CX in The Banking Industry

INDUSTRY SNAPSHOT
CX in the Banking
Industry
THE CURRENT STATE OF CUSTOMER EXPERIENCE FOR
BANKS
Isabelle Zdatny, CCXP

XM Catalyst
Bruce Temkin, CCXP

Head of the Qualtrics XM Institute
Moira Dorsey
XM Catalyst
January 2020

XM Institute INDUSTRY SNAPSHOT qualtrics.com/XM-Institute
EXECUTIVE SUMMARY
To evaluate the current state of customer experience (CX), the XM Institute surveyed
10,000 U.S. consumers about their experiences with 294 companies across 20 different
industries. In this Industry Snapshot, we analyze the quality of customers’ experiences
with the banking industry.
UNDERSTANDING THE STATE OF CX IN THE BANKING INDUSTRY

How does the quality of customer experience differ across industries? To address this
question, the XM Institute conducted a large-scale benchmark study where we asked 10,000
U.S. consumers to rate their recent interactions with 294 organizations across 20 industries.1
In this Industry Snapshot, we examine the state of CX in the banking industry. To develop this
Industry Snapshot, we:
§ Found the average XMI Customer Ratings - Overall for each industry. To generate
the average CX rating for each industry, we asked respondents to evaluate their
experiences with companies over the past 90 days.2 These questions – rated on a
seven-point scale – covered the three components of an experience: success (were
they able to accomplish their goals?), effort (how easy or difficult was it for them to
accomplish their goals?), and emotion (how did the interaction make them feel?).3 We
found the XMI Customer Rating - Overall for each of the 294 companies by averaging
the ratings for these three experience components. We then calculated the average
Customer Rating for each industry by averaging the Customer Ratings of the
companies within each industry.4
§ Calculated NPS. We asked respondents who had interacted with a company to
answer the standard Net Promoter® Score (NPS®) question: How likely are you to
recommend <company> to friends and colleagues? Consumers selected a response
from 0 (not at all likely) to 10 (extremely likely). We then determined the percentages
of each firm’s respondents who were promoters (selected 9 or 10), passives (selected
7 or 8), or detractors (selected between 0 and 6). We then calculated the NPS for each
1
Data comes from the Qualtrics XM Institute Q2 2019 Consumer Benchmark Survey – an online study of 10,000 U.S.
consumers completed during May 2019. Survey respondents were representative of the U.S. Census based on quotas
for age, income, ethnicity, and geographic region.
2
See the XM Institute report, “2019 XMI Customer Ratings – Overall,” (September 2019). The XMI Customer Ratings
– Overall are a continuation of the Temkin Experience Ratings. The Ratings were renamed after Qualtrics purchased
Temkin Group in October 2018.
3
We developed ratings for each of the three components of an experience – success, effort, and emotion – by
subtracting the percentage of consumers who rated a company poorly from the percentage of consumers who rated
it highly.
4
Although consumers rated a number of companies for our survey, we only analyzed the ones that received at least
100 consumer responses. Ultimately, we examined data from 294 companies across 20 industries. For this Industry
Snapshot, data on banks comes from over 5,500 respondents evaluating their experiences with 15 large banks.
Copyright © 2020 Qualtrics®. All rights reserved. Page 2

company by subtracting its percentage of detractors from its percentage of

promoters.5
§ Determined likelihood to repurchase and trust. We also asked consumers how
likely they are to consider purchasing more products or services from the companies
they had interacted with on a scale of 1 (extremely unlikely) to 7 (extremely likely). We
also asked how likely they are to trust that the company would take care of their needs
on a scale from 1 (do not trust at all) to 7 (completely trust).
§ Established the frequency and effects of poor experiences. We asked respondents
to identify which organizations they recently had a poor experience with and then
asked, “Since the time that you had a bad experience with these companies, how have
you changed the amount of money you spend with them?” They could answer that
their spending completely stopped, it decreased, it didn’t change, it increased, or that
they haven’t spent any money with that company.
§ Identified the most broken customer journeys. To better understand which types
of interactions are most likely to affect the customer’s perception of an organization,
we asked respondents to identify which journey within a certain industry needs the
most improvement. We also looked at the correlation between which journeys a
customer identified as broken and how likely that customer was to recommend the
company.
BANKS DELIVER ABOVE AVERAGE CX

When we looked at the current state of customer experience in the banking industry and how
it compared to the broader CX landscape, we found that banks:
§ Outperform other industries in the Customer Ratings. Banks received an average
XMI Customer Rating – Overall score of 70%, tying for third place out of 20 industries
(see Figure 1). When we looked at how the banking industry average changed across
different age groups, we found that while banks outperform the 20-industry average
in every age group, they do particularly well with consumers between the ages of 18
and 34.
§ Receive an average Net Promoter Score. We found a strong connection between
customers’ experiences and their likelihood to recommend a company. Companies
that significantly outperformed their industry’s average Customer Ratings also earned
a significantly higher-than-average NPS (see Figure 2). However, despite earning one
of the highest average Customer Ratings, the banking industry receives only an
average NPS. To boost their numbers of promoters, banks should focus the emotion
component of experiences as, of the three elements of an experience, it has the most
significant impact on a customer’s likelihood to recommend. In fact, 88% of
customers who gave a bank a high score for emotion say that they are likely to
recommend the company.
§ Lack enthusiasm amongst older customers. Customer experience is strongly
related to a consumer’s likelihood to rebuy from a company – with a correlation
coefficient of 0.85 (see Figure 3). While banks enjoy higher-than-average likelihood to
repurchase scores amongst younger customers, they lag behind the 20-industry
5
See the XM Institute report, “2019 XMI Customer Ratings – Consumer NPS,” (October 2019).

average for customers over the age of 65, trailing the overall average by five
percentage-points.
§ Inspire customer trust. While a customer’s experience with a company does impact
their likelihood to trust that company, the correlation is slightly weaker than it is for
their likelihood to recommend or repurchase (see Figure 4). While banks’ NPS and
likelihood to repurchase scores are fairly average, they significantly outperform the
cross-industry average when it comes to trust, with over two-thirds of customers
saying that they trust banks to take care of their needs. The difference between the
banking average and the overall average is particularly stark in the two youngest age
groups, where the percentage of customers who trust banks is over 7 percentage-
points higher than the 20-industry average.
§ Deliver few bad experiences. Only 6% of customers who interacted with a bank over
the previous six months say they had a bad experience (see Figure 5). However, of
those customers who did endure a poor experience, 42% of them say that they either
decreased or stopped spending after that poor interaction, which is fairly average
across industries. And while banks deliver fewer bad experiences compared to the
overall average across all age groups, the gap is particularly noticeable in the 45 to 54
age group.
§ Make it difficult for customers to find a convenient branch. Fifteen percent of
customers identified “finding a convenient branch location” as in need of significant
improvement (see Figure 6). However, customers who identified this journey as
broken only gave an NPS that was two points below the industry average, whereas
customers who selected “reviewing statements” as a problematic journey gave an
NPS that was 48 points the industry average.
PROPEL YOUR CUSTOMER EXPERIENCE TO THE NEXT LEVEL
In the decade since the financial crisis brought widespread attention to how the banking
industry treated its customers, many banks have made customer-experience transformation
– especially digital CX – a strategic priority. To thrive in this changing competitive landscape,
banks must establish Experience Management (XM) as an organizational discipline by
mastering six XM Competencies and 20 XM Skills (see Figure 7).6 These capabilities will help
banks succeed in the new environment by allowing them to:
§ Continuously learn. Banks with strong XM Competencies and Skills will be able to
continuously collect and analyze feedback and behavioral signals from the people who
interact with them – gathering the information necessary for understanding the
experiences, perceptions, and attitudes of their customers, employees, and
prospects. For example, banks with robust XM capabilities will be able to identify
which moments most affect the loyalty of key customer segments – such as finding a
local branch or reviewing statements – and then establish listening posts that collect
ongoing insights about the quality of those interactions. These insights will include
experience data (X-data) like NPS or satisfaction scores as well as operational data
(O-data) like products owned or demographic information. Banks who are capable of
combining these two types of data will be able to more accurately forecast the value
6
See the Qualtrics XM Institute report, “Operationalizing XM” (July 2019).

of CX improvements and gain a deeper understanding of their customers’ actual

experiences. For instance, a bank may find that older customers give it lower
customer effort scores because they find its mobile app confusing to navigate.
§ Propagate insights. Once banks understand how the people who interact with them
think, behave, and feel, they will then need to get those insights into the hands of the
people across their ecosystems who are best equipped to act on that information. For
example, banks with strong XM skills will not only recognize that, say, getting help in
a branch is an important journey for customers, they will also be able to quickly share
qualitative and quantitative insights about those interactions with the people who are
directly and indirectly responsible for delivering them, such as bank tellers and branch
managers. Furthermore, they will tailor both the content and the form of these
insights for each role, with customized alerts triggered when certain criteria – such as
a low score for satisfaction or cleanliness – are met.
§ Rapidly adapt. Distributing customer insights in the right form to the right people
across the organization will allow banks to act quickly on the intelligence they’ve
collected and shared, thus enabling them to rapidly create or improve experiences in
a way that addresses people’s changing needs and expectations. For example,
customers’ feedback may highlight that transferring money to a different account is
a key pain point because the stakes are often so high, and the money can take several
days to show up in the new account. Using these insights, a bank’s digital team could
include a feature in its app that allows customers to easily track this process.

The State of CX in the Banking Industry
The 2019 XMI Customer Ratings - Overall ranks the customer experience of 294
companies across 20 industries and are a continuation of the Temkin Experience
Ratings, which have been published annually since 2010. Each company’s Rating is
calculated by averaging their score across success, effort, and emotion.
2019 XMI Customer Ratings: Changes in XMI Customer Ratings :

Industry Averages 2016 – 2019
Groceries 75% Banks Overall Averge
Retailers 72%
Fast Food 70% 73%
72% 70%
Banks 70% 67%
Parcel Services 69%
68% 68%
Streaming Media 69% 64%
60%
Credit Cards 67%
Hotels 65%
2016 2017 2018 2019
Auto Dealers 64%
Insurance 64% Success, Effort, Emotion Ratings
Investment Firms 63%
Banks Overall Average
TV & Appliances 63% 76% 75%
Airlines 69% 68%
63%
59% 56%
Wireless 63%
Software F irms 61%
Utilities 61%
Car Rental 61%
Computers & Tablets 60%
Health Insurance 55%
TV/Internet Service Providers 51% Success Effort Emotion
XMI Customer Ratings Across Age Groups:

Banks vs. 20-Industry Average
79% 76%
72% 68% 73% 70%
65% 67% 62%
57% 57%
50%
18 - 24 25 - 34 35 - 44 45 - 54 55 - 64 65+
Base: 10,000 U.S. consumers, 294 companies, 20 industries

Source: Qualtrics XM Institute Q2 U.S. Consumer Benchmark Study
Copyright ©2020 Qualtrics®. All rights reserved.
Figure 1

Connection between CX and Likelihood to Recommend

in the Banking Industry
ALL INDUSTRIES
Correlation between NPS* versus Industry Average based
CX and Recommend on XMI Experience Ratings
Likely To
Pearson Recommend 2019 XMI Ratings
correlation = 40 compared with their
0.83 30 industry averages 12.2
20
2019 XMI 10 Bottom 4th 0.5 3.7
Experience Quintile Quintile
0
Ratings
-30 -20 -10 -10 0 10 20 2nd Top
-4.1 Quintile Quintile
-20
-30 Average NPS minus
-14.8 industry average NPS
-40
-50
BANKS
Distribution of NPS* Likelihood to Recommend
Banks vs. 20-Industry Average Based on How Banking Customers Rate
Success, Effort, and Emotion
Low Rating Neutral Rating High Rating
55% 54%
Success Effort Emotion
23% 23% 22% 23%
79% 88%
80%
27% 37%
(1 - 6) (7 & 8) (9 & 10) 16% 13% 23% 9%
Detractors Passives Promoters
Percentage Likely to Recommend** across age groups:

Banking Average Overall Average
67% 67% 66% 70% 70% 67% 68% 69% 73%

64% 60% 64%
18 - 24 25 - 34 35 - 44 45 - 54 55 - 64 65+
*Net Promoter Score is a registered trademark of Bain & Company, Satmetrix Systems, and Fred Reichheld.
**These numbers represent the percentage of consumers that selected 8, 9, or 10 on a scale between 0 (“not
at at all likely”) to 10 (“extremely likely”).

Figure 2

Connection between CX and Rebuy

ALL INDUSTRIES
Correlation between Rebuy Versus Industry Average Based
CX and Rebuy on XMI Experience Ratings
Likely To
Pearson Rebuy 2019 XMI Ratings
correlation = compared with their
30
0.85 industry averages
6.8
20
10 2019 XMI 2.3

Experience Bottom 4th
0 Ratings Quintile Quintile
-50 -40 -30 -20 -10 0 10 20
-10 2nd Top
-20 -2.7
-30 Average likelihood to rebuy

-8.6 minus industry average of
-40
likelihood to rebuy
-50
BANKS
Distribution of Likelihood to Rebuy Likelihood to Rebuy
Banks Overall Average Low Rating Neutral Rating High Rating
66% 67%
27% 27% 76% 78% 84%
7% 6%
37%
16% 26% 12%
22%
9%
(1 - 3) (4 & 5) (6 & 7)
Unlikely Neutral Likely
Percentage Likely to Rebuy* across age groups:

65% 65% 67% 67% 69% 66% 68% 66% 71%
61% 64% 64%
18 - 24 25 - 34 35 - 44 45 - 54 55 - 64 65+
*These numbers represent the percentage of consumers that selected 6 or 7 on a scale
between 1 (“extremely unlikely”) to 7 (“very likely”).

Figure 3

Connection between CX and Trust

ALL INDUSTRIES
Correlation between Trust Versus Industry Average Based
CX and Trust on XMI Experience Ratings
Likely To
Trust 2019 XMI Ratings
Pearson compared with their
correlation = 30
industry averages 6.4
0.79 20
10 2019 XMI 2.1
Experience Bottom 4th 0.1
0 Ratings Quintile Quintile
-50 -40 -30 -20 -10 0 10 20
-10 2nd Top
-20
-30 Average likelihood to trust

-7.0 minus industry average of
-40
likelihood to trust
-50
BANKS
Distribution of Likelihood to Trust Likelihood to Trust
Banks Overall Average Low Rating Neutral Rating High Rating
67% 61%
26% 32% 77% 78% 85%

7% 7%
38%
21% 28% 15% 24% 12%
(1 - 3) (4 & 5) (6 & 7)
Do not trust Neutral Trust
Percentage Likely to Trust* across age groups:

67% 66% 71%
66% 63% 66% 66%
59% 59% 59% 61% 61%
18 - 24 25 - 34 35 - 44 45 - 54 55 - 64 65+
*These numbers represent the percentage of consumers that selected 6 or 7 on a scale
between 1 (“extremely unlikely”) to 7 (“very likely”).

Figure 4

Cost of Bad CX in the Banking Industry
Bad Experiences: Decreased or Stopped Spending:

Percentage of consumers who had a Percentage of consumers who
bad experience with a company in these decreased or stopped their
industries within the previous 6 months spending after the bad experience
TV/Internet Service Providers 17% 38%
Auto Dealers 10% 43%
Utilities 9% 21%
Airlines 9% 51%
Health Insurance 9% 21%
Wireless 8% 34%
Car Rental 8% 53%
Computers & Tablets 8% 52%
Fast Food 7% 67%
Parcel Services 7% 35%
Insurance 7% 40%
Retailers 7% 59%
Banks 6% 42%
TV & Appliances 5% 43%
Hotels 5% 53%
Credit Cards 5% 60%
Investment Firms 5% 48%
Groceries 4% 51%
Streaming Media 4% 38%
Software F irms 3% 41%
Percentage of bad experiences across age groups:

9% 9%
8% 8% 8%
7%
6% 6%
5% 5%
4%
3%
18 - 24 25 - 34 35 - 44 45 - 54 55 - 64 65+

Figure 5

Journeys That Matter in the Banking Industry
Journeys that Need Improvement: Journey NPS Versus

Percentage of consumers who Industry NPS
say that customer journey needs (point difference)
significant improvement
None of these need to be
significantly improved 54% -5
Finding a convenient branch

15% -2
location
Using online self-service 9% -4
Resolving customer service

9% 1
issues
Finding answers to basic
6% -24
questions
Parking 6% 12
Getting help in a branch 6% -28
Selecting an account that best

4% -2
meets your needs
Gaining access to account
3% -10
information
Reviewing statements 3% -48
Applying for a new account 3% -17
Receiving updates about a new

2% -4
application
Starting to use a new account 2% -20
Percentage of Consumers who Selected Top 6 Journeys as Problematic:

Across Age Groups (could select two journeys)
18 - 24 25 - 34 35 - 44 45 - 54 55 - 64 65+
Finding a convenient branch location 15% 22% 25% 24% 24% 26%
Using online self-service 16% 14% 15% 13% 12% 11%
Resolving customer service issues 10% 11% 14% 14% 15% 16%
Finding answers to basic questions 11% 8% 8% 9% 9% 8%
Parking 13% 8% 6% 10% 7% 9%
Getting help in a branch 5% 8% 8% 8% 10% 13%
Figure 6

Figure 7

CX in The Banking Industry

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INDUSTRY SNAPSHOT

Isabelle Zdatny, CCXP

Bruce Temkin, CCXP

UNDERSTANDING THE STATE OF CX IN THE BANKING INDUSTRY

Copyright © 2020 Qualtrics®. All rights reserved. Page 2

company by subtracting its percentage of detractors from its percentage of

BANKS DELIVER ABOVE AVERAGE CX

Copyright © 2020 Qualtrics®. All rights reserved. Page 3

PROPEL YOUR CUSTOMER EXPERIENCE TO THE NEXT LEVEL

Copyright © 2020 Qualtrics®. All rights reserved. Page 4

of CX improvements and gain a deeper understanding of their customers’ actual

Copyright © 2020 Qualtrics®. All rights reserved. Page 5

The State of CX in the Banking Industry

2019 XMI Customer Ratings: Changes in XMI Customer Ratings :

XMI Customer Ratings Across Age Groups:

Base: 10,000 U.S. consumers, 294 companies, 20 industries

Copyright © 2020 Qualtrics®. All rights reserved. Page 6

Connection between CX and Likelihood to Recommend

Percentage Likely to Recommend** across age groups:

67% 67% 66% 70% 70% 67% 68% 69% 73%

Base: 10,000 U.S. consumers, 294 companies, 20 industries

Copyright © 2020 Qualtrics®. All rights reserved. Page 7

Connection between CX and Rebuy

10 2019 XMI 2.3

-30 Average likelihood to rebuy

Percentage Likely to Rebuy* across age groups:

Base: 10,000 U.S. consumers, 294 companies, 20 industries

Copyright © 2020 Qualtrics®. All rights reserved. Page 8

Connection between CX and Trust

-30 Average likelihood to trust

26% 32% 77% 78% 85%

Percentage Likely to Trust* across age groups:

Base: 10,000 U.S. consumers, 294 companies, 20 industries

Copyright © 2020 Qualtrics®. All rights reserved. Page 9

Cost of Bad CX in the Banking Industry

Bad Experiences: Decreased or Stopped Spending:

Percentage of bad experiences across age groups:

Base: 10,000 U.S. consumers, 294 companies, 20 industries

Copyright © 2020 Qualtrics®. All rights reserved. Page 10

Journeys That Matter in the Banking Industry

Journeys that Need Improvement: Journey NPS Versus

Finding a convenient branch

Using online self-service 9% -4

Resolving customer service

Getting help in a branch 6% -28

Selecting an account that best

Reviewing statements 3% -48

Applying for a new account 3% -17

Receiving updates about a new

Starting to use a new account 2% -20

Percentage of Consumers who Selected Top 6 Journeys as Problematic:

Copyright © 2020 Qualtrics®. All rights reserved. Page 11

Copyright © 2020 Qualtrics®. All rights reserved. Page 12

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