Banking as an industry was one of the most thriving industries from the industrialization era or even before. It has been the cornerstone of many key transformational initiatives in the global economic construction. As a young lad, I would still remember me being taken to the bank, just to help me understand banking processes and meet the wonderful people that worked there. The typical mindset was that bankers were highly informed and influential people, a healthy relationship with them was but imminent. It was thus a relation built on a foundation of trust with fewer customers- largely local supported by cozy branches.
This industry was largely insulated from larger disruption and often fiercely protected by the country’s regulator. It is probably this protectionism that injected complacency. Banks grew to be more internally focused, driven by a set of factory like processes, supported by technology that manufactured products at a phenomenal pace. Customer progressively took a backseat in bank’s design of products and services, which was increasing driven by profit and other internal consideration.
Over the years this has changed, globalization has brought with it many new banks with vividly skilled bankers, robust stock markets that drove up banking stocks, financial technology companies that have simple means to disintermediate revenues in niche areas, technology platforms that have helped banks create newer complex products and services and digitalize operations, and also brought scale – laying the foundation to mass yet differentiated banking. Is this a new phenomenon that has taken banking off-guard, off course not, it is the pace at which it is happening and the support to the changes from regulators that has set the alarm bells ringing.
We often blame the fluid regulatory environment, the advent of fintechs and other external factors for increasing pressures on margin and profitability among banks. While that is partially correct, there are many levers within the bank’s locus of control that are often unused or abused. Some of such misadventures include -Organization structure and Lines of businesses being created to accommodate people’s growth aspirations and not synergy, Innovation being compartmentalized and localized to a team without an org-wide participation, New products and services often being conceptualized with internal and existing capabilities as constraints, mindless automation driving more complexity and escalated commitment, islands of excellence being created and nurtured without an pan organization view of future innovation and growth, KYC( Know Your Customer) being treated in an abject sense of regulatory requirement and not as a way to truly understand the customer, cross sell and up-sell targets that have but applied a lot of pressure on the integrity of the bank relationship managers leading to miss-sell without having to worry about being tracked and penalized for wrong actions. These are just some of the reasons for many of the self-inflicted injuries that banks have brought upon themselves, they certainly have impacted trust and created an experience deficit between them and the customer.
By now you would appreciate the fact that customer experience is not skin deep, it is driven by a nexus of forces and is in effect the summation of various interactions, transactions and engagement that a customer has been having with the bank. So the question is, is there a ready formula that banks can adapt in their path to Customer Experience (CX) transformation? Unfortunately NOT, every bank today needs to bear its own cross on its path to superior customer experience. However, what I call the Beatitudes of CX transformation can be those sign boards or golden rules that can help in providing some guidance
Beatitudes of CX Transformation
- Reinvent the banking design point – do not be constrained
- Lay eyes on the matrices – to define and gauge success
- Get the data foundation right and a construct to glen insights
- Let your employees be your ambassadors of change
- Resist the temptation of incremental market adjustments
- Chart the customer journey and set a feedback loop with real customers
- Create trusted partnerships and avoid transactional relationships
- Look beyond your industry
Listing of each one of these beatitudes is a result of my experience working with clients across the globe in my own journey as a consultant and have real stories attached with them, that I would love to share. Stay connected as I write on each one of these – giving my humble view of what these mean, how we get it right, what are the methods that banks can employ and what are the pitfalls one need to be aware of.
Do feel free to share your experiences that can enrich the unfolding story…