For the typical banking customer, there are some interactions with a financial institution that are as predictable as they are frustrating.

A call to the customer service line will almost inevitably require entering information into an automated system before being put on hold — and then being asked to provide those same details again once a person picks up.

Lost your wallet? Count on multiple calls to different parts of the bank, one to cancel and replace your credit card, and another to do the same for your debit card.

Need a loan to renovate your kitchen? Don't expect the fact that you already have a mortgage with your bank to make the application process any simpler.

These are all what bank analysts refer to as "pain points" — interactions that frustrate a customer, potentially driving them away. But while these encounters may still be common across the industry, a handful of banks are on the forefront of a movement to eliminate this kind of friction in the customer experience. They are re-engineering how their businesses operate with a focus on what's called the "customer journey."

The idea is to identify where customers hits snags in any process, whether that just slows them down or causes them to discontinue what they are doing. Fixing the process so that doesn't happen is hardly ever simple.

In Detroit, the bank unit of Ally Financial is working to make sure that customer service reps in their call centers know who is on the line — and what needs that person might have — before they even pick up the phone. In San Francisco, Bank of the West is importing a product from Europe designed to ease a customer's path through the myriad financial transactions involved in home ownership. And in San Antonio, Texas, USAA is tackling all kinds of pain points that harm customer retention and overhauling its management structure to make this effort a continuing focus.

An emphasis on the customer journey has the potential to help banks achieve some perennial goals. For as long as some bankers have been in the business, they have been looking for a way to successfully cross-sell additional products to existing customers — getting someone with a basic checking account to add a credit card and maybe look into investment services, or persuading a mortgage customer to consider a home equity loan.

There also has been an effort over many years to break down the silos that have typically made it difficult for banks to serve a customer holistically, rather than as a disparate entity within each line of business.

Customer journey mapping unites these efforts, while also layering on data analysis in a way that can offer meaningful and actionable insights.

Given all the moving parts, successfully implementing a customer journey approach is a complex undertaking, involving significant investment in information technology and, in some cases, a broad restructuring of management responsibilities within the bank.

Turning data into actionable insight

"We have a plethora of information on our customers," said Diane Morais, president of consumer and commercial bank products for Ally. "How they do business with us. What kind of products they have. Do they interact with us online? On mobile devices? How frequently do they call? What kind of relationship do they have with us?"

A lot of banks struggle with how to effectively use the customer data they have to achieve business goals.

But in 2017 Ally initiated a strategy meant to tackle that challenge.

Diane Morais, president of consumer and commercial bank products and Ally Financial.
Diane Morais, president of consumer and commercial bank products and Ally Financial. Mitchell Kearney


Using the data it had already collected along with analytical frameworks based on demographic and psychographic data, the bank created a set of archetypal customer "personas" that it uses to guide customer-facing employees in the way they communicate.

For the online-only Ally, call centers are an especially important touchpoint for customers, and the bank is intent on making those interactions productive and positive. Before employees answer the phone, they know not only the identity of the person they'll be speaking to, but some key facts that will help determine how they approach the conversation.

Is it a retiree on the line, with a preference for traditional high-touch banking relationships and a generally conservative approach to new products and technology? Or is it a millennial, whose usual interactions with the bank have been through the mobile channel but who, for some reason, has decided she needs to talk to a person today?

This information primes the call center employee to anticipate the needs of that individual, ideally making a call to customer service — an experience virtually nobody looks forward to — more pleasant in a way that cements and potentially expands customer relationships.

Getting to that point was a challenge.

But using advanced analysis of customer data, banks at the forefront of managing customer journeys have found that they are able to improve the rate at which prospects are turned into customers and at which existing customers begin using additional services.

"It's about how we get more relevant in the way that we talk to them," Morais said.

A shift in responsibility

In many cases the price for banks moving to a customer journey approach has been a substantial restructuring of operations.

Over the past two years, USAA has broken down its internal reporting silos and rebuilt them with the aim of dramatically changing the way customers interact with the bank, said Scott Lippert, vice president and general manager of bank shared services.

"We've organized around member experiences," Lippert said. "We've taken every way that a member can experience USAA Bank and we've given that to an individual to be responsible for that end-to-end experience regardless of channel."

USAA, which serves only current or former military members and their families, refers to its customers as "members." It is largely a digital bank, though it also has some physical locations.

One example of how USAA's overhaul has improved the customer experience is in its handling of lost cards, Lippert said.

Scott Lippert, vice president and general manager of bank shared services at USAA.
Scott Lippert, vice president and general manager of bank shared services at USAA.


In the past, a customer who lost a wallet containing both a debit card and a credit card would have to go through two completely different processes to get new ones. This made sense to the bank from the perspective of its internal organization, but it was very frustrating to customers.

"The lost debit card would report up through one silo, and the credit card up through another silo," Lippert said.

But, he added, "That should be one experience." To make it that way, USAA forced two formerly separate segments of the bank to organize the card replacement process around the needs of the customer, not the convenience of the individual business line.

The bank also had to change the responsibilities of the managers in charge of the process. Now, Lippert said, USAA has one team that is responsible for the lost-card replacement experience, with the goal of making the process simple for customers, even if it's complicated on the back end.

Bank of the West's five-step process

A willingness to take on complicated back-end projects in the name of providing a better customer experience is one of the hallmarks of a bank focused on the customer journey.

At Bank of the West, the move to a customer journey approach has involved the creation of what amounts to an internal consulting practice.

The effort is led by John Finley, the bank's head of innovation and customer journeys. Finley and his team work with business units on "embedding" a customer journey approach into the way the bank operates.

"A customer journey approach is an approach to putting the human right at the center of what we're designing for," said Finley, who spent several years in Paris at Bank of the West's parent company, BNP Paribas, before returning to San Francisco last year. "Putting the customer right at the center and then mapping out the entire customer experience across all the touchpoints between the customer and the bank and really putting the customer's needs at the heart of what we're focused on delivering."

It seems like an obvious idea, really. One could reasonably ask why banks haven't always been designing their products this way. The answer, in part, is that it's complicated.

For one, the data that helps identify the "pain points" that harm customer relationships hasn't always been there. And for another, actually making it work requires new ways of thinking that don't necessarily come naturally to bankers who rose through the ranks in a more traditional era.

When Finley works with business line leaders on improving the customer journey, he said, the first phase in a five-step process for solving a problem is to convince them to "not think like a banker."

John Finley, head of innovation and customer journeys at Bank of the West.
John Finley, head of innovation and customer journeys at Bank of the West.


This phase entails cultivating empathy for the customer — "really understanding what the customers' needs are" — and making a commitment to address those needs even if that means stepping out of traditional lines of reporting or protocols.

Next comes definition of the problem, again from the customer's perspective rather than the bank's, and the assembly of a multidisciplinary team to brainstorm possible solutions. At Bank of the West, the usual practice is to create prototype solutions that are tested on small groups of customers, then refined before getting rolled out more broadly, Finley said.

As an example, he cites a program launched by BNP Paribas Fortis, a Belgium-based unit of the parent company. The program, called Home on the Spot, forced bankers to step well outside of their comfort zone.

Fortis recognized that one of the major life challenges faced by almost all of its customers was managing the financial stresses of their living arrangements. Over the course of a lifetime, bank customers deal with a common set of related tasks, such as renting an apartment, moving, buying a house, renovating, refurnishing, upgrading appliances, and more.

It also happens that Fortis, like most banks, has products designed to help finance many of these activities.

Though "you obviously can't deliver all of that capability all at once," mapping a customer journey to address part of that experience is possible, Finley said.

Fortis envisioned a service that would smooth a customer's path through both the home search and financing process. This also would create opportunities for the bank to highlight how it could help with related products.

The end result is a Fortis-branded online service that allows prospective homebuyers to search real estate listings and provides other services.

"So as somebody is going through the home search experience — before they're even thinking about buying — the bank begins to establish that relationship," Finley said. "So that when you then get to the stage of applying for a mortgage, BNP Paribas is the first partner you're going to be thinking of."

The effort is not just about a mortgage, though. The intent is to stay involved with the customer well past the mortgage transaction, and connect them with different business lines within the bank, including, for example, those that offer financing for appliance upgrades or home renovations.

"Outside of applying and getting financing ... there are a lot of different things you have to do that make moving so difficult," Finley said. "So the idea behind this approach is to really partner with the customer through this entire life cycle."

The Home on the Spot program is young enough that BNP Paribas doesn't have much data about its impact on the bottom line. However, customer feedback has been so positive that similar efforts are rolling out to subsidiaries, like Bank of the West.

USAA has a similar holistic approach for customers seeking auto loans, and it uses journey mapping in that effort. The program, formerly known as Auto Circle, is now called the USAA Car Buying Service.

A 2017 Forrester Research report discusses the USAA program this way: "It uses journey mapping to break down life events into discrete tasks and identify the emotional states and needs that the brand can satisfy at each step along the way. For instance, rather than just selling auto loans, USAA extends its services across the entire journey. With Auto Circle, USAA helps customers research, find, negotiate the price of, finance, insure, maintain, and ultimately resell vehicles."

A strategy to optimize digital channels

As banks move toward increased digitization of the customer experience, a focus on the customer journey can be a helpful way of optimizing online and mobile services, said Aurelie L'Hostis, a London-based analyst with Forrester.

"The reason for that is that it helps align the different stakeholders in the company behind a common and very clear business strategy," she said. "That means they can work cross-functionally, but it keeps the customer at the center of what they are doing."

Where some companies are struggling with a focus on the customer journey, she said, is in taking into account all the different perspectives within the institution.

"You have people from lines of business and marketing trying to design the journeys and decide what kind of functionality they want, and they ask the people on the tech management side to develop everything," she said.

But unless the technology team is involved in the process early on, "it is very difficult," she said.

Similarly, banks that focus on the customer journey from a technology perspective might inadvertently handicap themselves.

L'Hostis said that she worked with one insurance firm that wanted to make it easier for customers to file claims. "They launched a claims app and what they found out later was that their agents were actively discouraging customers from using the app because they were worried that it would cut them out of the important moment of truth — which is when the customer would make a claim — and that would endanger that customer relationship."

Quote
"We've taken every way that a member can experience USAA Bank and we've given that to an individual to be responsible for that end-to-end experience regardless of channel," says Scott Lippert.

At Ally, the management team has bought into the idea of creating multidisciplinary teams to manage different aspects of the customer journey.

"It is absolutely changing how we are working," Morais said. "We are going through an important transformation from what we consider the old way of delivering technology and solutions to using an agile framework and creating much more integrated teams."

This entails creating squads of specialists from various parts of the bank — business leaders, marketing experts, technologists — and giving them responsibility for managing the way customers move through specific elements of their relationship with the bank, such as onboarding, navigating the mobile app or applying for a loan.

"They come together in a highly collaborative way, really mapping out the customer journey and thinking about it in an end-to-end perspective," Morais said.

Even small steps can pay off

For many of the institutions that have moved wholeheartedly into managing the customer journey, that has involved a substantial investment of time, managerial attention and money.

But even for banks unable to make the kind of investment that Ally, USAA and Bank of the West have, real benefits are still achievable. Most banks are sitting on a vast trove of data about their interactions with customers that, with a little help, they could use to greatly improve the customer experience, whether it be online or in person.

"They have the data already that will answer 75% of the challenges they have within the institution," said Rob Heiser, founder and president of Segmint, which helps banks use customer data to identify and anticipate customer needs.

He suggests banks take at least this one item out of the customer journey toolbox: customer journey maps.

Journey mapping can cover a customer's entire relationship with a bank, but, in general, it tends to be used to analyze more isolated interactions, focusing on friction points in specific experiences. For instance, most banks have access to data that would let them see which customers most frequently abandon the loan application process and where in the process they do so.

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"You're trying to find out where the friction is and why there is fallout," says Rob Heiser.


An anecdote from a report by McKinsey & Co. illustrates the value of how a relatively isolated set of data points can shed significant light on a bank's business. Authors Raffaella Bianchi, Michal Cermak and Ondrej Dusek cite their experience working with a regional bank that was concerned about losing out on potential loan customers. The bank determined that 80% of its prospects initially accessed the bank's website, but that only one in four of them remained online, while the same number called a call center and a slightly smaller number went to a branch.

"The channels' differing performance pointed to specific problems," they wrote. "Ultimately, more than one-fifth of customers who visited a branch ended up getting loans. But in the online channel, less than 1% got a loan after almost 80% dropped out rather than fill in a registration form. Finally, in call centers, a mere one-tenth of 1% of customers received a loan — perhaps not surprising, since only 2% even requested an offer."

After collecting that information, the bank greatly simplified its online registration process and set up an internal system to clarify how it would handle customers who began their interaction in one channel but switched to another.

The result, according to McKinsey, was a 25% increase in loan sales across the board, as well as a similar uptick in other products.

"That's what you're trying to do with journey mapping," Heiser said. "You're trying to find out where the friction is and why there is fallout."

Avoid the tech trap

There is a danger, though, in tying customer journey efforts too tightly to technology, warned Forrester's L'Hostis.

"When you talk to banks, they all tell you 'Yes, we want to improve the customer experience, it's the most important thing for us.' But actually, when you start asking them about their digital strategy, what you hear is that they want to push everything digital. They want a 100% digital sell."

Taking the human element out of the process, she said, can lead to "misunderstanding of customer behavior and preferences, and sometimes low adoption of the tools they develop."

When it comes to customer journeys, it seems, a map is good, but a guide is important too.

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