In 2013, we witnessed the rise of digital customer engagement and collaboration. In fact I wrote so much about the trend that folks are pretty much summing up my blogs as “various permutations and combinations of social, digital and analytics!”
But its true and here I am again.
5 years since the global financial crisis, banks are once again starting to focus on growth. But they are now encountering competition on a new front. No longer are customers buying into the traditional banking rules that held true for several decades. People need simplicity, transparency and value. And the changing banking landscape is making it mandatory to review these needs and define them again.
The customer experience must be simple. Customers are no longer ready to jump through hoops searching for and subscribe to products/offerings that best meet their needs, given what they already have, or based on who they are. Facing an information mountain to weed through, customers seek external sources of information which may not decide in the bank’s favor. Instead, we must take analysis to the customers, and make it as simple as possible to transact across product categories. This will improve both acquisitions and cross sell, in turn leading to stickier relationships. The same way a master chef constantly rearranges his kitchen to best serve the cuisine of the day, user persona driven analytics and digital content management are key enablers of this omni-channel customer engagement trend. Contextual and simple experiences are the future. Banks like www.Simple.com aren’t just a novel idea. In fact their emergence signals the emerging position of “us versus traditional banking”.
Fine print will be laid bare in an e-commerce economy driven by peer feedback and reviews. Whether the revenue model is fee based or based on charges, the model must be transparent. In fact regulations such as Dodd Frank, Durbin amendment and popular movements against credit are examples of resistance not to the core revenue model, but to the manner in which these are being projected and perceived. Business must be empowered to promote transparency and move away from non-targeted offerings that require the need for complex conditions to cover contingencies. Case in point is Bank of America which levied and then quickly reversed debit card fees in favor of customer satisfaction, and in the process it set a great example for the industry as well (www.USAtoday.com 11/1/20111). The question to ask is how does technology enable customer partnership as the right way to earn trust? The notion of transparency requires that the business has options to innovate quickly, position products in a more targeted fashion and has increased cushion in the form of reduced operational costs. It must be able to tap quickly into emerging business opportunities that present themselves in this fast evolving banking ecosystem. Legacy modernization, simplified application portfolios and deeper analytics are common levers that will help make a dent and reduce the need for the business to rely on short term survival based tactics.
While simplicity and transparency are becoming table stakes, the biggest enabler and contributor to the banking model of the future is innovating from the perspective of the consumer. Think about it, we are customers of the bank for reasons that have nothing to do with a bank. We wish to buy and consume products, subscribe to various means of entertainment, take up fitness and social activities, invest for the future and a myriad of other needs. The situation today is that banks are being relegated to back end enablers. While that is not a bad thing, the situation must change if they are to remain relevant. As cross industry integration evolves, the entry barriers to the banking ecosystem are reducing. Non-bank entities are stepping in to fill the void of innovation and taking center stage in the customers’ minds. Core banking transformation is just the first step. User experience and bringing forth the right offer, to the right customer at the right time is the second step. And the most important step is to recognize the customer’s ecosystem to understand the “why” behind the customer need. There is no other industry better equipped to do that than consumer banking. Data management, analytics, enterprise integration and a customer oriented multi-channel presence are critical enablers of this target state.
To meet these goals, it is important that we gear up to innovate, cut legacy baggage and transform our processes and technology to meet the new customer needs in this new age. Anything less and we’ll find that the cheese has been moved.