All relationships are tricky and never smooth sailing, successful enterprise are those who have managed to constantly delight their customers’ journey with them. Business and their customer relationships seem more challenged in this fast-paced world empowered by digital innovation. Institutions need to be ahead on the digital advancements to be prepared for consumer must-haves and wants. Financial and telecom businesses particularly seem to be struggling in enticing customer loyalty, which was taken as granted a few years ago in these industries. Attempts are being made to surf the wave of deploying new technologies to enhance customer experience. However, institutions need to cover a lot more grounds to keep up with these changes in order to create and maintain a close relationship with their customers.
The future of the telecoms and banking industry belongs to those who have regained the trust lost in previous financial scandals, rigid product offering and poor customer service. It’s a case of managing the push and pull technique, a theory often used by marketers. Previously, banks would only push out their fixed set of products for customers to buy, but over a period of time the evolution of technology and market environment has required financial services providers to work harder to pull in new customers and retain the existing ones. The market today no longer constitutes a passive audience and standard offerings are not the norm anymore.
Clearly being able to define an institution that’s nimble and can change the operational flow in real-time based on each and every customer choice is what we call a customer-focused institution.
Early 2000 saw a change in customer demand and service expectation, these led the institutions to move from a product-centric to a customer-centric model. Institutions which were structured around products for specific segments merged operations to align to what customer wanted irrespective of the segment. This cut out redundancy and cost improved operational efficiency. The Institution had to go through huge transformation in their business and technology operating model to define themselves as customer-centric organizations.
The current digital trend though, demands institutions to move a notch higher on customer centricity and expects them to be customer-focused. Being customer-focused lets customer define what (product or combination of products) they want, in what terms of (breaking the mould or the routine) they want, and how they want to be serviced (omnichannel) etc. Clearly being able to define an institution that’s nimble and can change the operational flow in real-time based on each and every customer choice is what we call a customer-focused institution. Customers today want to be recognized by their servicing institution and often demand flexibility that suits them.
Revisiting basics of how you service the customer in relation to what matters to them helps in understanding your customers’ End to End (E2E) journey. A 2014 Altimeter Group report highlights 79 percent of companies are focusing on journey mapping to improve customer experience.
Once a deep understanding of the customer journey is attained through the use of big data, the businesses can translate these customer insights into bespoke products and services.
The digital disruptors
The digital disrupters coming out of suburban bedrooms and tech clusters have changed the game. The internet has created the biggest opportunity for customers to jump from one vendor to another, especially when new competition offers transparent services which match the user demands. The financial crisis of 2008 opened previously shut doors for disruptive players and it remains a reason why challenger banks are eating into the pie traditionally reserved for the big banks.
Crisis has also Led to new regulations, which has placed high pressure on capital resource for safety that limits potential revenue for banks. The time needed for institutions to comply with restricted new laws has replaced time, budget, and resources that usually reserved for improving customer interaction.
Innovation in the payments area is an example of how new technologies are competing with the traditional payment methods within the retail banking sector. Today, low value payments can be made through variety of options which have clearly taken a huge share of what was routed through the traditional banking system. As you may have already seen, investments are being made by banks in Social media, Analytics and Cloud (SMAC) technology which are currently in the catch up mode; however dramatic investments will need to be made if the banks are serious about meeting their customer expectations. Evidently, the financial services industry lags behind the telecoms industry in relation to delivering true customer focus.
China’s two leading technology companies Alibaba and Tencent have been given the all clear by the state regulators to now operate as banks. Both companies aim to provide online banking services, placing a big focus on delivering any time access to China’s growing population of smartphone users. Competition has become even fiercer, especially in markets where technology adoption has yet to mature. The challenge facing banks and telecoms businesses are multi-faceted as they strive to outperform disruptive players while fighting with unprecedented regulatory challenges and swings in consumer behaviour.
Adopting “intelligent business layer” as a differentiating layer between the quick-to-deploy and technologically advanced omni-channel, and the multitude of back office systems is the way forward.
Strategies to overcome challenges
With the explosive growth of smartphone technology, institutions need to incorporate SMAC into their IT and marketing strategies if they truly want to be customer-focused. Big Data can speed up customer acquisition and retention for businesses if deployed in an effective manner. This will help organizations to better understand their customer product choices, spend patterns, channel choice and create possible visibility into other non-conventional banking services. Further guiding internal sales and product management teams on the portions of business which is leading edge and what is bleeding edge. At present this is not the case; businesses are still experiencing the consequences of the silo effect,
where the different layers of technology do not work with one another, causing customer data to be trapped. The side effects of this can continue to hamper businesses, leading to poor customer records, low customer engagement, and no ability to up-sell services.
Multitudes of silo systems and legacy technologies make it difficult to change to a customer-focused organization. Adopting “intelligent business layer” as a differentiating layer between the quick-to-deploy and technologically advanced omni-channel, and the multitude of back office systems is the way forward. Instead of large-scale rip and replace IT projects which tends to be costly and Lengthy, transformation can be achieved effectively by adopting such non-intrusive “intelligent business layer” as a middle layer. Few institutions have taken this approach which is far easier and quicker to implement and helps faster go-to-market strategies, e.g. UBank by NAB. Others are taking the route of inorganic acquisition of disruptors, a quicker way to bring in the new capabilities—albeit with the added challenge of integrating with them, e.g. acquisition of Simple by BBVA.
The bridging of gap between banks and telecom businesses with their customers can’t be implemented by technology/system changes only; institution have to re-define process, culture, and client servicing should not be limited to the client facing teams only. The entire organization needs to align towards servicing the customer. Constant feedback needs to be obtained in regards to how the companies are matching their customer’s expectations through the customer journey within the institution. Creating a sense of involvement, recognizing the importance of customer relationship, and showing value for every interaction the customer makes with the institution are vital in building a customer-focused organization.