This is a pivotal point time for the banking industry. Due to the regulatory nature of the industry, there is little that exists today in the way of product differentiation. Financial services (FS) products have essentially become commoditized as customers and regulators are requiring more transparency in pricing and fees. As a result, the only way for FS firms to differentiate themselves is through the customer experience they offer.
This poses a significant challenge to traditional FS firms because they have built their management, technology and data structures over the last 20 years largely around individual products or channels, creating silos and internal blinders to the holistic customer experience. As a result, customers must navigate multiple channels to meet their needs, and receive no real value-add from the relationship other than the transactional products they use on a day-to-day basis.
In the past, customers were forced to accept this as the way of life. This is no longer the case. The rise of digital and the corresponding speed of technological changes creates an increasing pace of expectations/demands from customers, many of which are expectations set from their experience in other industries. This digital disruption also opens the door for new competition, like FinTech companies offering automated advice (Betterment, Wealthfront), peer to peer lending (LendingClub, Kickstarter), and payments (Xoom, Dwolla). These companies are entering the marketplace attempting to unbundle financial services offerings by delivering the high customer value services of the value chain. Because they are unencumbered by legacy challenges, they are able to anticipate and quickly responding to customer needs.
Traditional FS firms must realize that in the future, customer experience IS their product… and treat it that way. So what does this mean and how should they start?
First, they should organize around the customer rather than products or channels. This could mean reorganizing the management structure, which requires major REVOLUTION transformation, or more simply it could mean an EVOLUTION – building bridges between existing product and channel management structures to put the customer at the center. Either way, it will require an enterprise commitment and intentional strategy to shift from a product management mindset to a customer management approach.
What are the ‘bridges’ that can be built right now?
- Bridge 1 – Create the customer metrics and measurement systems, and incorporate these as shared goals across products and channels. Hold individual groups accountable against overall CX goals and metrics.
- Bridge 2 – Leverage data to create a shared view of the customer, and next gen analytics to anticipate and meet their needs.
- Bridge 3 – Get to know your customers utilizing all data aspects available – social media outcomes, complaints, reviews, and balancing with quantitative and qualitative research. Understand the moments that matter and focus on creating great experiences at those moments.
- Bridge 4 – Map your customer journeys across products and channels to define opportunities to deliver real, lasting value.
- Bridge 5 – Co-create with your customer. Build and scale agile processes that can deliver experiences and adjust more quickly to customer feedback.
- Bridge 6 – ‘Re-bundle’ products to address customer’s holistic financial needs and create value that cannot be disrupted by new mono-line entrants.
Of course, this is just the tip of the iceberg when it comes to aligning your FS organization with the customer experience you want to create. For a more in-depth look at creating a CX organization, you can also download our latest whitepaper, “Optimizing Your Customer Experience Focused Organization: An Actionable Guide.”
This post was co-authored by Matt Reger. Matt is vice president at North Highland and has deep financial services and wealth management experience. He specializes in customer experience, integrated marketing campaign planning & execution, multiple marketing channels, social media marketing tactics, and portal and content management systems.