With a dwindling customer acquisition rate and a growing lack of confidence in the financial services industry in general, retail banks globally are left with little choice but to focus back on boosting confidence among their existing customers and examining more closely how to drive out organic growth: these can only be achieved by working on customer advocacy as a key strategic focus.
Enabling the creation of a positive customer experience is an absolute necessity for survival and growth for this industry. Retail banks globally, whose deposit base is now coveted by the once strongest and most bullish global banking organisations, have had the closest connections with their customer community and, as such, have the strongest capacity to create the right experience for them.
Numerous quantitative surveys prove that a positive customer experience improves the probability of the customer to return to the same bank for the next purchase, be it a mortgage or insurance product, and reduces the probability of the customer to switch to a competitor. Moreover, a good customer experience benefits the stability and strength of the retail bank brand.
If creating an enhanced customer experience is the mantra for success, then why is the concept frequently so difficult for banks to comprehend and, in turn, to implement? The answer is simply because customer experience is not within the control of the bank. It forms the unique experience of the customer, and therefore represents something that is both private and personal. Banks can, however, positively influence this experience by better understanding their customers’ needs and preferences, individually, and by directly addressing those needs.
At Wipro, we have been working on how banks can improve on the experience of their customers, and have developed the following insights.
Much of the retail banking infrastructure used up until today has been based on the so-called ‘cookie-cutter’ model – ‘one offering for all’ – with almost zero variance for customisation to individual consumers. Fortunately, the retail banking industry is distancing itself from mass banking to a more personalised form of banking, with the advancement in technology. In recent years, the model has shifted from service banking, whereby a customer is serviced by a clerk in a branch, to varying shades of either assisted banking or self-service banking, such as online banking.
A primary driver for this shift has been the change in the consumer demographics. Many baby boomers (aged 52 to 62) are preparing to retire, while a larger number of so-called ‘Gen Y’ customers (aged 18 to 27) are entering the workforce.
From adapters to natives
This shift in demographics from ‘digital-adapters’ – customers that have had to adapt to new technologies – to ‘digital-natives’ – customers that have grown up with technology – has had a profound effect on the banking industry globally. Gen Y consumers are exposed to a large array of personalised service offerings, courtesy, to a great extent, of the internet, ranging from e-mail and real-time chat, to social networking and streaming video. The hugely rich, customised and interactive experience these technologies provide set similar, high personalisation expectations in the retail banking realm as well.
Fortunately, today’s technology enables banks to increasingly provide personalisation to their customers. Banks need to be decisive in evaluating the personalisation quotient of different products, platforms and tools before investing in them. From mass-offerings to personalised offerings, it is perhaps the single most critical success factor for banks in the future.
Personalisation can be continuously refined across multiple dimensions:
- Channel convenience. How to make the access and service in each channel more personalised and consistent?
- Best-fit choices. How to leverage analytics to provide the best-fit choices to help the customer at every decision juncture?
- Intuitive user interface. How to make the look and feel of every interaction channel more intuitive. It is important to note that some channels (branch, internet, mobile and call centre) have the inherent ability to be more intuitive than others.
- Analytics. Near real-time analytics and inference are the key to personalisation refinement. The more touch-points a bank is able to analyse – customer interactions, preferences, financial needs – the better the bank is able to leverage its data to become more relevant to the customer’s financial life. This builds up a virtuous cycle of trust and information sharing that can be further leveraged. Analytics tools have come a long way to help in this personalisation process, but more advancement is still necessary in this area.
Service excellence
While personalisation focuses on improving the customer interaction every time, it cannot stand on its own until a bank has a wide array of financial offerings (from which a customer’s sub-set of offerings can be personalised) and excellent back-office operations.
In today’s competitive world, banks need to acquire and build capability to add, modify or remove their customer offerings on the fly. Offerings should take into consideration a variety of external factors (such as competition offerings, macroeconomic conditions and policies, changing consumer needs and preferences) and a robust internal innovation factory that creates pioneering offerings continuously.
The back-office factory (products and processes) has to continuously optimise and innovate to propel an aggressive personalisation agenda. A trusted technology and operations partner can help in this journey.
Security is also critical. Not a day passes without some financial services institution in some part of the globe being digitally attacked. Every attack maligns the institution’s brand and value to its customers. A robust information security policy, a contemporary infrastructure and a seamless execution to tackle security threats are key investments for customer experience enablement.
Organisation culture
From the bank or financial service institution’s perspective, this is perhaps the biggest change that needs enacting. A good part of the other three factors are based on technology and its advancement. However, the human factor overshadows both of these. Until such time as the culture of the organisation is changed to be more sensitive to the needs and preferences of its customers, the other factors will have limited impact.
Defining customer experience as a strategic priority is a first step. An enterprise-wide, corporate officer-level champion for the customer experience agenda is another must-have. A structured programme to sensitise staff members continuously on customer experience enablement is vital.
Enablement of a positive and consistent customer experience can transform banks and financial service providers to being trusted advisers. At no time in banking history has this been more relevant and necessary than today: those banks that embrace this opportunity will differentiate themselves from the others in attracting, retaining and growing their customer base and business substantially.
Ravi Kiran heads the banking domain team at Wipro Technologies.
CAREER HISTORY
- Mr Kiran leads Wipro’s banking and financial services domain team, spearheading business development in APAC and industry competency building globally.
- Mr Kiran has 15 years of IT and ITES experience covering payments, cards and retail banking domains.
- Mr Kiran’s key focus at Wipro is to bring innovative solutions to banking clients. One key solution is in the realm of customer experience, called ‘Intuitive Customer Experience’. He also works on other initiatives to drive more non-linearity in Wipro’s customer engagements and develop IT -BPO integration and platform-based offerings.
- Prior to Wipro, Mr Kiran was the CTO of Venture Infotek, the premier transactions service provider in India.