Every bank understands the imperative to get closer to its customers to increase retention and maintain a competitive edge. Banks are increasingly facing more challenges in their effort to be closer to their customers. Customer expectations are changing rapidly being influenced by the fast change of pace in the industry, as well as the increased quality of service they get from other industries. Also, the market has recently seen the uprising of several disruptive non-traditional players who are more agile and are altering the playing field dramatically. The above means that higher rates of customer churn is a reality today leading to flat lining or even decreasing growth.</p> Accenture’s Global Consumer Pulse Research Study revealed that 62% of consumers switched companies due to poor customer service, with 85% saying their provider could have done something to prevent them from making this switch, clearly outlining to banks the perils of ignoring their customers.</p> Banks understand that the only way to retain their customers and improve their profitability is by increasing the value of the services they provide to their customers. Hence, they are focused on attempts to improve the customer experience and in the process build a truly customer centric organization.</p> According to Gartner’s CIO Survey, CIOs regard customer experience as the greatest opportunity for IT innovation. However, banks are hampered in being truly customer centric by a number of reasons:</p> Legacy architectures </strong>– Most large banks continue to use decade-old systems that are rigid and siloed, and are usually product centric. Customer data is distributed across multiple systems making it a nightmare for banks to recognize and consolidate data for a single customer.</p> Internally focused processes </strong>– Bank business processes are mostly internally focused and reflect organization structures and internal system architecture. These processes are not effective from a customer perspective, resulting in sub-optimal results. One reason quoted by customers in switching providers is their frustration in not getting the services they want in a transparent manner that reflects the nature of processes pursued by banks.</p> Legacy organization structures </strong>– Many banks are organized around products leading to measurements, analytics, and product-centric structures and processes. This results in behavioral practices that are not necessarily customer focused. One of the key indicators of customer satisfaction with a provider is the depth of the relationship – loosely translated, it is the number of products a customer has with a bank. The current organizations of most banks are in contradiction to their stated goal of increasing the breadth and depth of relationships with their existing customers, as customers don’t want to deal with different parts of a single organization.</p> Lack of actionable data </strong>- The single biggest obstacle for banks to be truly customer centric is the lack of true, real-time, actionable data on their customers. Banks continue to operate on data that is often dated, incomplete, inconsistent and non-operational.</p> Moving from customer view to customer insight</h4> A survey of banks would reveal that among the single biggest projects where banks have spent their discretionary budgets, are projects to enable a ‘360 degree view of the customer’. Banks have spent hundreds of millions of dollars with varied degrees of success – very few banks can be deemed to have been successful in a getting a good view of their customers. More so in the case of corporate customers whose complexity and sophistication of operations increases the challenge for banks in truly putting together a complete view.</p> The result is that few banks are geared to meet today’s challenges. With the increasing pace of change, it is inevitable that the banking environment will look completely different by the next decade, leaving even these few banks (let alone the majority) ill-equipped and agile enough to be ‘on the curve’ if not ‘ahead of the curve’ in meeting these demands.</p> What will not change, though, is the need for the banks to understand their customers – this truism will remain true irrespective of the pace or degree of change. Banks need to move from thinking of a customer view, essentially a static picture of their customers, to understanding their customers holistically – a move towards ‘customer insight’.</p> The data most banks use today to drive decisions (customer, but also management decisions) is batch driven. Given the legacy architecture of banks, most data available to banks is batch driven. While banks have invested in creating architecture that results in giving customers a true view of their balances in real-time, bank insights into customers is not real-time, but rather driven by customer behavior as apparent from their real-time transactions and other interactions.</p> Banks must gain real-time insights on their customers that will then allow them to understand (and predict) customer behaviour, which in turn will allow banks to be agile enough to meet their customers’ needs. For a bank to be successful and continue to be successful, the value of objective, real-time and actionable customer insight cannot be emphasized more.</p> Article contributed by SunTec.</p> For more information on how to gather customer download the white paper</a>.</p> </p>