The importance of customer service in UK financial services

For decades, the commerce and retail sectors have held on to a secret that the UK finance scene is now realising - good user experience lowers the company’s bottom line.

That’s because when customers are happy, companies spend less money trying to acquire new customers. It’s been said that it costs five times more to acquire a new customer than it does to retain an existing one.

Happy customers provide free word of mouth marketing that draws in more customers. And of course, happy customers are the ones who are more willing to open their wallets.

The challenge for financial providers in the UK that offer largely similar services, is differentiating themselves. Which is why delivering a good customer experience is all the more crucial. Unfortunately, the customer service report card for financial institutions in the UK is not looking good.

The problem is, unlike the clear cut compliance and regulation standards that banks are accustomed to, there isn’t a one size fits all approach when it comes to customer service. Some users prefer accessing digital services from their homes, while others are still craving the human touch.

To attract and retain customers, UK banks and fintechs need to find a happy medium and provide personalised communication that’s secure and cost-effective, at scale. No easy feat!

Does digital banking in the UK lag behind global counterparts?

Though digital banking is being rapidly adopted in many parts of the developed world, the story in the UK is quite different.

The UK has just slightly more than 3 million active users since major banks first adopted the practice on 13 January 2018. That’s barely 4% of its population, trailing far behind the global leaders of Thailand (83%), UAE (69%), and Hong Kong (54%).

This number comes even after digital transactions tripled in the beginning of 2020. Since then, the number of businesses using contactless systems has hovered around 31%. A significant improvement from the initial starting point of 8%, but still a far cry from universal adoption.