Easy banking: The connection between the treasury services experience and customer loyalty

Introduction

In a 2018 survey of corporate treasury practitioners, Make It Easy: In Treasury Management, Client Experience Rules, an “easy” experience was cited as the top factor in retaining a relationship with a bank. The initial report detailed the difficulties corporate clients face in day-to-day interactions with their banks, oftentimes in painstaking detail. As one respondent stated: “Easy means flexible. Hard means unwavering. Our ‘easy’ banks get all of our new business.”

As the global economy grapples with an uncertain forecast, banks are taking a closer look at fee-based income sources to ensure they are able to optimize revenue and maintain a healthy bottom line for the uncertain periods to come. Apart from seeking new sources of revenue, banks must also look to deepening relationships with their current clients with a view of increasing wallet share.

On the flip side, corporate clients of banks are likely also assessing their bank relationships. As corporate clients seek to strengthen their own bottom line, it holds that many will begin to consolidate bank relationships in an effort to streamline costs and gain efficiencies. Our 2018 report also revealed that while “easy” doesn’t drive bank selection, it does drive subsequent relationship growth. Simply put, business grows when the bank is easy and shrinks when it isn’t. Our research suggests that with anticipated consolidation, banks with an “easy” treasury experience stand to win new customers from competitors whose experience lags.

We interviewed a new panel of corporate clients toward the end of 2019 and found an increasing number who suggested a direct connection between an easy customer experience and bank loyalty. We asked them to define how they evaluate easy and to measure their banks’ treasury experience. We found that bank clients do indeed create informal and subjective “easy rankings” for their banks that are based primarily on the difficulty (or ease) of executing routine tasks, the responsiveness, knowledge, and consistency of the bank team, and the clarity and efficiency of the bank systems.

What’s more, three clear proxies for “easy” also emerged. For banks seeking to optimize fee income and deepen relationships with high-value clients, banks must be prepared to offer an experience that meets customers not only where they are but also where they want to be. Banks should be aware that they are already being evaluated by their customers on their ability to meet these customer needs.

While we know treasury services CX has lagged behind consumer trends and digitally-enabled experiences in recent years, the new COVID-19 economy is making this a now or-never moment for treasury services. While the focus used to be on making customers loyal to their bank, this is a time in which banks need to show loyalty to their customers.

With needs, behaviors, and conditions continuing to evolve, banks must maintain a pulse on their customers. If banks do not address the difficulties plaguing treasury experiences, their clients will likely start moving their business to competitors.  

How do clients define and measure “easy” banking?

The effort required to improve the experience for corporate clients should not be underestimated. It’s a multifaceted challenge that impacts nearly every touchpoint between treasury practitioners and their bank. What’s more challenging for banks, though, is measuring progress made in creating better client experiences and becoming easier to work with. Commonly held customer performance indicators for establishing a baseline or measuring progress in becoming easier have remained elusive.  

For banks sharpening their focus on fee income and increasing share of wallet with their current clients, creating a better CX within treasury services will be a key driver of success. From our research, it is clear that bank customers will continue to use their own metrics and evaluation criteria and place their business accordingly. With an eye toward creating an easier client experience, we developed a primer for creating an experience that will win new business and create deeper relationships with current clients. 

When assessing the ease of your treasury CX, we find it helpful to leverage the relationship lifecycle to help pinpoint where “easy” comes into play from sales, onboarding, servicing and administration, through renewal. In our original report, we synthesized issues spanning the lifecycle into 10 categories of commonly felt painpoints for clients. 

Throughout our interviews, the best-in-class stories we heard were not remarkable in any way and correlated strongly with the 10 principles of easy banking. Experiences that rendered a bank best in class included opening an account in a few days, maintaining the same bank relationship team for more than a year, closing service issues by the end of the day, and documentation that is easy to understand. In short, all experiences that should be achievable for banks and their treasury teams. That also means banks have tremendous opportunity to raise the bar for their clients. However, if banks are going to meaningfully manage these painpoints, they must be able to measure progress.

Our research found that banks are being measured in four ways across the 10 principles:

• With a ruler (the height of the pile of required documents)
• With an hourglass (how long does it take?)
• With an abacus (how many clicks, how many e-mails?)
• With a compass (system ease of navigation, bank who to call)

When we look closer at the principles of an easy CX and these proposed measurements, three proxies emerged and begin to form the primer for measuring progress made in becoming a bank with an easy, enviable treasury experience. 

3 Proxies for “easy” banking

If we look at the four types of measurement against the treasury client lifecycle, we see an obvious starting point for banks seeking to measure their efforts to improve their client experience, deepen relationships and increase engagement

1) Account opening 

Outranking any other painpoint across the client lifecycle, the top experience banks are being evaluated on is the ease of their account opening/implementation process. From our research, account opening is considered the universal proxy for ‘easy.’ As one respondent said with stunning clarity: “ [Banks] can open an account for us in 24-48 hours. That’s why we have so many accounts [with them]. They’re well down the list in our credit facility and far from our largest operating bank – but they have the most accounts.” 

Said another: 

Given this is the first encounter for any client, it’s no surprise the universal proxy for easy is tied to the experience in opening a new account or adding a new product or service. How can we measure for an easy account opening experience? Here are a few ideas:

1. Elapsed time from start to finish (accounts and services). From the date the customer confirms they want a service to the time they are able to use it.
2. Volume of documentation required; how many "one more thing" requests? Count the number of requests after the first set of instructions for set-up 
3. Clarity of instructions (plain English vs complex legal language). Is there a great deal of legalese to be read through? How many pages of documentation  to set up a benchmark set of new account / services? 

2) Knowledge and consistency of the bank team

What may seem as a softer category to measure, our research finds that corporates ascribe “easy” to bank teams who truly know them and know their business. As one client stated: “Easier banking starts with people. Externally-focused people make it easy. Internally-focused people make it hard.”

Clients also directly connect the value of bank teams to their ability to provide resolutions. Corporate clients are evaluating bank teams in the following ways:

1. Relationship turnover/team continuity/experience levels
2. Relationship planning/annual reviews:
   • Are the clients priorities and significant projects shared and reviewed
   • Are the client's long term and short term goals shared?
   • Is the clients CALENDAR of priorities understood?
3. How many people does it take to solve an issue?

The extraordinary circumstances around COVID-19 and the rollout of the CARES Act could not have demonstrated better the high stakes around the quality of your teams. A high quality bank team is marked by customer centricity and responsiveness, deep expertise on their client’s industry, and key personnel. These teams intimately know the unique goals, operational challenges and history, and bring that expertise to their oversight of services. In our own experience helping more than 25 clients ramp up for the PPP, we saw banks with teams who knew their clients well enough to anticipate needs and could manage demand proactively far better than those who did not. Banks whose teams know their clients, their industries, and can serve them proactively will ultimately win wallet share. 

3) System navigation/user experience/self-service

The final proxy should come as no surprise. Corporate clients also evaluate their banks based on the ease of using their systems and the availability of digital, self-service tools. Perhaps even more pressing now as we settle into life mid-pandemic, banks must place a priority on digital experiences and investment in creating easy online banking tools. For many mid-market banks, common corporate transactions still require a phone call into the bank where service requests cannot be initiated or monitored online.

Banks will depend on digital experiences to fulfill their customers’ goals and to grow their revenue. Picking the right targets will be essential, especially given limited resources and budgets

While creating these experiences does require significant investment of resources, the measurement around this proxy is straightforward. 

1. Number of clicks/screens to perform routine tasks
2. Elapsed time for common tasks (e.g. adding a new user)
3. Critical system availability
4. Percentage of routine capabilities fully available via mobile/tablet app

Conclusion

As the economic uncertainty continues to take hold, banks that are taking a closer look at fee-based income sources to optimize revenue must look at their treasury customer experience. We know from our research that corporate clients are already evaluating their banks and the bar is low. As corporates seek to consolidate relationships with vendors and bank partners,  our research suggests that banks with an ‘easy’ treasury experience will ‘win’ this business.