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Mark Riddle Oct 20, 2017

The heart of customer centricity

Talk of “customer centricity” is everywhere in the financial services realm. And to foster the next generation of it, banks will need to more effectively work in these three areas:

  • leverage their customer data to provide more personalized offers
  • tweak their talent management strategies to better serve customers, digitally and in person, and
  • potentially work with outside partners to tackle “pain points” that could be frustrating their efforts to address customer needs.

One can argue that organizations have always strived to put customers at the heart of their business decisions. But we’re really seeing this strategy come to the fore—primarily because consumers demand it.

Banks are listening, as seen in the results from BAI’s Banking Outlook survey. In their quest to become more customer-centric, banks are advancing their technology, and the top investment for retail banking is the integration of platforms, regardless of bank size.

Customers interact with their bank in many ways: In fact, they average 53 interactions a month (many are not transactions—where money moves).  Many of the customer interactions result from researching products online; viewing balances online; or asking general product questions via online chat, phone conversations, and branch consultations.

There’s lots of data but no big picture—and right now it’s very hard to integrate all that data and leverage it to serve customers better. That leads customers to not rate banks very highly in relationship management in the BAI Consumer Outlook. One of the likely reasons: Banks today don’t use data to develop relevant offers and provide greater personalization, as by their own admission in the banker survey.

The good news is that more banks are working to become more customer-centric. The potential result is that more customers can report higher satisfaction because their banks demonstrate a relationship focus. And this in turn can engender more trust, which can lead to customers recommending the bank to others.

Spending and the digital disconnect

Banks, particularly smaller institutions, are also looking for ways to better connect when a customer logs onto their online banking site to shop for products, and when that customer visits a branch to make a purchase. While bigger banks are making more progress, less than a third of community banks can connect the steps their customers take from shopping to buying, according to the survey.

This can pose roadblocks. One pain point we hear about all the time from financial institutions is that they spend most in the digital channels, but it’s hard to justify that spend because they struggle to connect the dots between online shopping and branch-based purchasing.

More banks are partnering with outside technology firms, not only to offer greater personalization and customization, but also to advance a host of other initiatives. Thanks to these partnerships, they can:

  • overhaul core platforms
  • employ workforce management
  • enhance cyber security
  • implement enhanced CRM systems
  • work with emerging payments methods, and
  • support online account opening.

Banks are also seeking partners to improve their digital capabilities as well as the branch experience, both digital and physical. Indeed, the responses in BAI’s banker survey demonstrate that branch transformation happens and progresses slowly based on the institution’s size. Large banks typically lead branch transformation by experimenting with new approaches and then other banks follow suit.

The top branch initiatives other banks are starting to be implement include:

  • changes to staff roles
  • cash recyclers
  • customer WiFi access
  • teller pods to reduce teller lines
  • ATMs that accept cash and checks without envelopes
  • reduced square footage
  • computers or laptops for customers to use in the branch
  • video tellers, and
  • video signage

Putting the talent focus on focused talent

At the top of the list, banks are changing talent management due to the decline in human-assisted transactions as customers embrace digital. But while they may reduce the number of branches and tellers, banks are increasing the amount of professionals in specialized roles such as private bankers, wealth management advisers, small business bankers and universal bankers.

This makes sense, considering that the consumers surveyed said they are evolving away from branch transactions and moving towards digital channels. As such, banks are adding more specialists to help customers when they do ask questions at the branch.

Still, with fewer customer visits to the branch overall, banks must further build relationships digitally via social selling and interactive content: videos and content marketing articles by subject-matter experts. However, that poses a big challenge for all banks, including the largest institutions. Slightly more than half in the banker survey said it was easier to build relationships in the digital era than in the past.

One strategy is to employ brand ambassadors via social media, but only a third of the banks in the survey currently use employees in this way (though large banks are more likely to do this). Having employees as brand ambassadors can also help the employees themselves, if they feel their own experiences with the bank reflect customer experiences. By understanding the bank’s brand, employees feel more committed to its corporate goals—and more connected on a personal level to customers.

Ultimately, having more connected, committed employees can reduce turnover. Retention still remains as big challenge for banks, but it’s an issue where they must always improve. While technology can help a bank become more customer-centric, banks still need talent to deliver their products and services.

In the end, many factors must come into balance: tech and talent, platforms and partnerships, leveraged data and deepened relationships. When they do, a powerful potential arises: Customer centricity gets a jolt of electricity.

 

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Mark Riddle is BAI’s director, research and content delivery.

For more information related to BAI’s exciting research on this and other topics, visit BAI.org or contact us at: info@bai.org.

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