Customer Satisfaction is the Holy Grail for bankers. Banks are commercial organizations that work for profit. The key to that profit is customer satisfaction. The cost of acquiring a new customer is high in comparison to cross-selling to an existing customer.
But how does a bank keep the customer happy and satisfied? A lot of focus has gone on to innovation in recent times. While that is important the other side namely make sure that the bank continues to do a good job of what it is already doing and keeps on making an improvement there as well.
As in many things a bank needs to do both – New things to attract more customers and to have more to offer to existing customers and make sure to not forget to renew what they already like.
Renew Banks tend to forget that they have customers because the customers already like what they are offering. In a tearing hurry to be a first to come up with something new, banks often cut down on what their customers like. For instance, while all customers’ young and old like internet banking, most of them also like the fact that your branches are everywhere and easily accessible late evenings when other banks are not open. This bank may lose out on customers if they cut back on late evening hours and instead offer a lot more on the internet and mobile channels.
Top amongst renew items:
- Maintaining existing systems and keeping them running: Banks have to spend a large amount on keeping their existing system up and running to keep on giving the service for which they have already built a reputation.
- Replacing existing systems with new ones (legacy with core banking for example): No system lasts forever. They eventually reach an end of life and are no longer supported even if some of them have been coded in-house. There is a constant need to replace systems often with better ones. At the same time, care needs to be taken that processes which are liked and wow customers are not tampered with except to make them even faster or better.
- Refining Processes: Automating, Reducing etc.: Over time processes become tedious, expensive and times consuming. Sales and Customer Service in particular need to be constantly updated to keep up new systems as well as with competitors who innovate.
- Re-platforming systems: Moving from old outdated and unsupported HW/SW to new ones (e.g. Replacing Windows XP etc) Same as 2?
- Security and cyber threats: Threats keep on increasing and there is a constant battle to keep on keeping the bank secure in the real and the cyberworld.
- Branding: The bank branding constantly needs to be updated to needs of the now and the future generation without losing relevance to its existing customers. Even existing customers like a bank which has an image of being modern and up to date.
- Existing customers: Ever too often a bank is tempting new customers with all kinds of freebies and goodies. If the existing customers do not get rewarded for their loyalty to the bank in equal measure they will be tempted with such offers from competitors.
A bank will need to renew its existing advantages constantly otherwise it will lose out to its competitors who will not stand still.
- Cloud and cloud applications, Subscription models etc.
- Mobile especially new mobile devices such as Glass, Watch etc
- New processes e.g. a single purchase or customer service processes for all channels instead of a different one for each channel.
- Big Data and Analytics
- Internet of Things
- Banking on new channels or apps such as Whatsapp Banking, Twitter Banking, etc.
- New Payment Systems such as ApplePay, Virtual Currency (Bitcoin etc). More importantly, the technology used in Bitcoin, for instance, has larger implications (public ledgers) for banks
- New Hardware and applications: Tablet Banking for the Bank Workforce
- Business models: Internet only bank, peer to peer lending etc.
- New Product: Social Products
- Machine Learning and automation
- Adopting Design Thinking
The world around is constantly changing. New inventions, innovations, business models, processes, and systems come up all the time. Any of them may have the potential to cause a major disruption and change the existing order of things overnight. A Bank will, therefore, have to keep abreast of all these and if it wants to be a leader it will have to actually be the first to come out with new things. Of course, quite of few will not turn out to be the ‘next big thing’, but ‘keeping up with the Jones’ is especially important as well otherwise today’s generation will go where they see the next thing for them. Who would have thought that the next generation car will be coming from Apple or Google? Apple has already disrupted the world of mobile phones by ‘killing’ the leaders Nokia and Blackberry in less than 5 years. And yet the GMs and the Toyotas of the world have to worry about them now and not the Volkswagen and the other Car manufacturers. It could be the same with banks.