A recent report on The Disruption of Banking by The Economist highlighted that more than half of the banks are either ignoring the Fintech trend, or talking but not doing anything about it. In 2016, we are now seeing banks finally starting to tackle the emerging trends by partnering on many fronts, utilizing application program interfaces (APIs) and experimenting with innovations such as blockchain. In addition, there’s talk of leveraging social media, building integrated systems of engagement and embarking on a digital transformation journey.
Yet, while core customer satisfaction at banks is improving and excitement about Fintech is increasing, discussions about creating a multi-channel customer experience still focus on the maturity of individual channel capabilities and interactions instead of the metrics of servicing, acquiring, upselling and retaining customers by applying a combination of channels and capabilities. Exciting advances in analytics and digital technology take the focus away from the thought process that banks are primarily a strong relationship driven, financial management business, not a technology platform or service engaged in commerce. A bank’s marketing and cross-sell programs are about fulfilling aspirational and non-trivial long-term customer needs even as they make short-term transactions seamless and fluid. The priorities for customer experience should be set accordingly for banking.
One of the crucial foundations for the new world is intuitive and contextual customer engagement across channels, not just the breadth of available options on a single channel. According to a JD Power 2015 survey, more than 68% of virtual customers have not been contacted by the bank in over a year. Consider how banks might engage with a checking customer who is logged in and looks up retirement or wealth planning information on the website. How should the various channels such as online, mobile, branches and contact center come together to address the expressed need of this customer by reaching out with both advice and sales messages in the context of the customer’s current or potential relationship in the long-term? In addition, the fact that continuous customer advice and engagement is expected proactively as a core promise makes this capability even more important.
Yet, the current state of marketing automation at banks fails to acknowledge the customer’s expression of this need, let alone follow up intelligently. The same shortcoming keeps reappearing: initiating a customer engagement model and then making it straddle other channels. This is evident from a study by The Financial Brand highlighting that “omnichannel” is perceived as channel delivery capabilities, not how channels work together. The report also highlights how important it is to create and convert cross-sell opportunities as they present themselves. As emerging alternative non-bank options chip away at individual parts of a bank, the ability to cover the customer experience in its entirety becomes even more important. There has to be an easier way to break the inertia and make progress, while keeping an eye on the long-term.
The biggest challenge today is the defragmentation of the customer engagement front end. Banks need to be at the forefront, but are increasingly at the back end fulfilling transactions. Given this, it may be necessary to sidestep – not ignore – larger strategic issues about digital strategy in order to focus on simplistic, forward-looking customer journeys. It is well known that customers engage in significant self-driven research, interact across multiple channels and require multiple follow ups to make a favorable and educated decision. This can be narrowed down to the following question: How can banks enable each channel to help customers progress along their intended or expected journey so that the customer relationship is mutually more significant?
Instead of asking the question about which features must be made available to customers on which channel, moving a customer along to the next step of the journey may be the simplest way to tackle the burning question of contextual customer engagement and experience. For example, you could draw customers in through interactive engagement tools, contact centers could educate and nudge customers to more sticky information tools, use mobile to spur action and self-analysis, and leverage the branches to make contact to further discuss the need (and close, if possible). The underlying premise is about customer engagement that feels responsive and fresh. A nurturing plan arising from this foundation will connect, engage, educate and offer product options in full context of customer’s overall financial management needs. All along, additional information about the customer should be gathered to fuel the process.
In this use case, technology and business process changes are needed, but a major overhaul is not the only way forward. Addressing even a part of this journey in an automated fashion – the digital touchpoints – while triggering the other parts in a semi-automated fashion will set the tone for the customer engagement charter. Such a blueprint continues to evolve and identify prioritized interactions from a customer’s point of view and defines actions that help a customer with their need. The speed of change in the market is so rapid that these incremental changes cannot be delayed or labeled as band-aids if banks are to reinforce their brand in the customer’s mind. Constantly thinking about the business value of each incremental innovation contributes to that inertia. The business value instead should be recognized as a sum of these innovations.
The use case outlined above is simple but still extremely complex to implement, given a bank’s sprawling legacy technology and business process landscape. But it doesn’t have to be so complex if banks evaluate the options with a transformation lens that includes continuous technology refactoring and incremental innovation. In typical transformation and technology strategy conversations, continuous technology refactoring pains at the architecture level are often not included in the equation, delaying the realization of benefits. Meanwhile, an innovative response to disruptive and new trends is needed right now, not later. As a result of this paradox, the goals of multichannel integration continue to remain elusive.
However, in today’s fast changing world, so long as customer centricity is being advocated to minimize frequent operational change management needs, banks have a dire need to start simple so they can deliver the customer engagement goals as fast as possible. Tangible business results have to be delivered in months, not years. Agile has to be considered not as a project delivery methodology, but as a business innovation methodology.
An organizational challenge with such an approach is the attribution of success to the right functional units. Simply linking the efforts that result in success instead of keeping them isolated may result in better agility. For example, can online banking measure their contributions to the cross-sell achieved by the contact center, and vice versa? Historically, these silos have been a result of launching new channels and the need to measure their success effectively. But today, these issues are better addressed by developing rules that identify the customer profiles, touchpoints needed, their sequence and the various actions that need to be triggered across the channels. As these steps are executed, simple attribution analytics are just a matter of listing all interactions with the customer. Will this analytics cover 100% of cases and be 100% automated from the outset? Probably not, but is waiting for a long-term transformation roadmap an option?
Do banks need advanced big data predictive analytics and modeling to initiate this customer engagement? The customer journey can be triggered by explicit customer action and expanded over time to be triggered proactively. The maturity of analytics and technology is an evolution. An aggressive, incremental approach feeds positively into and is governed by the broader marketing technology and data strategy discussion. In fact, in a fast changing world, it’s best to be making incremental improvements that align with the long-term vision for tech and data architectures. For example, even as a major overhaul is planned by way of a digital transformation roadmap, new developments like Fintech API models, new white labeled products strategies, payments innovations, or inclusion of the Internet of Things may render those strategic initiatives inadequate even before they are completed.
Loosely coupled business process plays facilitate agility and reduce program risks. Further, technology enablers such as core transformations, big data, predictive analytics and advanced mobile and digital initiatives can be more confidently launched from a platform that is being constantly evolved based on a singular focus on customer centricity and experience.
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