CX quality declines in economic headwinds

Photo by Ron Lach

Forrester’s 2023 Singapore Banking Customer Experience Index (CX Index™) reveals an overall decline in CX quality amongst multichannel banks, resulting in mixed results and a reshuffle of the rankings.

According to this year’s CX Index rankings, Citibank and DBS Bank improved their CX scores; Standard Chartered, OCBC Bank, and United Overseas Bank (UOB) saw their scores decline; and HSBC appeared on the CX Index for the first time. Citibank regained the lead in the CX Index rankings after improving its CX performance by investing heavily in a voice-of-the-customer program to infuse customer feedback into its service design, employee training, and targeted CX improvements.

Sharp rises in inflation and living costs are making it harder for Singaporean banks to deliver quality CX that meets the needs and expectations of their customers and earn their loyalty. In addition, the banking industry suffers from a lack of differentiation, with just a 5.7-point (on a 100-point scale) gap separating the leader and the last-placed bank, indicating that the state of CX in Singapore’s banking sector has reached a stalemate, with customers rating it as “poor” or just “OK.”

Finally, the quality of physical CX (58.5 points) was rated the lowest, compared to digital-only CX (61.0 points) and hybrid CX (63.1 points).

“There is a common misconception in banking that customers universally prefer digital experiences and are ready to abandon physical channels,” said Dane Anderson, SVP of international research and product at Forrester.

“While investing in digital experiences was a necessity during COVID-19, by overpivoting to focus on digital channels, banks in Singapore risk losing service capacity and neglecting the service quality in physical channels like call centers and branches. This may result in disappointment and frustration, the two emotions that harm customer loyalty the most.”

Forrester’s CX Index surveys show that how an experience makes customers feel has a bigger influence on their loyalty to a brand than the effectiveness or ease of those experiences.

Among customers of Singapore’s banking industry who felt happy and valued, 79% and 76%, respectively, say they will stay with their bank; 72% and 71% will pay more for products; and 67% and 69% will advocate for the brand.