy customers, processes should be judged mainly on their ability to create great experiences for customers, healthy businesses are built around long-term profits rather than short-term profits.
Most strikingly of all, Nationwide gives us a sketch (if not quite a blueprint) for what a rosy future of customer service might look like as digital technologies become ever more embedded in day to day relationships. It’s a future in which technology brings us closer to customers, instead of pushing them away. One in which we embrace the tools which are most familiar and convenient to customers, using them to build stronger, more human, relationships.
Empowering staff, building trust, and bringing people closer together is a strategy that is paying off for Nationwide—can you say the same for your technology adoption?
*The UK Customer Satisfaction Index is the national measure of customer satisfaction for the UK, covering 13 sectors including Financial Services.
You can find out more and and download the free executive summary at: https://www.instituteofcustomerservice.com/research-insight/uk-customer-satisfaction-index