Exceeding your customers’ expectations with empathic banking
Empathy, the ability to understand and share customers’ feelings, has always played an important role in marketing. Thanks to modern technologies, companies can elevate empathy for their customers to a completely new level. This concept applies to the financial services sector as well. Empathic banking is the buzzword of today.
- Empathic banking enables banks to understand their customers much better, enabling them to create customized advice and products with a high success rate.
- The data collected about a customer or potential customer is the foundation of empathic banking.
- Smart digital tools, often made available by external partners, provide and analyze this data.
From empathy to empathic banking
Before discussing empathic banking, it is important to understand the role empathy plays in the corporate environment.
Empathy, a so-called soft skill, is important in many areas, e.g., for customers in retail, as a parameter for marketing activities, with the keyword being “empathic marketing,” or even in personnel management. Nevertheless, why exactly is empathic banking so special?
Various studies demonstrate the importance of empathy as a driver for career progression (Blickle, 2014) or as a skill in human resources (DDI, 2016). Anyone with the ability to recognize emotions can better evaluate situations and better motivate people. Unfortunately, as the DDI study shows, many managers still lack this ability.
Empathic banking is primarily a matter of letting go of preexisting views: Not only should we look at customers as being part of a certain age or income bracket, but we should also understand them individually. Understanding your customers is the key to more customer satisfaction and higher revenue.
How empathic banking improves a bank’s customer service
In every industry, customers will feel better, be more loyal and be more willing to buy when they feel understood. It is not without reason that social media, personalized websites and trigger-based marketing play such an important role. Banks often trail far behind in this area.
Empathic banking facilitates an entirely new level of responsiveness as well as a deep understanding of customer needs. Instead of ready-made products, businesses can create individualized solutions that take even the customer by surprise. The result is more business, more sales, and more trust in their main bank on the part of the customer.
A customer has substantial savings that are idle in her checking account. She is a renter but has researched home loans in the past. It appears that she is hesitant in this matter. With empathic banking, the bank can make this customer an offer that is as low-risk as possible, for example, an offer with more equity.
Empathic banking is not an end in itself but serves economic objectives. Banks want to and need to understand their customers: their intentions and objectives, but their concerns and needs as well. A few numbers and one consultation alone are no longer sufficient. True empathy must have a much more solid data foundation.
Banking software with an empathy switch
Empathic banking requires a variety of data that continuously need to be re-analyzed and synchronized. Often, bank staff cannot do this all on their own or cannot do it fully. Therefore, software-based solutions such as banking CRMs are the basis for true empathic banking.
Present-day computing power facilitates the processing of many macro- and microeconomic data and customer behavior analysis, wherever possible. Bank transactions should be considered as part of this, just like customer behavior on websites, social media platforms, or at branch offices. Customers can sense that their bank shows an interest in them if their bank advisor touches upon personal details and individual needs during their discussion. It is precisely this information that empathic banking provides.
If the right structures and technologies are in place, it is possible to classify customers more specifically than ever before. With empathic banking, you elevate customers to a new level of satisfaction, which was previously not possible to this extent. The use of AI, machine learning and intelligent automation provides the ecosystem to achieve these goals sustainably.
Along with companies in other industries, many banks count on external expertise when implementing such technologies. That is how an ecosystem of specialized partners is formed that facilitates the smart digital transformation, thus also helping implement empathic banking.
Did you know? For almost 25 years, BSI has been the leading software company for solutions ranging from CRM to CX. BSI helps banks digitize their customer relationships: A 360° view, a link to your core banking system and flexible processes are included. Would you, too, like to have a CRM that can show more empathy