Could a fractional CXO help your financial institution attract younger customers? Here’s what to know.

Regional and community financial institutions are increasingly losing younger customers to national competitors and upstart fintechs. But could delivering a knockout customer or member experience be the key to turning that decline into growth?

Keep reading to learn why more institutions are turning to a fractional chief experience officer (CXO) to deliver that experience, plus how CEOs can decide if hiring a fractional CXO makes sense.

Why should financial institutions prioritize customer or member experience?

The banking sector is more volatile and up for grabs than ever. Younger customers, especially, may be less likely to simply open an account with the same financial institution their parents have always used, with many choosing to explore large national institutions or newer fintech options instead.

However, community financial institutions that can outdo their larger rivals on customer experience have an opportunity to win those customers back. Millennials and Gen Z may expect 24/7 online banking options, but many members of those generations have also grown increasingly tired of all-digital experiences and want a stronger sense of community — exactly the sort of thing that fintechs simply can’t deliver.

But growing (and then holding onto) your younger customer base takes a deep understanding of your customer data as well as a folksy touch. That’s where a CXO can help.

Could a fractional CXO help your institution improve customer experience?

A chief experience officer or CXO helps your financial institution build stronger, more lasting relationships with your customers or members by delivering a more appealing experience that better serves their needs. But a CXO doesn’t need to be a full-time C-suite hire to be effective, which is why many institutions choose to bring in a part-time, fractional CXO instead.

Consider hiring a fractional CXO if your institution wants to:

• Deepen customer relationships and loyalty: A fractional CXO’s main job is to help ensure that your customers or members love banking with you, and to deepen those relationships so they last for many years.
• Unite data and customer experience: A good CXO understands both people and data and is able to draw on customer data to help strengthen customer experience.
• Find cross-selling opportunities: By helping you learn more about your customers, a fractional CXO can help you find new cross-selling opportunities or identify which of your offerings could be most valuable to a particular customer.
• Increase executive awareness of customer needs: As a C-suite-level executive, a fractional CXO can help the rest of your executive team to better understand customer needs from a data-driven perspective.
• Achieve stronger M&As: After an M&A, a fractional CXO can go into a newly acquired location and help implement your culture there.
• Upskill your team: A fractional CXO also improves your employee experience by coaching your existing team members on how to sharpen their people and/or data skills to the point where one of them can eventually step into the CXO role themselves.
• Access higher-level talent: Hiring fractionally gives your institution access to a bigger, deeper talent pool than may be available for a full-time hire in your specific area.

Action steps: How to start improving your customer experience with a fractional CXO

Here’s a practical action plan for how a fractional CXO could start improving your customer experience. Use this as a baseline when evaluating potential fractional CXO candidates or a new CXO hire.

1. Learn what your institution already knows about its customers

Meet with leaders and team members in customer-facing and support roles, review existing customer and employee data and get a clear sense of what your institution already knows about its customers. This helps you set an existing baseline.

2. Define your customer experience goals

Define the kind of ideal customer experience you want to deliver for your customers or members. What does that look like? You need to know if you want to achieve it.

3. Identify essential customer segments and journeys

Clarify your key customer or member groups and define what their journey looks like. This is an opportunity to consider how to deliver long-term value.

4. Create new channels to collect and analyze customer data

Developing new sources of customer data can involve a CRM or other modern analytics software, but it can also be simpler than that. For example, you can start by creating a Teams or Slack channel to post and discuss customer complaints, or by using a Forms survey to ask your tellers what kind of feedback they’re getting from customers.

You can use AI to analyze your results here and deliver suggested action items.

5. Find high-value improvement opportunities

Based on what you’ve already learned, identify opportunities to improve your customer experience. Prioritize those that are either high-impact or easy to implement.

For example, if a bunch of your customers are complaining about online banking problems, fixing those would be a major way to improve your overall customer experience.

6. Build a customer experience roadmap with accountable owners

Create a roadmap for implementing your experience improvement opportunities. Include measurable outcomes, as well as who owns each particular action item on the roadmap.

You should also consider additional ways to learn more about or better engage with your customers, which may include more integrated systems, a stronger data foundation or a shift towards a more proactive, financial-wellness-advisor approach.

Read more

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• How can financial institutions get more value from using AI?
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