How Banks of Today Can Build the Customer Experience of Tomorrow (Part 3)

SunTec Research Team

In the previous part of our article, we discussed on the importance of creating a holistic plan for improving customer experience and how technology will act as the lynchpin for delivering great customer experience.

In this part, we will discuss the importance of creating a holistic plan for improving customer experience and how technology will act as the lynchpin for delivering great customer experience.

Create an ecosystem

To create the bank of tomorrow which delivers a great customer experience, banks cannot do it alone. They need the right group of friends. And with these friends, they need to build the right ecosystem.

What will the future look like for a banking ecosystem? The bank will act as a platform for a number of financial and non-financial service and product providers to come together and compete and collaborate within themselves to provide the best products and services to the bank’s customers. Too much to digest? To put in simple terms, the ‘bank of tomorrow’ will be like a marketplace like Amazon where many companies will come together to sell their products and services. The job of the bank will be to orchestrate the experience across the customer lifecycle and focus on providing the optimum tangible and intangible value.

This model is proving a success everywhere. In fact, ecosystem companies such as Amazon, Alibaba and Tencent are eating into the bank’s pie! 

To counter this emergence of new competition, and to continue delivering better customer experience, the banks need to look at the following steps –

1. Decide on the ecosystem model to be followed. I can foresee two models – one where the bank is at the center and the partners are at the periphery. The bank provides necessary services to the periphery companies who will provide customer experience. Or, the bank can be at the forefront of the customer experience and leverage partners to create necessary products and services. Selecting the right ecosystem model will be based on the customer experience vision that the bank wants to provide, and its capabilities.

2. Identify partners who will fit the ecosystem model that the bank has selected. These partners may come in all shapes and sizes – in fact, competing banks can be potential partners. Banks need to evaluate and select partners based on well-defined criteria and make sure each aligns to the customer experience vision set by the bank.

3. Once the partners are identified, banks should focus on creating mechanisms that will enable value delivery across the ecosystem. There is also a need to measure the value delivered by the partners on a continuous basis. The bank should concentrate on building or buying systems that will help it to measure, monitor and manage this value delivered.

4. Create mechanisms and incentives that will entice and enable partners to build and develop products and services by leveraging the bank’s technology and other infrastructure. Think Apple or Android. These ecosystems were not built in a day. Rome was not built in a day. The bank needs to be patient to obtain the scale of economies and network effects.

5. It should also be able to collect feedback from customers on a real-time basis and ensure the feedback forms a loop and the partner delivery model is continuously tweaked to reflect the feedback collected.

With the advent of philosophies like Open Banking and PSD2, the importance of creating an ecosystem will be on rise. Banks will have to create an ecosystem that will focus on delivering the best customer experience across the entire customer lifecycle. Irrespective of the fact whether banks want to be part of an ecosystem or not, they will be part of this reality. Keeping in mind this fact, banks should take careful steps to be part of the right ecosystem so that the focus towards customer experience is not diluted.

Build focused teams to execute the strategy

Yes, customer experience is not the job of one single team or department but is the responsibility of everyone in the bank. But banks should also realize that certain initiatives aimed at improving customer experience need focused teams.

Many banks make the mistake of adding these initiatives as part of hundreds of others, and quite often these die a natural death. If customer experience is a top priority for the banks, they need to make sure that these initiatives are handled by teams with unwavering focus. Technology giants like Amazon have used the principle of single threaded teams to get a great amount of work done.

Making sure that the teams are focused on one goal will help the banks deliver results in a quicker way. It will also help them maintain focus towards improving customer experience.

Measure, monitor, manage and raise the benchmark

Evens as a foundation is laid for improving customer experience, it will be equally important to measure, monitor and manage customer experience provided on a real time basis.

Banks will have to leverage systems that will focus on the following:

  • Measure customer experience generated by different stakeholders, including partners in the ecosystem, that I had mentioned before.
  • Continuously monitor transactions that customers make across the entire customer lifecycle, and identify the tangible and intangible value for each.
  • Create enterprise wide metadata-based reports and alerts for select stakeholders and provide meaningful insights and intellect to enable them to take proactive action.

By using systems that are capable of handling the above, banks should focus on building a feedback loop that will help them realize where they stand and take necessary actions as needed.

Continuous improvement will be key. Using the feedback received, banks should focus on raising the benchmark for customer experience on a continuous basis. Banks cannot afford to be dinosaurs who got extinct.

Cliché alert – Banks, like any business, is all about customer experience. Poor customer experience can cost banks more than USD 7 billion, which highlights the importance of ensuring a great customer experience. For the ‘bank of tomorrow,’ there is a need for creating the customer experience of tomorrow. Only then will the customer of tomorrow continue to bank with it. Attracting new customers, generating more revenue from existing customers, driving down costs for each transaction and increasing retention – all will depend on a genuinely great customer experience that is invisible, intuitive, immersive, and integrated.

Banks that focus on providing a better customer experience every moment will not only create an increased market impact, but also help build more trust. As I said, for any organization, trust is essential as it will help the organization fulfil the promise they made to their customers in the first place.

The ‘bank of tomorrow’ will need to create seamless experience and seamlessly integrate with the customers life. And, it should go back to the drawing mode and focus on exceeding expectations – not one time, but every time, all the time.

As a ‘bank of tomorrow,’ a genuinely great customer experience is essential, but, in recent times, what do you think has made customer experience come to the centre? It is the rise of a new set of competitors and the speed at which they ideate and execute, forcing the banks to sit up and take notice.

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