Monika Hruba: Why Financial Literacy is the Key to Customer Retention

Monika Hruba: Why Financial Literacy is the Key to Customer Retention

Monika Hruba: Why Financial Literacy is the Key to Customer Retention

Episode 83

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Episode 83

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Monika Hruba, Chief Financial Health and CX Officer at Česká spořitelna, dives into the customer experience strategy behind the Czech Republic’s largest bank. Monika explains how they utilise financial literacy and customer education initiatives to improve satisfaction and retention rates, as part of a wider customer-centric focus.

Episode Summary

The Employee

Four years ago, the Czech Republic’s biggest bank began a large-scale transformation that refocused their CX strategy to a more customer-centric approach. The world is rapidly changing, and Česká spořitelna decided that financial institutions must also be able to adapt to the speed of customer needs. But sometimes, positive change is held back by systems of the past. So to achieve this evolution, the bank created an internal customer experience academy, training professionals to implement a strategic CX approach across all areas of the organisation, rather than having one core team. Their methods have enabled a new era of customer centricity, which now permeates through every branch.

The Customer

Česká also has a sharp focus on financial literacy and educating their customers to spend and save more wisely. As Monika explains, the bank has been a helping hand to underprivileged and struggling customers since their inception, and that attitude has now led to providing support for customers affected by both the economic and Ukrainian crises. Their financial management schemes and initiatives aim to increase customer understanding and ability, building up such skills to last a lifetime.

To discover more and learn how financial literacy and customer education can be used to transform customer experiences, check out our full episode with Monika – available on all your favourite channels.

This article summarises podcast episode 83 “Why Financial Literacy is the Key to Customer Retention” recorded by CX Insider. For more information, listen to the episode, or contact Monika on her LinkedIn profile.

Written by Marcell Debreceni

Full Episode Transcript

Marcell: Hey everyone, welcome back to CX Insider. Today we talk to Monika Hruba, Chief Financial Health and customer experience officer at Ceska sporitelna, the Czech Republic’s largest bank. In this episode, we explore the value of investing in the financial literacy of your customers, as well as the literacy of your employees across the organization. So enjoy the episode and if you do, why not subscribe to our YouTube channel for access to the best content that CX Insider has to offer? By the way, this podcast is brought to you by ACF Technologies, Global Leaders in Customer Experience Management Solutions.

Valentina: Thank you, Monika, for coming to today’s recording, and we usually start with a brief introduction. So would you like to introduce yourself? Tell us who you are, what you do, and something about your career journey.

Monika: So thank you for inviting me. As you said, I am Monika Hruba. I’m coming from Czech Republic, from Prague. Actually. I have academic background, from psychology and media studies, and then all the rest of my career I was understanding or analyzing people’s behaviour or people’s perception, how the brand’s influencing the life. And at the moment I’m working as a chief financial health and customer experience officer in what is the largest bank in Czech Republic and part of ERSTE group.

Valentina: Cool. So today’s episode is going to be all about transformation. And during our initial call several weeks ago, we were kind of going through the whole transformation that started happening several years ago. So let’s start from that and let’s start from how did you decide that this kind of organizational change was needed, that the bank and the company had to shift towards more customer centric focus?

Monika: It’s actually started, I think, like three and one half years, almost four years ago, when we decided that the life is changing very fast. The banks were perceived more as stable institutions, which doesn’t follow the changes very, very fast. And I think like we were thinking how much we would like to be relevant for current world, how much we would like to reflect the current needs of our customers.

Monika: And our management at the time relatively nicely decided that we will go the customer centric way, which will actually enable us to care more about customer needs, but also from the perspective of organisation as a bank, be able to react faster to these needs. Because sometimes, especially in the banks, when you want to change something, you have the systems which are transferring the money back and forth. There are many things which are hard to change, and even though you have motivation to do something for the customers, you are locked in the system. So this was the main change and the time we have decided to change completely the structure of the organization and actually build it according all these agile structures. So we have decided that we would like to create the teams which are designed around customer needs. For example, if you can imagine it as the need of living, then this is one need. Then we have the teams which are caring about particular needs on this journey, or there is a specific topic of daily banking. So many things which are happening daily, you know, transferring the money, sending the money abroad, sending the money between Czech Republic. Those are the topics which are looked after by the teams. And it means from the customer experience perspective, also a significant change because typically in the organizations you have one research department or maybe customer experience department, which is sitting somewhere separately and maybe influencing the other employees like how to do it, like what should be improved and what not.

Monika: In our case, the customer experience. People are sitting directly in the teams along the customer journey and are able to influence directly this particular part. So this is, I think from my perspective, the strongest change because like you are very much close to the particular topic and the person which is caring about this particular need is, is actually able to receive, monitor influence the decision at this particular point. So like solving the customer pain points, maybe highlighting or promoting the gain points which are there, This is their daily task. And at the moment we have around 220 of those people sitting in particular pieces of the banks and looking after customer needs.

Valentina: So actually you had to educate all your employees on this new change and came up with like different metrics of, you know, how, how do you measure the success and performance of these people? How did you educate all these all people? You’re the largest bank in the country. How did you do this?

Monika: Yeah, you’re right. It was a pretty hard task to do. And we were sitting at the beginning, you know, like counting what we have at in place, what we can utilize and what has to be done. There is no specific school for customer experience. So we have to decide like how we will tackle that. And we decided that those people who are who came to fulfill those positions were mainly people from the bank looking after some kind of customer need in the different format. So many of those people were frontline employees or people responsible for like developing the product. And the model at the time was actually more hiring people for their attitude rather than the skill. So we were choosing people who really have the passion to change things, have some ideas how to do that, and maybe they’re locked in the previous position as not having the all means for change. So attitude was the priority. And then we have decided to build something we called internally Customer Experience Academy. So it’s internal program for those people caring about their development. And we have set up because you cannot like teach everything. We have decided that there are certain competencies these people should have starting, for example, from a mapping customer journey, being able to do a primary search or with the data and prepare the data based on different sources. So something we call secondary research. We have a basics of UX. Then there is a skill called small communication. So it’s like actually building the ability to write and being able to formulate communication for the customer. So it’s like you is writing and we have a courses and a kind of like metrics evaluating where people are at the moment, what they can do for improving their skills. And then we are measuring how far we have moved in the certain skill over time.

Valentina: And so from the initial idea that you had or your team had or your colleagues of like changing driving this change within the company from this point in the in time to when the company actually became very focused and everyone was, you know, has done these courses in the academy, how long did it take? Are we talking about months or years?

Monika: You know, like it’s a never ending process. But, you know, setting up the academy, this was the task for the first year. So we have set up the academy. We have evaluated the skills at that particular moment. And then we are developing skills like one by one. We have even like priorities for particular year because there are some skills which are needed more and we can help us to do the larger steps forward. And of course there are some changing in people. Some people are leaving, some people are coming. So you have to care about those people coming over the time. And for example, tomorrow I have the course of the six basic when we are teaching how to meet customer journeys and these tomorrow and it’s full of new people. So we have like 24 new people coming to the bank over the time. So I think it’s it’s a continual development, but I think like setting up the basic structure was done plus minus within a year.

Marcell: Ceska doesn’t have a dedicated team of individuals. Instead they have multiple professionals within every branch of the organization, creating a wider culture of customer centric service that permeates through each layer of the bank. What’s the benefit of this strategy?

Monika: The benefit is actually being closer to the customer for this particular task. So you are very relevant. You’re very deep into the topic and then we can actually place those people in all priority initiatives and actually even like transfer them if there is like higher need of six people for particular need because there is something like being developed or underperforming or we would like to transfer the knowledge from one place to another. So it’s relatively flexible. What is the downsides of that? It’s actually because this network is like distributed across the company. You have to keep certain guidances or like rules how we are working not to like have a totally unconnected world. So it’s my task. We have a system of doing all the six people which are into so called chapters within like 1015 people together when they have a senior customer journey expert looking after the work and actually helping them supervising what they need and consulting the first things. And then there is a role of really for the customer experience. And that’s my role and it’s actually coordinating all the customer journey experts, all the chapters, getting feedbacks from their side, like what they need to be like, what they have to learn, but also like maybe like focusing them on the topics which are extremely important from the overall perspective. So my task is actually looking at overall and looking at the drivers within the company and navigating and setting the priorities in the areas where the improvement can help us the most.

Alex: You mentioned the customer pain points and that you pinpoint some, let’s say, topics or themes that you focus on. What exactly drives you to those pain points? How do you define them and how do you prioritize them?

Monika: Yeah, it’s my favorite topic. Thank you, Alex. You know, like in a bank we have I think it’s a great segment because we have many data from the customers, like when you can start from the research data, just analyzing the customer perception, how they evaluate our bank, what they like about it and what they don’t like. That’s one source of the declared declare data. We have many data from the real interaction, so we can see like where people are stuck, for example, or why they are calling to our call center because like they probably need some information or something is not working properly. We have also the continual data collection, getting the customer feedback and analyzing what is there. Then we do the prioritization, which is typically done on two axes. Like it’s the first one is actually how many customers feel that particular pain points or how many customers, I don’t know, didn’t really see something or is working in an environment which is like too slow for them. And then this is the intensity of the problem. So how striking a problem it is because in some cases it might be that it’s a relatively large reach of the problem. It’s relevant for hundreds of people, but the intensity is extremely high. It means, for example, that they cannot access something what they really need. So we are evaluating those pain points on those two axes. And basically and I think this is how the customer experience work overall is that the things which are done by many customers very often are the most important for their experience. So we are trying to focus on those and like smooth, brilliant experience across all these activities. And then of course tailoring the ones which are then prioritized from this overall collection of pain points.

Marcell: Banks deal with the issues that customers have relating to their savings, mortgages, spending and so on. And these issues come directly from the customer’s own management of their finances. Therefore, striving to improve the financial literacy of your customers can not only boost operational efficiency, but also add value to the customer’s life by educating them on how to handle their money in the best ways possible. How does Ceska sporitelna achieve this?

Monika: It’s a relatively huge topic, especially for us because like focusing on customer experience and customer search, we also discuss our role in nowadays work and like originally just started as a bank for underprivileged customers. So this was the reason why we started. We were the first bank which actually provide people with the passes they can send and save money. And this happened actually 200 years before when the situation was actually totally different. But there was also this movement to help people to do better with their finances. And nowadays where I feel like we are living in a totally different situation, we have all these modern technological tools, but still people have limited capacity, you know, to understand in depth how the financial things works. And I feel like we are also thinking that this is probably not changing. The purpose from the beginning is just changing the environment. So we wanted to adapt it for a current work and then the financial health is our key topic. We would like to give people and export for the future. So it’s like our key proposition at the moment and what we are doing is looking at people’s finances and working with segmentation, like looking at people, how they are dealing with the daily money, how they are saving for the future, how they are managing their debts, whether they work with the reserve at the moment, especially now like with this high inflation and economic crisis which is which is happening right now, we know that the topic is extremely important for people’s life and it’s crucial to like to help.

Monika: So there are several activities we are doing and just to mention some of them, we are starting from the younger people because we think that there is like certain age when you can really be prepared and even though you don’t have your own money, you can build the basics. So one of the large activities we are focusing on is educating children in schools. So we have the program called Happiness, which provides the education to schools, and there is already like a large number of kids which went through this program. And we would like to continue further and even like build it into the larger extent. And for the customers, which are already like having their income, we are looking at their customer health. So we have a system of six financial health indicators evaluating or providing the navigation for customers on that so we can provide them with the scores and just look at the areas when they can do better. So in a not pushy, like quite empathetic way we can provide them navigation which is done through advisory meetings. We have even like started now the remote advisory so that the customers which are living in the areas more remote without necessity to visit bank can access the advisory online and we are launching for each particular indicator the activities which can improve the health.

Monika: So for example, if we look at the daily, the daily finances and managing the income and expenses, there is a certain number of people who probably don’t have enough money to like to have balanced expenditures. And I think in this area we even went outside of the typical banking scope. So we are working on additional resources to the daily budgeting. So for example, one of the things we did recently was like providing a saving on the groceries if people are using the card so you can access some extra money for purchasing with our card on our case, it was like quite complicated to push these activities through all the system because banks are limited in the things they can do. But we feel that it’s important because if you want to improve people’s money or financial health, then sometimes it’s more about also the outside things. So it’s like more about the educating people, showing them the ways how they can get some additional resources. And then also, of course, working on the banking product because you can choose the banking product, but sometimes you can choose a product which is not fitting, fulfilling the actual needs. And I think like providing the help and pointing out the products which are more suitable or maybe more fulfilling, the need that the customer has is also a nice help. So that’s pretty much how this works.

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Alex: How does this focus on financial literacy add value to the customer and how does it improve their lives? And also another important question that I have is how do you measure that success that is taking place for financial literacy at schools?

Monika: We have some kind of like testing before and after so we can see like what the impact it has. And it’s slightly easier for the customers within the bank. We have some measurement at the beginning, like in those financial indicators, so we can see the status and we can also measure the status after the certain activities. But there is a fundamental topic or issue to be solved. And this is like the understanding, understanding and maybe self evaluation, because some people like looking at the data, can perceive that it’s not so bad, or maybe it’s even better than it might be. Some people don’t like even like to like being compared or analyzed. So in this case, we did some testing and just trying to understand like how people evaluate themselves compared to our data, like sometimes is done by the differences in the in families because like especially in Czech Republic, people are working as a household. We have measured the individuals. So in some cases people and this is probably the things which have to be done and explained even more is that they perceive that they are financially healthy. Just because me as a wife, I am supported by my husband. But this doesn’t mean that me as a wife, I’m fully in like prepared for a financial future.

Monika: So we are trying to explain people that the financial health is really focused on the individual financial health because there is many things which can happen over the time in the in the life and is perfect if if the exact and every person is prepared for for being financially healthy. So that’s one point. The second one is actually very much about the perception and especially people who are used to live with lower means, like lower salaries are the ones which are able to survive more. So for example, they even though they don’t have much money, they, from our point of view, are perceived as they may be vulnerable. They know that they can even save some money more or they can like borrow or they are living in a community. So that’s the context which actually influence your perception of being financially healthy or not. On the other hand, people who from the data perspective have the money but probably have also high mortgage. You know, the kids are in the schools which are paid. That’s another perspective when you maybe look from the data perspective as relatively financially healthy, but because of all the plans and the relatively expensive. Living. The people doesn’t perceive them as a healthy and they have much, much higher fears about their life, especially now when we look at the data at the moment and we see that like the inflation and high energy prices are going to influence much more people than normally the inflation or cost.

Monika: For the first time, actually, the impact of the high prices is influencing the middle group, which was not so much like in the past, experienced the financial troubles or any savings. So for them, this is maybe for the first time they are going to cut on the expensive or maybe cut on the things they like a lot. This, of course, influence also the perception of their life and living standards and everything. So it’s very nice and like analyzing the data in the context of like normal, normal life, because it’s not only the data we see, but also the context, because some people who are poor can be like more eager to survive, the people who live in the better situation. But their living standards and the things that they like are set up totally differently. And this is a discrepancy between the perception and reality. It’s an important point which we have to address in the advisory as well. To be relevant. I’d also like to be successful in delivering the activities for the future.

Marcell: Monica has mentioned the focus her bank places on helping underprivileged customers, but this is something that resonates beyond mere financial help. Are there any other ways in which Ceska sporitelna provides aid and support and what advantages do they bring?

Monika: And during the COVID we have to do something like more than just looking after people’s money. So we were helping also our elderly customers to get to the registration of like for vaccination because the system provided by the government was quite complicated. So we decided that we will do the initiative which actually address them and the customers who wanted their registered and actually help to through the whole system so that they can get their vaccine on time. So this was one thing. Also recently with the war in Ukraine, we decided that we will create a huge activity around that. And then like many people from many different areas in the bank, as I said, like we have the customer experience sitting, for example, in the squad dealing with payments, there are guys who are doing the accounts. So all those people actually created a network of the volunteers working on the Ukraine project and we created really huge activities starting from the special conditions for payment, special accounts, then donation to the customer to all the banking areas, up to the, for example, initiative, which decided that we will turn one of our training centre into the refugee hostel where people can actually stay and the employees can help in any form. They just feel it’s helping. So they are providing the order bed sheets and preparing the place for them.

Monika: So in a nutshell, this was the activity which will actually help to the Ukraine a lot. One activity like many things together, I cannot even like mention all of them, but donation was something we have also prepared a really nice commercial which connected our past with the Ukrainian situation at the moment. And this generates really like a huge push in a society to donate money for the cause. And there was recently a customer experience contest where we won a first prize for this summary of the Ukrainian activities. So like the field and area then we can help is really huge. I think it’s really like a revenue can influence people’s lives and the finances are actually kind of like lifestyle topic which influences things from the beginning to the end. And it’s actually more about the organization where the focus can be for us is actually the financial health. And actually we are trying to look for all our customers, regardless of their age and regardless even of their situation because they’re Ukrainian customers. Some of them stay with us. Some of them were customers which are just transferred or moved from Czech Republic to another country or stay there forever. But I think like for a certain period of their time, we help them and like the finance plus something on top of it.

Marcell: From our conversation, it’s become clear that Ceska sporitelna is a highly customer centric bank, and they’re deeply involved with providing excellent customer service by going above and beyond customer expectations. But the world of CX is constantly changing. What predictions does Monika have for how customer experience will evolve in the near future, and what can you look out for to grow with the curve?

Monika: It’s very much like being present in people’s life in a way which is not like hard and very much demanding. So like being a light partner or advisor. On the background or with a tiny stimulation or nudging for better financial habits, just to be more exact. What I’m saying? Like in the past, it was like mostly that you visit the bank once, twice a year when you just decided to do something really big, like purchasing a house or borrowing some money for a car or some something else. But I feel like this is this was the past and in the future is more like providing a small nudging, small step, small steps where people’s life can be easier just because, you know, like changing small, tiny habits. And I think this is more about this identification of those small moments in people’s lives, which can have a crucial or less crucial impact. So with all these technologies and having data in or using mobile banking, this is the tool where I think it can be done in a way which is not this disturbing that can help you, for example, to save some money after a salary day or like being in advance when you are paying some, I don’t know, mortgage or utilizing some tools which maybe can help for this particular element to make it smooth. So it’s more like bringing the engagement element into the finance and being bringing the clever nudging along the side in a smaller portion than before, like one once in a time visit of the bank when they can be done everything. So I think the small nudging is the way forward, is also utilizing and looking more at the transactional and behavioral data, because it’s the technology is where people spend most of their time.

Monika: We can see like what they are really needing. Like if, if I’m checking my account balance, I don’t know, ten times a day, probably this is the most important and we should like maybe make the way to the account balance smoother so it can be a widget on your mobile screen. Actually, it gives us opportunity to be much more relevant and I think like being a researcher by nature also gives us really nice research data which we don’t have to ask the customer explicitly. So like instead of asking for are you satisfied with us? How long or how many times did you visit the bank? The app? You can look at the data and just understand it from that. There is like many things which are happening now in the area of doing all the text analysis and everything. And again, like this is a huge material which can be utilized for customer benefit and saving the time and money for the old fashioned were asking them like what you don’t like because like if people are writing your emails or the post on in the app or on social media, this is actually the comments the customer already have. So like if you are clever in utilizing those like feedbacks, then it’s I think it’s much smarter way of getting the customer feedback, understanding and analyzing and answering back. So I think text analysis is also my favorite topic and something we would like to use even more.

Marcell: Thank you for listening. We hope you enjoyed the episode. If you did, why not subscribe to our YouTube channel for access to full length videos, clips of chapters, and also YouTube shorts for our best moments. If you want to join our growing community of thought leaders, head over to LinkedIn and follow us at CX Insider Podcast. Stay updated. Thanks again and I’ll see you in two weeks. But for now, enjoy our rapid fire questions. By the way, this podcast has been brought to you by ACF Technologies Global Leaders in Customer Experience Management Solutions.

Valentina: So the first question is, as a CX officer leading transformative change across the company, what is the most challenging part of your job?

Monika: Well, I think it’s like is the space which is like unlimited. So like just finding the priorities and maybe limit the space for yourself to be satisfied that at the end you did what you really wanted.

Valentina: Do you have any goals for 2023?

Monika: Yes. It’s mainly related to financial health, improving financial health of our customers. That’s it.

Valentina: Do you prefer working from home or in the office?

Monika: I love the mixture and I’m really grateful that we can do that.

Valentina: If we go to Prague, what is the one place thing or activity we can’t miss?

Monika: I think the ride with tram 22 because in a comfortable way, with a touch of people, you can visit all our highlights.

Valentina: Okay, cool. I’ll note that.