Banks are getting the blame for doing a job they had no option but to accept. Banks were just as unprepared for a pandemic, but they have become the lightning rod for complaints in a broader system of inadequate relief.

Banks play an essential role in distributing relief funds to businesses, a service in higher demand, and more important than ever. Banks have teams working around the clock, answering phones, and developing software to process applications in record time. They also had to get their teams working safely, securely, remotely, and productively.

The banks are taking on risk by distributing loans, which in many cases, are unlikely to be repaid. Sadly, many businesses applying for relief funds will still fail, with further downstream impacts on their supply networks, employees, and customers.

A high rate of deferral and default should be expected, even as economic conditions improve. Despite the loans being government-backed, we must not be naïve in thinking that the recovery process will be easy or cheap. Approaching it without care will further erode customer relationships.

When talking to our clients, Capco hears that incoming complaints are at an all-time high. For a mid-size bank, the cost of resolving complaints easily surpasses $5 million annually. That number does not account for customers that leave and take their customer lifetime value with them. TWICE. Sixty-three percent  of small business owners choose the same bank they use for their personal accounts. When they leave, they will leave with both.

In retrospect, we all should have been better prepared for the pandemic, but that is the past. Now the banks can foresee the approaching wave of deferrals, defaults, and more real pain for their customers. Today, banks have a time-sensitive opportunity, below are some tips to help them design an optimized ‘Customer Loan Assistance Journey:’

• Proactively identify your high probability affected subset of customers using a data-driven design technique
• Research and engage customers in a design process using the methodology that works for you, e.g., Jobs to be Done, Design Thinking
• Map the journey, including the pain points, if the customer were to experience financial stress today
• Ideate and redesign that experience with trusted testing techniques
• Be realistic in what you can deliver in the timeframe. Size, prioritize, and sequence the new journey features. Be agile and listen to customer feedback in real-time
• Communicate with the market what you are doing - observe from your customer set how to communicate with them and amplify the conversations you are having
• Create brand champions of your customers and create a more effective and data-driven feedback loop. The old metrics no longer work, and at worst, may damage your efforts

Banks can differentiate themselves and lower the complaints leveled (unfairly) for being the essential medium in the market relief mechanism.

For more information, reach out to me at owen.priestley@capco.com to chat with our data-driven and journey map experts. We are creating these ‘Customer Loan Assistance Journeys’ for banks around the world.