The industry is going through unprecedented change, trust in traditional providers is at an all-time low following the financial crisis. At the same time, the number of new market entrants is set to increase this year as more businesses see an opportunity to challenge current incumbents. Lastly, technology is upping the rate of innovation, allowing the ability to offer new products and services to customers.
Challenger banks aren’t disrupting the market, it’s customers of traditional banks that are demanding new connected products and services
Starling Bank’s mission is to integrate their services in to their customer’s lives. A subtle but important difference to how banking used to be which was much more a ‘build it and they will come’ mentality. For instance, their efficient and modern payments platform allows them to offer no transaction fees when customers use their card abroad, a reason why regular travellers will likely flock to their service when it goes mainstream later this year. Starling and other challenger banks like them are gaining a foothold because they start with the simple premise, ‘What does the customer need?’ It matters now more than ever to be responsive to the growing demands of banking customers otherwise they will simply move elsewhere. However, there is acknowledgement within the traditional banking community that more needs to be done to improve the customer experience, one senior executive at HSBC Group said recently, ‘Our customers are digital so we have to be to meet their needs.’ Fair enough.
Learn the lessons from other industries
It makes sense, in an industry where providing financial services is quickly becoming commoditized, the only way to differentiate is on customer service. Take for instance, the holiday industry, for decades this has long been differentiating on customer value, it’s easy to switch and a bad review will go viral taking time to recover lost reputation. Today high net worth customers are just as likely to opt for a challenger or boutique holiday company because they can more readily meet their exacting needs over a larger more mainstream and traditional holiday company. Traditional banks should look at the lessons other industries have had to learn going through similar disruption…
Whatever the industry, at the heart of successful companies is an effective and efficiently run operation. Those ‘key moments’ for your customer are supported by the notion that an organization can instinctively know what it can and cannot do to help their customers when they need it most. But with a well-run operation those ‘acts of kindness’ will happen more regularly and consistently across your customer base. Consistency is the key word here as it’s delivering the same high service day in day out that will turn those few advocates in to a group and then a community of loyal fans for your company. Before too long net promoter scores and revenues will be on the rise as you will hang on to those hard fought for customers.
If it were easy every bank would be responsive already
However, we know if it were that simple every bank would now be running with the same blueprint and have loyal and content customers. Established banks have to deal with organizational complexity, the many different touch points a customer might have and the fact no one business group has end-to-end ownership of the customer journey. Systems need integrating too, so one can see a single view of the customer. Bizagi have worked with many banks across the globe who are looking to transform their customer experience as a source of competitive advantage. Take Old Mutual for instance. Their systems were disconnected so they had no single view of the customer, business operated in silos. As a consequence advisors were unable to serve their customers in a timely and effective way. Working with Bizagi they have increased net promoter scores, improved point of resolution and customer on-boarding time has been reduced dramatically.
Where to start?
Success starts with having a clear vision of what you are trying to achieve and that you can measure the impact (current state and future desired state). It helps to have a senior executive champion the change too and that this becomes their soul focus to make the change stick. Unlocking competing challenges between departments is also key to seeing the project continue to gain momentum. And lastly, in the beginning celebrate any success no matter how small. Some of what needs to change cannot be measured in terms of financial return, common sense says if you provide a better customer experience customers will be happier and more will opt for your services. Leaders also need to empower teams to get on and execute and achieve gains wherever possible ensuring pressure starts to build behind changing rather than maintaining the status quo.
If you want to find out more about how to become a responsive bank please download our eBook, ‘Become the Responsive Bank’ today.