Transforming Engagement with Customer First Strategies in Retail Banking

By Simon Burton | 11 August 2015

Lifetime relationships are fast becoming history as customer attitudes and behaviour towards organisations across every industry changes radically. So what is the best way to realise the new vision of customer centric banking and achieve seamless, multi-channel customer engagement? From improving the way mobile apps are promoted on the home page, to embracing the concept of the value exchange to entice customers to share information, Simon Burton, CEO, Celebrus Technologies, insists there is a huge opportunity for those retail banks willing and able to capture and utilise customer data to deliver a truly engaging and personalised multi-channel experience.

Growing Consumer Confidence

The impact of changing customer behaviour is now reaching a retail banking sector that has, until recently, been relatively immune from the drop in brand loyalty and escalating demand for better, more personal services. Retail banks, indeed, have been the last bastions of consumer loyalty due to a powerful combination of fear and inertia: individuals have been both unwilling to risk the potential financial upheaval associated with switching current accounts or mortgage providers and reluctant to embark upon the complex, often unfriendly processes associated with the industry’s Know Your Customer and Anti-Money Laundering requirements.

However, the introduction of the Account Switching Service is undoubtedly changing attitudes. Having already gained confidence from switching other key services such as mobile and utilities, the seven working day switch promised by the new service has resulted in a 22% year on year increase in customers changing current accounts.²

This increase in customer confidence and an influx of innovative financial services providers is creating a far tougher competitive environment for retail banks. Individuals now have more disposable income as the economy improves – and they are increasingly looking beyond existing providers. Banks simply cannot rely on customer loyalty any more – a fact that is being recognised, finally, by one bank’s decision to promote the availability of the best deals for all, not just new, customers.

Customer First Policy

Having woken up to the new reality – a reality that has been the norm for retailers, utilities and telecommunications providers for some time – just how should retail banks respond? While most are all making positive statements about the importance of the customer, what does that mean in reality?

Paperless engagement is, without doubt, becoming a top priority, as is the desire to enable customers to achieve everything they require online - hardly a surprise since 47% of customers actively prefer to bank online.³  Banks also recognise the importance of supporting customers across every aspect of a multi-channel engagement, including the ability to communicate in session, regardless of channel, to create that dynamic customer engagement - again in response to the fact that mobile and internet banking is now being used for transactions worth nearly £1 billion a day.⁴

Creating a timely, relevant and personal engagement with the customer across multiple channels is a huge challenge, but also a major opportunity. Retail banks have the chance to capture an amazing depth of customer information that could and should support highly effective and timely interactions. As such, these organisations need to find innovative ways of realising the unique insight held on each customer, from channel preference and location information (from credit card transactions) to changing spending habits, credit profile, merchant preference and changing patterns of income and outgoings. The ability to collect and, critically, effectively utilise that information will transform the way retail banks truly engage customers and enhance their experience during every interaction and across every touch point. 

Embracing the Opportunity

So where are we today? Certainly banks have clear opportunities to improve the multi-channel customer engagement model.  Just four out of ten UK retail banks offer a basic savings calculator and only three provide a help chat service, according to recent research⁵, indicating a number of simple steps that can be taken to immediately improve the customer experience.

And it is this customer experience that is key to improving the depth and quality of customer information collected online. Indeed, the retail banks can learn a great deal from the experience offered by other sectors.  Most companies across retail and travel, for example, actively offer customers a simple incentive in order to capture an email address at least.

Retail banks need to consider ways to encourage this value exchange. So rather than the traditional model which demands customers provide extensive personal information to receive an emailed quote, why not follow the model used by insurance companies - within compliance requirements, of course? In this market, having filled in a basic quote online, a customer has a number of choices, from having the quote emailed – which provides the insurer with email contacts and a chance to continue to mail with related product and services information; to knowing the quote information will still be available in a subsequent visit. For savings products in particular, where compliance needs are less stringent than those for loans, a similar approach by retail banks would enable far more proactive engagement to encourage customers through the sales cycle.

In addition the company can tailor banners and other content to automatically reflect the type of product in which that customer has shown interest. With some 40% of retail banks offering no form of personalisation at the moment, using customer information in this way to create a more personal experience that reflects an individual’s previous interactions will be key to improving engagement.

Every Step Counts

Banks need to respond fast to changes in customer behaviour. This is not just about loyalty; it is about the way customers interact – the time, the place, the device and the attitude.  Modern time-poor customers want to get banking tasks done as quickly as possible or, if considering new financial products, rapidly assess the market, make a decision and then get on with their lives. They also want to execute those tasks via the channels of their choice at the time that works for them, which could entail hopping between several channels and devices on one day.

Banks also have a limited product set compared to many companies. With less time and opportunity to engage existing customers, as well as new prospects, with relevant offers that reflect each individual’s life stage, it is essential to make every interaction count. The challenge is far from insignificant; however, those banks that don’t collect and act on this individual level data risk losing the momentum needed to stay apace with today’s consumers. Based on the increasing number of banks embarking on this journey with Celebrus, digital transformation investment is rocketing up the banking agenda.  So those that get it right, and quickly, have a chance to achieve a significant edge over the competition.

 

By Simon Burton, CEO, Celebrus Technologies

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