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Precision Banking: Key To Financial Services Success?

by internationalbanker

By Andrew Lawson, UK Managing Director, Salesforce

Of all the industries, it’s probably financial services that get the most attention from the public. After all, these institutions are part of our day-to-day life, and as a collective, can be a huge boon or bane to the UK overall. That’s why reforms to the banking landscape and their effects on financial services organisations – positive or negative – shouldn’t be underestimated. 

Chancellor George Osborne’s moves in the Summer Budget 2015 to reduce the bank levy were well-received by many of the bigger banks with large overseas operations, and UK business generally. Of course, not everyone’s happy – some commentators have said that the new surcharge on bank profits is a ‘tax raid’ on the industry. Anthony Browne, chief executive of the British Bankers’ Association, expects the changes to increase banks’ tax burden by nearly £2bn and undermine competition by making it harder for smaller players to break through and challenge larger banks.

But I would argue that however you choose to view the Budget, the outcome shouldn’t distract us from the bigger picture: it’s the processes, not the tax system, that’s creating incredible inefficiencies in an industry best-positioned to make the most of windfalls, both in terms of money and in terms of customer loyalty.

Currently, fragmentation and lack of automation, including fractured product lines, toggling in and out of siloed systems, and dealing with paper processes, are affecting the industry’s ability to create a more positive experience for customers. Customer loyalty has tarnished, and banks can’t bank on keeping customers for life anymore. They still deliver service that customers consider impersonal, unconnected, and product-centric when they’re demanding personalised, effortless experiences at any time, across any channel or device. And customers don’t want to wait for banks to get their internal systems together. 

 So what’s the master plan?

We have to reinvent banking from the ground up and rebuild banking platforms to build and maintain lasting customer relationships – and it needs to happen now, not in 2-3 years. The banking industry is sitting on a goldmine of customer data that could help them better focus on creating an ideal customer experience, by letting customers know when to act to maximise their accounts.
 
People today are ultra-connected, inherently well-informed, and inundated with choice. They don’t want to re-explain their story every time they contact a bank. They want the bank to be what it’s supposed to be – a trusted, safe place that understands finances, whether personal or business. Every customer wants seamless, fast service, proactive engagement and relevant offers. They don’t care about organisational silos; they’re looking for advice and to be guided through complex financial decisions by whichever department does it best, and they need staff to help them in real-time, wherever they are.

Basically, customers want precision banking. And they want it now. 
 
Precision Banking = Customer Satisfaction, Continued Loyalty

Salesforce research* found that 77 per cent of customers think banks are failing to meet their expectations, and 71 per cent feel their banking relationship is transactional rather than relationship-driven. Banks are failing to live up to expectations, but that doesn’t mean they’re failing to innovate – they’re just not innovating at the same pace as expectations are evolving. The pace of industry change means banks have to be agile enough to engage consumers in new ways and adapt processes that allow flexible, effortless, universal access – through any channel a customer feels most comfortable with.  

Precision banking creates personal and contextual service and offers a real-time, panoramic view of the customer – capturing micro moments from the customer’s profile, social media posts, location and credit rating – systems quickly analyse the data and then package it up to deliver precise actions to the customer wherever they are, however they want to be reached. 

For instance, a loyal customer might post on Facebook that they’re engaged and looking to buy a house. Systems can immediately notify the bank to proactively offer the customer a great mortgage rate via the mobile app. Then the customer puts their honeymoon purchase on their credit card; the bank can nudge them with an ‘existing customer’ deal to renew their travel insurance via email, text or social media.

By proactively suggesting what customers need, banks can promote the benefits of multiple products from the same bank. Essentially, they’re strengthening their relationship with the customer by stepping into the role of the life advisor, and making it more profitable; our research showed that moving a customer from one to four financial products increases the revenue that customer generates by 73 percent. 

George Osborne might be responsible for deciding the contents of the Budget, but each year banks effectively lose billions of pounds by failing to listen and respond to buying signals. It’s time to use technology to rebuild banking platforms to connect with customers in a whole new way, and move from a simple transactional relationship to one that improves customer satisfaction and retention. 

Banks must make it their mission to rescue the billions of pounds currently being left on the table by adopting flexible, customer-orientated platforms – and they need to make the shift to success now. 

Photo Accreditation: © altogetherfool

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