The current state of the banking industry
The digital transformation of the banking industry is seeing a lot of hype these days, the challenge residing in finding ways to offer high-speed functionalities along with the much-needed human touch throughout all the operations.
Considering the banking scenery back in the days, the institutions in the field used to act as advisors for the people needing their service rather than salespeople which is what we are witnessing at the moment. This transformation has enticed a number of startups that manage to seize the opportunity and create bridges that gap this unanswered need by employing big data, machine learning and personalization to their advantage.
However, we cannot turn blind to statistics that point out to a large percentage of banks that are either already on a process of changing or improving their digital technologies as well as those that are considering this shift but have not started yet (Deloitte, 2019). Thus, the reorganization of the banking industry is at its peak, with disruption happening at a fast pace.
Why being customer-centric matters
The majority of the banking companies are rather focused on their products and are operating in silos. As a result, the customer journey is fragmented without any clear insight into the needs and wants that are driving their every action. It is not that opening of an account or that loan that really motivates one to ask for guidance and services. Rather it’s the need to create a home, buy that dream vacation or start saving for the kids’ education that gets the ball rolling and embarks one on the boat to a more prosperous future.
It’s the why that matters as no one buys a product that doesn’t fix a problem, whatever that might be. And this is where the focus should be at – on addressing customer needs by providing the right solution at the right moment. Which brings us to the eternal question – “How is this helping my company?”.
The answer is simple. Being customer-centric means going further than focusing on the products sold to one customer that fixes his problem now; it’s about seeing the lifetime value and his evolution throughout different stages while providing a seamless consistent experience that draws the most benefits. Shifting from product-oriented to customer-first, you can build lasting relationships that stand on the foundation of loyalty and trust, thus reducing churn and driving retention.
The risk of not being customer-centric
How would you feel if your bank would advertise you a loan that you have already signed up for? And how would you feel if, say, you are looking for a house and just at the right time your bank would call to offer you a deal that would save you the research time? It’s a no-brainer that the first situation would slightly annoy you, while the second one would leave you feeling contempt and optimistic.
The risk of not being customer-centric is plain and simple – not offering personalized experiences that put the customer at the center of your service translates into unsatisfied customers who purchase less. Ultimately, they will change providers lowering your profits and reducing the time for innovation which will affect you for years to come.
Start by asking yourself what’s holding your company back. Maybe it’s the technological infrastructure or the culture within the organization. No matter what your answer is, you need to know that there are always solutions to help you fix those issues and start avoiding the risks of not having the customer at the heart of your strategy.
In order to move towards a customer-obsessed culture within your organization, you need to start by redefining the customer journey so that you can offer a congenial experience that is in accordance with your customers’ expectations. We are living in the age of digital where everything takes place swiftly – no wonder clients expect this from their banks as well. And they are looking to build long-lasting relationships which should be cherished as such without the impediment of time-limits and lack of information.
By using the data that you have at hand you can learn more about customer pain points and find similarities between them as well as triggers in the buying process. This will help you in mapping out different journeys and possible outcomes for each, eliminating the constraints related to a huge volume of work which inhibits employees from diving deeper into their clients’ problems. Moreover, you will be able to shorten the time-frame for completing the requests which ultimately translates into happier customers.
Next, banks have a treasure available that consists of the huge amount of data they have on their clients. By creating a 360° view of their customers they can personalize their communications and start offering the right solution at the right time in the right place. The message and offer you deliver to a first-time customer is not the same as the one you send to someone who has already purchased several times from you. The goal of each customer journey is different and you should act as such. Start by developing a data-driven culture and strategy in order to leverage all its benefits.
The bank of tomorrow focuses on merging digital with human-touch by providing fast, error-free solutions as well as advice catered to each individual. Staying on top of the game requires a customer-centric approach along with a data- and digital-driven culture that fosters constant innovation without losing sight of what truly matters – that is, happy customers that keep coming back.