Banking on customer centricity in the digital age

Given the ever-rising expectations of today’s tech-savvy customers, it is imperative for financial institutions to harness the power of digital and embrace a customer-centric model

The author is Vice President & General Manager,Enterprise Services, HP India
Among today’s digitally masterful consumers, that old adage ‘customer is king’ never had more relevance. Tech-savvy, highly connected customers are spoilt for choice. Their expectations are high and they want superior services 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 the 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 reject ed—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.

According to Forrester Research, 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 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.

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. 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.

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:
1. „Harnessing insights from the big data they collect and using customer intelligence to cross-sell and up-sell.
„2. 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.
„3.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.
„4.Discovering what the engagement feels like from the customers’ perspective to ensure they are satisfied.

KEEPING UP WITH THE CONNECTED CUSTOMER: 10 GOLDEN RULES

According to Daniel Biondi, HP Fellow & Chief Technologist, Financial Services, Enterprise Services South Pacific, there are 10 critical areas that financial service providers must address to meet the demands of these new connected customers:

„Immediacy: 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.

„Mobility: 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.

„Multi-channel: A consistent engagement approach must be the backbone of customer interactions—and access must be available at all times across any channel.

„Simplicity: 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.

„Quality: Universal connectivity makes it more critical than ever for financial institutions to focus on quality products and services. Those failing to deliver can expect instant exposure on blogs, tweets, and video-sharing websites.

„Personalization: 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.

„Security: 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.

„Participation: 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.

„Sustainability: 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.

„Integration: 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.