From a product centric to a customer centric model
Bank customer expectations have changed
Thanks to the increase in computing power, speed of information and smartphone revolution, customers expectations towards services they use have changed. Nowadays, customers expect things to be quicker and accessible anytime and through multiple channels. Banks, as any other company, couldn’t escape this trend. Today bank clients are expecting personalized solutions accessible on the go and without long procedures.
These expectations are especially evident in the younger generation. In fact millennials do not only have different expectations, but also have a higher probability to change their bank if those expectations are not met. That means that not only should banks try to attract millennials, but they also should work hard to retain them. While there are many ways the bank can achieve that, one thing that is for sure is that they cannot do so by serving them in the same way they have served past generations. Millennials are digital natives, price conscious and look after convenience to fit their fast moving lifestyle. That’s why they choose their bank for their online banking service and reasonable and transparent pricing.
Moving from a product centric to a customer centric model
In a study from Accenture, 79% of consumers consider their banking relationship to be transactional. This is not a good news for banks and something they should be concerned about. Customers don’t think of bank services as an added value, but rather something of a commodity. It means that they see online banking merely as a tool to check their statement and make payments, but not to assist them with personalized financial advice, which also means a higher probability for them to look for those services in other providers. The good news is that in the same study consumers said that they are open to receiving these services from their bank.
In order to do that banks have to start focusing more on customer problems and deeply understand them. By doing so they can make more efficient investments, attract more clients and build more valuable connections with their existing ones. In fact in one study from PWC, they concluded that the shift to a customer-centric organization is not optional. Banks should see this as an opportunity to transform their customer relation in recommending the best products and services, helping them to access financial and non-financial products and services and by offering them personalized offers and discounts in merchants.
Using technology to move to a customer centric model
Automating processes and offering personalized services will be crucial for banks to shift to a customer centric model. That is why the buzz words today are artificial intelligence and big data. Although it may seem that banks are behind from their tech peers in embracing the latest technology, one aspect where they have a big advantage is in their huge and historical customer data. And to make it even better, bank clients trust their bank more than any other institution to securely manage their data.
This is where banks should act fast and start collaborating with tech companies that can help them to transform how they use AI to engage their clients. There is a big opportunity for banks to start using customer data to improve the service experience and offer targeted products.
Another thing that banks should have in mind, is that technology alone will not be enough to be customer centric. Instead all the people and processes in the organization must be customer oriented. They should move away from product specific responsibilities and start understanding their customer needs and deliver the services they want.
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