Customer Experience Index (CEI): Rating CX in Kyrgyzstan’s Banks 2023 

Customer Experience Index (CEI): Rating CX in  Kyrgyzstan’s Banks 2023 
03/12/24
03/12/24
views 46284
comments0
Author:Alexey Veretenov
Source: PLUSworld

In this article, Alexey Veretenov, Managing Partner of Senteo Inc., analyzes the current state and future prospects of banking in the Kyrgyz Republic. 

In our prior publication, we explored the Customer Experience Index (CEI) for 2023 within the broader context of Central Asia. In this article, we take a deeper look at the CEI findings specifically for the banking sector in Kyrgyzstan during the same period. 

The global trend towards digitalizing banks has led to a transformation in core banking services, now accessible through smartphone apps, facilitating direct customer interaction with bank technology. When it comes to online banking, it is imperative for banks to monitor and enhance the perceived customer experience of their services, and to ensure continuous improvement. 

The Customer Experience Index Structure 

Senteo introduced its proprietary methodology for calculating the Customer Experience Index (CEI) in 2007. This index evaluates customer experience based on five critical components: brand, communications, environment, offering, and culture. For further details into our research methodology, kindly visit our dedicated research page

Senteo conducts an in-depth analysis of the Customer Experience Index (CEI) by assigning a specific index value to each bank. This evaluation entails examining the dynamics of customer experience across different branches within the same financial institution. Effectively managing customer experience holds the promise of enhancing the bank’s revenue per customer and substantially impacting the Customer’s Lifetime Value (CLV) by encouraging the adoption of a wider array of products and services. Conversely, a negative customer experience not only diminishes a bank’s profits but also leaves it vulnerable to reputational risks. 

CEI scores consistently demonstrate a correlation with sales performance, revenue generation, and customer loyalty. For instance, banks with higher CEI scores typically excel in customer acquisition and cross-selling, enabling them to command a price premium averaging 60% higher than their competitors. Moreover, they nurture stronger customer relationships, resulting in reduced customer churn and enhanced overall performance.

Global Banking Insights 

For 17 years, Senteo has been at the forefront of applying its CEI calculation methodology across 10 different countries worldwide. Our studies of banking systems in Armenia, Tajikistan, and Kazakhstan have revealed that only a select few banks have managed to attain a CEI score of 3 or higher, with a volatility index fluctuating within the range of 1.5-2.0 points. 

A CEI score of 3 represents the minimum level expected in developed markets and is the anticipated standard for actively developing countries. However, best practices on a global scale typically align with CEI values surpassing 4.50 points, with Russian banks averaging around 4.0 points. Notably, the CEI index remains a pivotal key performance indicator (KPI) for top managers across numerous Russian banks to this day. 

Research Methodology 

Senteo employs a systematic approach to selecting banks for surveying, as well as determining which branches to visit. Our team then deploys trained mystery shoppers, who have undergone rigorous certification through Senteo’s training program, to each selected branch. The use of standardized score cards ensures consistency and minimizes research biases. The entire customer journey, from entering the bank branch to interacting with employees and finally leaving the branch, is thoroughly evaluated (see Figure 1). 

Example of the Customer Journey in a Bank Branch 

Example of a Customer Journey in a bank branch
Fig. 1

Each step is rated on an emotional scale spanning from frustration to delight. Subsequently, the indicators are compiled, analyzed, and cross-checked to ensure accuracy and reliability before establishing a final rating. In instances where discrepancies arise, we conduct repeat visits to ensure thoroughness and precision.

Results of the 2023 CEI Survey in Kyrgyzstan’s Banking Sector 

In 2023, Kyrgyzstan boasted 23 operational commercial banks. Throughout the year, Senteo experts assessed the CEI of the majority of the banking sector, encompassing 21 banks. This research spanned across the 1st, 3rd, and 4th quarters, as well as the entirety of the year. The comparative findings of the study are succinctly summarized in Table 1 below.

CEI Assessment: Kyrgyzstan Banks in 2023 Quarter-by-Quarter  

Tab. 1

In Q1 2023, the average CEI stood at 2.43 points on a 5-point scale. Throughout the year, the index experienced fluctuations, starting with a decline to 2.20 points, followed by a subsequent rise to a peak of 2.60 points by the end of the year. These dynamic shifts hint at ongoing developments in customer experience management within Kyrgyzstan’s banking sector. Additionally, the volatility index, initially high at 2.05 points at the beginning of the year, steadily improved, declining to 1.65 points by the 4th quarter of 2023. 

The cornerstone of the CEI Index, significantly impacting the bottom line, is the offering itself—comprising the product and its packaging. However, banking customers do not perceive the current offerings as particularly valuable to them. The diminishing value of this component, from 2.26 in Q1 2023 to 2.31 in Q4 2023, mirrors the reduced prevalence of non-cash transactions in Kyrgyzstan compared to other CIS countries and developed nations, where cash constitutes 10-20% of the money supply turnover. 

Overall, there is a gradual increase in customer trust in online products as they become more familiar with their benefits. Conversely, the Environment component boasts the highest index value, indicating that customers generally find the touch points clear and comfortable. 

However, in 2023, the CEI in Kyrgyzstan stood at 2.40 points, significantly falling below the minimum threshold of 3.0 points. This underscores that the transition towards customer-centricity is still ongoing, requiring further efforts from every bank in the country. 

As per the survey results, the top 5 banks with the highest Customer Experience Index (CEI) ratings by the end of 2023 were Optima Bank, FINCA Bank, KICB, Kyrgyz-Swiss Bank, and DosCredoBank (refer to Table 2).

The 2023 CEI and Volatility of Banks in Kyrgyzstan 

Tab. 2

To gauge the consistency of customer experiences across a bank’s branches, Senteo examines the volatility score, where lower scores denote greater consistency. A low volatility score suggests that customers encounter consistent customer experiences across visits to different branches. Typically, an average volatility score that prevents customer frustration or unrealistic expectations is 1.00, while international best practices aim for less than 0.50. 

In 2023, Kyrgyzstan’s overall volatility stood at 1.83 points, revealing inconsistencies in customer experiences across visits to different branches at various times. However, there was a noticeable consistent decline in this indicator over the course of the year. 

An interesting observation is that Kyrgyz-Swiss Bank attained a CEI volatility score of 1.02 points, aligning closely with the normal average value. This suggests that customers of Kyrgyz-Swiss Bank encounter more uniform experiences when visiting different branches across the country.

2023 Kyrgyzstan’s Banking System Breakthroughs: Top 5 Banks Advancing in the Ratings

Several financial institutions in Kyrgyzstan have shown notable positive trends in customer perceptions, resulting in substantial improvements in their ratings by 3-5 positions. RSK Bank notably increased its CEI score by 0.54 points during the analyzed period, securing a 5-position advancement in the ratings. Similarly, Aiyl Bank enhanced its score by 0.39 points, climbing 4 positions in the ratings. 

Despite the progress made by banks in Kyrgyzstan in 2023, the average CEI score has yet to reach 3.0 points. However, if banks in the country continue to prioritize customer experience management, they are expected to achieve higher profitability in 2024. 

Retail vs. Corporate Segment 

Senteo’s CEI study of banks in Kyrgyzstan compared the experiences of both retail and corporate (SME) customers. The results of the comparison are detailed in Tables 3 and 4 below. 

Retail Banking CEI in Kyrgyzstan for 2023 

Tab. 3

Corporate Banking CEI in Kyrgyzstan for 2023

Tab. 4

In Kyrgyzstan’s banking sector, the CEI value holds steady across both corporate and retail segments, maintaining an overall average of 2.40 points. This signifies promising potential for growth in both sectors, with opportunities arising from the introduction of new offerings, technologies, and enhanced service levels. Interestingly, there is a lower level of volatility (1.61 vs. 1.88) for corporate customers, indicating a more consistent service within the segment. 

Examining Customer Experience Dynamics 

Reflecting the outcomes of the 2023 survey, the average CEI rating in Kyrgyzstan stood at 2.40 points, indicating a relatively modest score that falls below the minimum threshold of 3.00 required for transitioning to a customer-centric model. 

Surprisingly, the most successful banks were identified as medium-sized institutions, while certain larger banks struggled to deliver a satisfactory customer experience. This highlights the importance of strategic resource allocation and embracing the appropriate approach to customer-centricity, emphasizing effectiveness over sheer scale. 

The overall volatility score in Kyrgyzstan registered 1.83, notably above average, indicating inconsistent customer experiences across visits at different times. The decline (i.e., improvement) observed in the score from the beginning to the end of 2023 emphasizes the crucial need for stabilizing customer experiences within the country’s banking sector. Concurrently, the increase in the CEI rating signals a positive trend in the evolution of physical banking services in Kyrgyzstan. 

Notably, the Offering component emerged as the weakest aspect of the index, scoring 2.14. This highlights a deficiency in structured offerings tailored to meet customers’ life needs, pointing at an area that requires substantial improvement. 

In 2023, several banks made significant strides in customer experience management, resulting in a notable increase in the CEI across all components. If this upward trend persists, proactive banks have the opportunity to significantly enhance their financial performance and improve profitability rankings in 2024. 

Furthermore, banks in Kyrgyzstan are demonstrating readiness to develop both the retail and corporate sectors by introducing new offers, technologies, and elevated service levels. 

The practice of accounting for CEI dynamics in companies’ development decisions confirms that those consistently and systematically prioritizing customer experience enhancement, improving customer interactions, and striving to help their customers achieve their desired outcomes more effectively, are rewarded with increased customer attraction, engagement, loyalty, and a stronger predisposition for long-term relationships. 

In conclusion, the detailed analysis of Senteo’s survey results provides insights for banks in Kyrgyzstan to identify priority areas for development, paving the way for sustained growth throughout 2024. By leveraging these findings and strategically focusing on enhancing customer experiences, banks can position themselves for success in the competitive landscape while fostering long-term relationships with their clientele.

03/12/24

Leave a Reply

Popular content
Emerging as a compelling alternative to traditional banking, neobanks place a strong emphasis on providing swift banking services, responsive customer support, fair fee structures, and user-friendly financial products.
The key goal of lifecycle management is to maximize the customer's lifespan with the bank, integrate them into everyday banking services, and increase product penetration, which will enable solving the customer's problems in the long term. In this article, we will discuss the details and practical examples that banks can use in their customer lifecycle management.
In this article, we will analyze a new category of processes designed to cultivate customer relationships. These processes seamlessly integrate into sales and service operations, forming a unified approach that facilitates smooth transitions between products throughout the length of the customer's interaction with the bank.
Voice On Demand Retail Podcast: Part 3 – Leadership in the Retail Market
Michael Ruckman talks about Customer Experiences & Customer Journeys, The three faces of Digital for Retailers and the state of leadership in the retail market today.
Voice On Demand Retail Podcast: Part 2 – The three faces of Digital for Retailers
Michael Ruckman talks about Customer Experiences & Customer Journeys, The three faces of Digital for Retailers and the state of leadership in the retail market today.
Voice On Demand Retail Podcast: Part 1 – Customer Experience & Journeys
Michael Ruckman talks about Customer Experiences & Customer Journeys, The three faces of Digital for Retailers and the state of leadership in the retail market today.
Senteo Rating
The Fifth Discipline: The Art & Practice of The Learning Organization
Senteo Rating
Work Rules!: Insights from Inside Google That Will Transform How You Live and Lead
Senteo Rating
Thinking, Fast and Slow
What is Relationship-Centricity?
This short video explains what relationship-centricity is and how it is different from customer-centricity. Follow the link to see how companies can extract value from their relationships with
How to Build a Business That Lasts 100 Years
Join strategist Martin Reeves as he explains how executives can apply six principles from living organisms to build resilient businesses that flourish in the face of change.
Explanation of What UX, CX and LX is and the Difference Between CEM & CXO
This quick 5-minute video explains the difference between User Experience, Customer Experience and Life Experience, provides examples of each and explains the difference between CEM and CXO.
Last News
On May 28, Ksenia Konstantinova, Senteo's Director for Central Asia and the Middle East, spoke at an international conference at the Management Development Institute on Singapore in Tashkent (MDIS Tashkent).
The main results, excerpts and conclusions in the presentation format on the results of the three-year research of the Customer Experience Index (CEI) in the banking sector of Uzbekistan and other Central Asian countries conducted by Senteo in collaboration with the Marketing Association of Uzbekistan.
Alexey Veretenov, Managing Partner of Senteo Inc., sheds light on the transformative role of the CEI in Azerbaijan’s banking sector in 2023.