With a dwindling Customer acquisition rate and a growing lack of confidence on the Financial Services industry in general, Retail Banks globally are not left with much choice but to focus back on boosting confidence in their existing customers and looking at Organic growth. And these can only be achieved by working on Customer advocacy as a key strategic focus. Enabling the creation of positive Customer Experience is a necessity for survival and growth for this Industry. Retail Banks globally which are the least impacted from the crisis have had the closest connections with their customer community and enabled the creation of the right experience for them.
Many surveys have proven that a positive Customer Experience improves the probability of the Customer to come back to the same Bank for the next purchase and reduces the probability of the customer to switch to competition. Moreover, a good customer experience benefits the stability and service brand promises of the Retail Bank.
If Customer Experience is the Mantra to succeed, then why is it so difficult to comprehend and implement? Simply because, Customer Experience is not in the control of the Bank. It is the experience of the Customer – something that is private and personal. However, Banks can influence this Experience to be positive by better understanding their customers’ needs & preferences individually and addressing those needs.
Personalization
Much of the Retail Banking infra-structure used till today has been developed on the Cookie-cutter model – “one offering for all” – with almost zero variance for customization to individual consumers. Fortunately, Retail Banking Industry is distancing itself from mass Banking to a more personalized form of Banking with the advancement in technology. The model has shifted from Service-Banking to varying shades of either Assisted-Banking or Self-service Banking. A primary driver for this shift has been the change in the consumer demographics. A large number of Baby Boomers (Age group: 52-62 years) are preparing to retire, while a larger number of Gen Y (Age group: 18-27 years) are entering the workforce. This shift in demographics from Digital-Adapters to Digital-Natives has had a profound effect on the Banking industry globally. Gen Y consumers are exposed to a large array of personalized service offerings, courtesy the Internet to a great extent, ranging from email, chat, social networking and streaming video. And all of this experience sets similar Personalization expectations in them from banking as well.
Today’s technology enables Banks to increasingly provide Personalization to their Customers. Banks need to be definitive in evaluating the personalization quotient of different products, platforms and tools before investing in them. From mass-offerings to personalized offerings is perhaps the singular critical success factor for Banks in the future.
Personalization can be continuously refined across multiple dimensions:
Channel convenience – how to make the access and service in each channel more personalized and consistent?
Best-fit choices – how to leverage analytics to provide the best-fit choices to help the customer at every decision juncture?
Intuitive User Interface – how to make the look and feel of every interaction channel more intuitive – You should recognize some channels (Branch, Internet, Mobile and Call Center) have the inherent ability to be more intuitive than others.
Analytics – Near real-time analytics and inference are the key to Personalization refinement. The more you analyze – Customer interactions, preferences, financial-needs etc. – the better you can leverage it to become more relevant to the Customer’s financial life. This builds up a virtuous cycle of trust and information sharing that can be further leveraged. Analytics tools have come a long way to help in this personalization process, but more advancement is still to happen in this area.
Service Excellence
While Personalization focuses on improving the Customer interaction every time, it cannot stand on its own till a Bank has a wide-array of Financial offerings (from which a customer’s sub-set of offerings can be personalized) and a great back-office operations.
In today’s competitive world, Banks need to acquire and build capability to add, modify or remove their customer offerings on the fly. Offerings should take cognizance of a variety of external factors (like competition offerings, macro economic conditions and policies, changing consumer needs & preferences) and a robust internal innovation factory that creates pioneering offerings continuously. The back-office factory (products and processes) has to continuously optimize and innovate to propel an aggressive personalization agenda. A trusted Technology and Operations partner can help in this journey.
Security
Not a day passes without some Financial Services Institution in some part of the globe being digitally attacked. Every attack maligns the Institution’s brand and value to its customers. A robust Information Security policy, a contemporary infra-structure and its flawless execution to tackle Security threats are key investments for Customer Experience enablement.
Organization culture
From the Bank or Financial Service Institution’s perspective, this is perhaps the biggest change that needs to be worked upon. A good part of the other three factors are based on Technology and its advancement. However, the Human factor overshadows both of these factors. Till such time the culture of the organization is not changed to be more sensitive to the needs and preferences of its customers, the other factors will have limited impact. Defining Customer experience as a strategic priority is a first step. An enterprise-wide CXO-level champion for the Customer Experience agenda is another must-have. A structured program to sensitize staff members continuously on Customer Experience enablement is vital.
Enablement of a positive and consistent Customer Experience can transform Banks and Financial Service Providers to being Trusted Advisors. Nowhere in history has this been more relevant and necessary than today – those Banks that embrace this opportunity will differentiate themselves from the others in attracting, retaining and growing their customer base and business substantially.
