Customers rule in bank of the future

By Bruce Dahlgren & Daniel Biondi, Enterprise Innovation;

Among today’s digitally masterful consumers, that old adage ‘customer is king’ has never had more relevance. Tech-savvy, highly connected customers are spoilt for choice. Their expectations are high and they want superior service and products. They won’t hesitate to move on if their individual needs aren’t being met.

For the financial services sector, this dynamic, customer-centric landscape is making an already competitive environment even more challenging. Finding new customers and hanging onto existing ones is harder than ever before. Even more worrying for banks is the entry of disruptive new competitors, with the prospects of the millennial generation choosing a bank-free existence to source new financial services.

Millennials are looking for sophisticated and streamlined banking experiences that seamlessly connect with their mobile lifestyle. Anything too complex will be rejected – and at the click of a button they can let the world know they are unhappy.

Financial institutions must respond by harnessing the power of this new digital age and deliver a high quality customer experience. The future is likely to be bleak for those too slow to change.

More than lip service

According to Forrester Research[i], nearly all companies claim to be customer-focused – but few act systematically on this impulse. A global survey by Forrester across all industries found that seven out of 10 business leaders consider customer experience a critical or high priority. However, less than one-third of customer experience professionals believe their firms consistently take this into account when making business decisions.

Financial institutions cannot afford to be in this category. They are operating in a hyper-competitive industry in which diverse organizations are branching out to compete with them head on. These nimble competitors are demonstrating that a traditional physical banking presence doesn’t necessarily equal success.

Financial institutions must engage with their customers and build an emotional connection and loyalty – or risk losing them to those who will. This means becoming obsessively ‘customer focused’.

Placing a customer-centric approach at the core of an IT strategy

A barrier to success in today’s customer-centric digital age can be legacy IT systems and disconnect between the IT department and those leading the customer experience. This can lead to significant roadblocks.

There has to be a merging of minds across the C-suite with IT professionals learning to speak the language of those in charge of customer experience.

Rather than recruiting staff simply to maintain IT systems, CIOs need to be considering skills beyond IT expertise, and thinking about hiring professionals based on their creativity and ability to contribute in an agile environment.

At the core of this strategy is customer engagement. Any solution must start by discovering what customers really want and involving them in the design. By removing the guesswork the way is opened to provide a more valuable and personal connection to every single customer – “customer segment of one”.

The availability of new technologies, such as big data analytics and cloud, makes this much simpler and is pivotal in optimizing customer experience. Financial institutions should be focusing on:

  • Harnessing insights from the big data they collect and using customer intelligence to cross-sell and up-sell.
  • Using analytics to measure the customer experience to evaluate and plan new initiatives.
  • Leveraging the power of the cloud to create an agile response and cost-effective links with customers.
  • Engaging and educating customers so that they care more about the ‘what’s’ and the ‘how’s’ of their banking experience and to give them more control.
  • Discovering what the engagement feels like from the customers’ perspective to ensure they are satisfied.

Keeping up with the connected customer: the 10 golden rules

There are 10 critical areas that financial service providers must address to meet the demands of these new connected customers:

1. Immediacy – now or not at all: The Internet has quickly become the first-choice sales channel for new-age customers who expect near-instant delivery – and that includes immediate analysis and decisions from their financial service providers.

2. Mobility – no gaps allowed: Digital life flows seamlessly into real life for mobile, digital-age customers who are continuously connected. Financial institutions should be exploring next generation applications to further improve this capability.

3. Multi-channel – anywhere, anytime, any device: A consistent engagement approach must be the backbone of customer interactions – and access must be available at all times across any channel.

4. Simplicity – vital for acceptance: Simplicity and convenience are essential elements for young customers who have high expectations for context-aware, intuitive Internet interaction. Sites must meet their need for clean, unambiguous interfaces.

5. Quality – failure not tolerated: Universal connectivity makes it more critical than ever for financial institutions to focus on a quality product and service. Those failing to deliver can expect instant exposure on blogs, tweets and video-sharing websites.

6. Personalization – understanding the individual: Companies that treat customers as individuals – not as unidentifiable parts of a mass market – have a major advantage. This is the next key differentiator –personalized electronic commerce.

7. Security – creating consumer confidence: Security of personal and financial information is a fundamental requirement to create customer confidence. In an age of data sharing, institutions must overcome the technical challenges of meeting this personalized privacy.

8. Participation – emergence of the active consumer: Next generation customers will expect an opportunity to participate in product and service development cycles to ensure their needs are met. Financial institutions need to find ways of managing these expectations.

9. Sustainability – environmental awareness: Customers increasingly make purchase decisions based on an organization’s environmental record ranked on websites such as Climate Counts. This is placing greater focus on ecological and business value chains.

10. Integration – capitalizing on connections: Using information technology to integrate seemingly unrelated information about customers is an invisible enabler for the delivery of the ultimate proactive experience.

Transforming the customer experience

Financial institutions are on notice – they must look after the interests of their customers like never before. Those that fail to make customer experience a strategic goal and a reality will leach business to institutions that are more effective in their customer engagements.

To succeed the focus must be outside-in with IT integral to understanding, measuring, and constantly improving and anticipating the customer experience. It’s all about predicting what the customer wants and having the flexibility to respond in a unique, relevant and satisfying way.

The winners will be those financial institutions willing to embrace the opportunities with an IT strategy that is customer facing and provides a unified customer experience at all touchpoints.