Chattermill on CX in Banking

Table of Contents

1. Banking is a battlefield
2. Key Insights
3. Methodology
4. Sensitive nature of users
5. Competitor Benchmark Data
6. Focusing in on Narrow Needs
7. The need for security
8. Impact Analysis
9. Conclusion
Banking is a battlefield
The retail banking industry today is a
battlefield. Banks are under attack from
all sides. On one front retail banks are
under threat from fintech startups.
Consulting firm Mckinsey track over 2000
fintech start-ups vying to pick off
segments of the banking sector by
developing highly-effective customer
solutions.
It’s not just the fintech challengers that
banks have to worry about too. Google,
Apple, Facebook, and Amazon have lots of
customers and sophisticated technology,
alongside a vast amount of customer data
which give them the capacity to start
providing peripheral digital banking
services.
With the advent of Open Banking, it does
not seem far fetched at all that large
technology firms will enter the market.
Amazon is currently exploring the option to
offer their customers bank accounts via JP
Morgan Chase as it seeks to strengthen
ties with millions of customers who
interact with the site on a day to day basis
(Finextra, 2017). Facebook has already
implemented P2P payments into their
messenger app.
In China, Alibaba and Tencent have
become the dominant operators in China’s
$5.5tn payments industry. The big tech
players also have money to burn. Together
the tech firms have $330bn of net cash
(cash less debt), a ratio of twice their gross
cash flow.
Technology companies also have a knack
for skirting around complex rules and
regulations that protect entrenched
industries. You only have to look at other
industries to gauge the threat the tech
players pose.
Uber as everybody knows, is a taxi service
that broke into the sector without being
regulated. The hotel industry accuses
Airbnb of doing the same on their patch.
Napster was shut down in 2000, and the
music industry has been retooling it’s
business model ever since, with the help
from Spotify.
Perhaps the most significant warning is
Ant Financial the $150 billion company
spun out by Alibaba, the e-commerce giant
partly due to the unfettered regulatory
regime in China. Tech companies with
financial industry aspirations will find a
way to challenge industry incumbents.
In an increasingly competitive world, the
pressure is on across the board to
innovate, iterate and provide a better user
experience. When comparing companies
with above and below average customer
satisfaction score, leaders experience four
times more growth in value than industry
laggards according to data from the
American Customer Satisfaction Index
(Mckinsey, 2017).
There’s never been a more pressing need
to understand customers’ wants, needs
and pain points. That begins with bringing
in data and analytics based insights about
what matters to customers and how best
to deliver it to them.
1
Key Insights
With challengers attacking on all fronts it’s never been more critical for banks to
set themselves apart from the crowd. Customer experience should be at the heart
of a banks growth strategy to differentiate their service to win and retain
customers. Chattermill’s analysis of customer feedback across banking apps in
the UK has identified considerations banks need to make when creating or
improving apps.

Our analysis shows that Natwest and Halifax have the

highest net sentiment. According to data from Bacs (Bacs
Payment Schemes Limited), they have also acquired the
most new current accounts so far in 2018.

Revolut has the highest net sentiment recorded amongst

the challenger banks. Second only to incumbents Natwest
and Halifax.

Customers have very acute needs when it comes to their

banking app and are very sensitive when they cannot meet
them.

Customers equate their customer service with how the

bank is handling their money.

At a top line level, when looking at the sentiment drivers,

slow processing of payments and login difficulties were
the two largest drivers of negative sentiment amongst
users of banking apps.

We regularly share our thoughts and if you’d like to read more of our insights on
customer experience, artificial intelligence, NPS and more then head over to
chattermill.io/insights

Written by: Jack Miller and Sam Frampton

Questions? Contact team@chattermill.io

2
“Customers should feel that we’re looking out for
them, helping them, got our eye on what’s going on
and making life genuinely easier. Our journey is
very much about finding solutions that are right
for our customers using the power of data”

Paul Rippon
Deputy Chief Executive
Monzo

“A big priority for me is listening to our customers,

and we’ve introduced a system that helps us to do
that, and I’ve been using it myself. We take
customer feedback and follow up on some of the
changes they’ve asked us to make”

Les Matheson
CEO, Personal & Business Banking
Natwest
Methodology
Research Outline
To determine the considerations banks need to make when designing
customer experience for their mobile application.

Design
Chattermill analysed upwards of 100,000 pieces of customer feedback over a
year’s worth of reviews from the iOS and Google Play app stores. We selected
16 banks based in the UK including challenger and incumbents banks. To
apply our machine learning text analytics to extract theme and sentiment
insight from the unstructured text data.

Data Collection
App store based customer feedback is a powerful source of customer
experience insights, it represents actual customers who use the product on a
day to day basis proactively giving their experience of their bank.

App store data represents ‘the new age’ of feedback as trends shift towards
the mobile-based economy. The app experience is imperative and of greater
importance than branch experience and enables the identifcation of CX
trends within the feedback much easier across companies and themes.

3
Sensitive nature of users
Positive Sentiment
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If you look at some of the most common From our analysis of reviews, we found
apps on consumer phones, all of these that a large number of comments explicitly
apps figured out how to drive analysed mentioned “daily” or “24/7”. Pain
recommendation amongst users and points are felt much more often and feel
provide a customer experience that goes extreme to the customer due to the
above and beyond expectations. frequency at which they occur.
Consumers use these apps for pleasure
every day. Think Spotify, Snapchat, At a top line level, we found comments
Instagram, Amazon and Uber. also tended to be more favourable if the
mobile app had an option for ‘round-the-
These companies gather customer clock’ customer support via phone or chat.
feedback data and use it as fuel to direct Comments tended to be more negative if
their customer experience strategy. The the user wasn’t satisfied with the
likes of Google and Facebook are using response time from customer support.
smartphone cameras and APIs alongside It’s no surprise that customers favour
software such as optical character quick response time to their questions;
recognition (OCR) and electronic what isn’t so simple is for a bank to
signatures to make user experience faster, monitor at scale support standards.
cheaper and lower-friction experience.
Failure to live up high standards set by Beyond quick support time, our analysis
challengers lead to satisfaction to take a indicates banking apps had positive
negative hit. feedback when apps allowed them to
perform their daily tasks efficiently. Quick
Consumers now expect a seamless and straightforward transfers and
experience from the get-go. Failure to payments and being able to view account
match customer expectations and banking information were strong drivers of positive
app users can be particularly acute to pain sentiment.
points and poor CX. 4
Competitor Benchmark Data
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Natwest and Halifax, based on our Similarly, Santander most significant

unstructured analysis of feedback data, driver of negative sentiment was also
currently record the highest rating of pending payments. User's again stated the
positive net sentiment amongst banking importance of being able to see future
app users. payments.

Natwest and Halifax have also Lloyds and Barclays most significant driver
outperformed competitors in winning the of negative sentiment was contactless
most customer new accounts in 2018 payments. Users of Barclays often cited no
according to data from Bacs, strongly support for their card on Android pay as a
indicating that positive sentiment is a big pain point.
critical component of growing a broader
user base. Out of the challenger banks, Revolut led
the way and received strong positive
The key drivers of positive sentiment for sentiment from users on transfers. The
Natwest and Halifax for users were driven challenger bank Atom ranked lowest out of
around balance updateds, account the challenger banks and the most
information and transfers. For Natwest, significant driver of negative sentiment
the most significant driver of negative was glitches and freezing on the app
sentiment was pending transactions. across devices.
User's often cited a lack pending transfer
information as their most significant pain
point with the app.

5
Focusing in on narrow needs
41264
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0
Product Contactless Direct Debit Managing… Pending Availiable General Credit Cards Fingerprint Transfers
Analytics Payment Transactions Balance Recognition
Information

Themes

We found that many users only have a Yet when fingerprint recognition was not
small number of narrow, acute tasks that available, it was the feature most asked
they regularly use their mobile banking for in customer feedback on the App Store
apps to achieve - tasks such as viewing across devices.
bank statements, transferring money and
making payments. Consumers also paid close attention to
credit card product features when
Users expect the CX for performing those assessing their customer experience.
tasks to be seamless, any problems are Quick and easy activation of their card and
amplified; because most users focus only low exchange fees were the biggest drivers
on a small number of mobile tasks. Not of positive sentiment for credit cards. The
being able to complete one of their key biggest drive of negative sentiment was a
tasks feels like a significant CX failure. failure to deliver the customers card, and
not having access to their transaction
Transfers, fingerprint recognition and history in real time.
credit cards were the biggest drivers of
positive sentiment amongst banking app It sounds straightforward, but easy
users. Customers valued the ability above banking with excellent customer
all else to make payments and transfers in experience is deceptively tricky. If a bank
seconds. fails to deliver basic tasks and listen to
their feedback, customers move on to a
A more in-depth analysis of fingerprint bank that does.
recognition, highlights that it’s a highly
desired product feature. If the app had
biometric logins, the user often equated
the app with being easy to use and secure.

6
The need for security
38
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Net Sentiment

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-60
-80 -77
-80
Identification / Verification Auto Log-Out Information General

Themes

While it isn’t necessarily a fair On a broader level, if the app performed on

assessment, Chattermill analysis found a narrow range of tasks essential to
that many mobile banking app users customer experience users felt secure
equate their CX with how the bank is using the app.
handling their money. That means a poor
user experience can translate to a loss of Analytics based insights on security
faith in the banking institution as a whole. features about what matters to customers
And this isn’t surprising, as we already and how best to deliver it to them is a key
know the impact mobile app CX can have is essential to build a long-term
on overall customer satisfaction. relationship with the user, and if eroded it
can be highly destructive.
Analysis of feedback highlights the
frustration users can face on the Key Comments
identification process when signing up to a
new account. It is the most significant
driver of negative sentiment and often is New app is bad. Can view
the biggest source of detractors lowering a how much money I have but
brands NPS score. not make payments

Some of the biggest complaints were a

failure to verify identification quickly, and
an inability to access information on Downloaded and set up but
account rejection and lockdown. Key still can't do anything with
themes picked up when assessing drivers app. Keeps saying awaiting
of positive sentiment were email alerts for verification. Can't get a
potentially fraudulent activity, easy access physical card, can't move on
to 24/7 customer support and in setting up.
notifications of transactions.
7
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8
Conclusion
The banking world is currently engaged in something of an arms race to offer customers the
best experience on the market. As some banks innovate, creating user-friendly online
features, others get left behind — and will inevitably lose customers due to their failure to
prioritise CX in mobile applications. Market leaders will see themselves upended by
companies applying greater focus on consumers.

Analytics provided by Chattermill can help banks identify where they can innovate and iterate
based on individualised feedback from their own users. What those users want, need and
expect can be prioritised to create a CX strategy with the customer at its centre, building
loyalty and overall brand satisfaction by giving the customer the experience he or she is
looking for in a mobile banking app.

• Customers now expect exceptional CX. Expectations have been raised from
fintech challengers and tech industry giants. It's far more accessible now to
switch bank. Banks have to be highly sensitive to the customer's needs.

• Focus where the needs are: Understanding which aspects of your app
customers are using most can help you determine where to push for
improvements. Companies can also address large swaths of CX feedback by
focusing on core app capabilities.

• Secure it: Banks that offer best in class identification verification

accompanied by responsive customer service can grow and seize market
share.

• Customers have a narrow range of tasks to be completed on the app on a day-

to-day basis. Failure to perform those tasks efficiently has a massive impact
on banks and be the difference between industry leaders and laggards.

Endnotes
Bacs, Current Account Switch Service Dashboard, retrieved May 5, from https://www.bacs.co.uk/DocumentLibrary/CASS_dashboard_-
_published_25_Jul_18.pdf

McKinsey (2017). Putting customer experience at the heart of next-generation operating models. Article. [online] Available at: https://
www.mckinsey.com/business-functions/digital-mckinsey/our-insights/putting-customer-experience-at-the-heart-of-next-generation-
operating-models [Accessed 15 Aug. 2018].

McKinsey, (2016) Fintechnicolor: The New Picture in Finance, retrieved August 15th from https://www.mckinsey.com/~/media/mckinsey/
industries/financial/fintechnicolor-the-new-picture-in-finance.ash.pdf

Finextra (2018). Amazon talks to banks over checking account - WSJ. [online] Available at: https://www.finextra.com/newsarticle/31768/
amazon-talks-to-banks-over-checking-account---wsj [Accessed 15 Aug. 2018].

Finextra (2017). Facebook Messenger P2P payments arrive in the UK. [online] Available at: https://www.finextra.com/newsarticle/31298/
facebook-messenger-p2p-payments-arrive-in-the-uk [Accessed 15 Aug. 2018].

9
About Chattermill

Chattermill is a leading provider of customer experience and text

analytics solutions.

We use artificial intelligence to help companies understand and improve

their customer experience. Our AI analyses customer feedback at scale
and automatically identifies specific recommendations for how our
clients can deliver a better service or product to their customers.

From optimising touchpoints to sharing customer insights throughout

your organisation, we bring customer feedback to life.

For more information and insights contact insights@chattermill.io or visit

chattermill.io