- Regulations and regulations changes will require better relationships with customers to avoid customer churn.
- Investing in better customer knowledge is key to develop a fruitful long-lasting relationship.
- Big Data technologies are needed to comprehend new customer behavior patterns to provide better products and services and be able to compete efficiently.
Regulatory change is happening. In the UK the package of measures set to be imposed over the next two years are based on the findings that older and larger banks do not have to compete hard enough for customers’ business.
"In days gone by, this customer infidelity might not have left a scratch on their ego or cast a shadow of doubt on whether a large bank truly understood their customers. However, the world we live in today is very different."
The new initiatives will demand transparency, as banks will be required to publish trustworthy and objective information on quality of service not only in their branches but on their websites. This will allow customers to see how their own bank shapes up. Furthermore, a core measure will be whether a personal customer or small business is willing to recommend their bank to friends, family and colleagues.
In terms of how worried banks should be, within the first nine days of the Vickers Accounting Switching Legislation coming into force – which provides consumers with a quicker and simpler way to switch their accounts from one bank to another – over 35,000 consumers switched their current account to a different bank.
“The companies that win in this era of empowered, intelligent customers do so because they create better experiences and better relationships with their customers.”
In days gone by, this customer infidelity might not have left a scratch on their ego or cast a shadow of doubt on whether a large bank truly understood their customers. However, the world we live in today is very different. Now, customers expect the same level of service from their banks as they do their shops, restaurants and couriers. No longer do customers discriminate, they form their expectations through comparing and contrasting brands – irrespective of the industry. This means the banking customer experience is pitched against the greats of services from the likes of Amazon, Waitrose and John Lewis.
The companies that win in this era of empowered, intelligent customers do so because they create better experiences and better relationships with their customers. If banks are to optimize customer relationships and loyalty in this new environment, they need to integrate processes and technologies that enable them to build − and then act upon − a detailed view of what each customer wants. This all starts with achieving a single view of the customer.
The right customer relationship management technology can provide just that, offering an individualized service based on a 360-degree view of the customer. However, today’s successful companies know that they need to differentiate themselves based on the quality of their customer experience. But if your customer experience is powered by the same CRM technology as your competitors, how will you be different? To differentiate yourself, businesses need to choose a CRM that will transform customer relationships, re-energize your customer-facing employees, and help you to provide a truly exceptional customer experience.
This trend along with the introduction of similar new measures meeting customer expectations will require total commitment and focus from businesses. Having the correct processes and systems in place which separate your businesses from your competitor’s, will put companies in a position to attract and retain customers in this new retail banking world.
Today, the biggest barrier that buy and sell-side institutions must overcome is the need to adapt structurally from what worked in the past to what is needed now. Banks for instance, are typically organized along product lines with their own technology infrastructure. Entire systems that begin with the customer, include the banking applications and then right out to market utilities, are all organized along a line of business.
“By definition, big data is a problem for machines rather than humans. However, making the data useful will often necessitate that it is presented in a form that can be understood by humans.”
In the near term, it is unrealistic to believe that banks will be able to redesign and upgrade these applications to unify their data. The danger in trying to work around this constraint is that they will add new layers to their systems, further increasing the complexity in their architecture. And yet again, as with many areas of emerging technologies, the consistent theme is that banks are short of the key skills needed to harness the potential of big data.
Another barrier is delivering the insight gleaned from big data to the end users. By definition, big data is a problem for machines rather than humans. However, making the data useful will often necessitate that it is presented in a form that can be understood by humans. For this reason, data visualization will be a significant area of research and a beneficiary of the needs of users.
Furthermore, the value created by bringing together the vast amounts of data generated results in new problems. This is due to the increasing threats posed by cyber security and also the need to manage appropriate access to the data by employees. To solve these data entitlements will be a necessary part of the solution. As the problem of collecting and using data is solved, it will be important to secure it and manage how it is used and by whom. Ensuring that employees have appropriate data entitlements will become a core function.
What is obvious is that to overcome these barriers and seize the opportunities described earlier, firms will need a clear vision of what they want and a strategy to get there. At Innofis, we can help you get there with a clear understanding on how emerging technologies can help you achieve faster your business goals.