The relationship between banks and their customers has been dealt a large blow by the credit crisis, bonus disputes and bailouts. It is imperative that banks deepen their understanding of their customers in order to rebuild some of the lost trust, improve retention and drive profitable revenue growth, writes Richard Fraser
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It was little surprise that research from Ernst & Young research found that 45% of European and 56% of UK customers reported that the financial crisis had a negative or very negative effect on their trust of the banking industry.
Financial institutions often have difficulty answering two simple but critically important questions.:
Do I know my customer well enough to understand the entirety of their relationship with my organisation, and how do I effectively service my customer while providing them with product and service offerings specific to their requirements, delivered through their channel of choice?
Today, almost every bank is battling with siloed processing environments, with customer information dispersed across the enterprise. According to Tower Group, 50% of enterprises separately maintain master data in 11 or more systems.
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By GlobalDataThis leads to inefficiencies which have the capability of irritating existing customers at precisely the time banks should be providing improved service and rebuilding relationships. Examples range from customer statements being sent to wrong addresses and missed cross-sell opportunities through to inaccurate compliance reports.
Financial institutions which have the ability to capture, analyse, and draw meaningful insight from customer data spread across multiple systems, platforms and countries can address this customer challenge.
Gartner believes "the ability to create, maintain and leverage a single, trusted, shareable version of customer master data is increasingly seen as an essential requirement in commercial and non-commercial organisations to support business processes and business decision making."
Customer Relationship Management (CRM) solutions have helped improve the customer experience but have not totally delivered the single customer view. The next step is a business strategy for customer information management.
The management of aggregated customer information across the enterprise is the foundation for rebuilding customer relationships to optimise sales and revenue generation, delivering a single, 360 degree holistic customer view for improved service across all operational business processes and customer touch points, and proactively offering market-driven products and packages to retain existing customers and attract new customers.
Many financial organisations have acknowledged that implementing a new approach to customer data strategies will provide the desired traction to improve customer relationships and thus improve organic growth.
In spite of economic uncertainty, there is a critical need to invest in customer information management technology that supports the introduction of new functionality to realise immediate business benefits while co-existing with legacy systems.
Managing customer data across the enterprise
Today, a banking customer can easily have three or four different accounts, including credit cards. Without customer data management in place, multiple sets of data will typically exist for each customer.
Enterprise customer data management provides capabilities beyond a banks typical customer information system.
Serving as an enterprise repository, critical capabilities include party management (centralised management of demographics and other information for any customer, prospect, organisation and other related party entities), relationship management (centralised management of all relationships among any and all related parties across the financial enterprise), name and communication management (centralised management of all points of contact and preferences for communication method), and a complete view of the products and accounts across the systems on which they reside.
Aggregated customer data can drive targeted customer interactions, enable better cross-selling and facilitate customer-focused decision making. However, this is only part of the story. The quality of data is equally important.
When customer information is changed, those changes need to be made on every instance of this data irrespective of where it resides within the organisations computing environment. A robust publishing architecture ensures data integrity and consistent information across all channels.
Customer changes of address, for example, are often a customer-servicing headache. Customers rightly expect that a change given to one branch or department will automatically be updated for all their accounts.
With customer data management in place, the address change can be made in an enterprise customer system and immediately published throughout the organisation, eliminating the not inconsiderable cost of manually updating the address on multiple systems while preserving the customer servicing relationship.
Improved data quality can also help address privacy management, know your customer and critical risk and compliance issues. Increasingly, new regulations are requiring data aggregation across the enterprise. Data collection, matching, and cleansing can be an onerous process, both in terms of time and money.
By taking control of initial source data, banks can reduce the costly process of meeting frequently changing regulatory requirements. Enterprise customer management enables collection of mandatory data, supports approval and version control, identification of potential duplicate records, and adaptors to specify user-defined validations.
Delivering value in a competitive market
Customer data directly impacts the effectiveness of financial services organisations daily and customer data management needs are evolving rapidly. A strategic enterprise customer management solution addresses the requirements for achieving both short-term and long-term business goals.
It enables financial institutions to move beyond the silos of the existing customer information management systems and improve their customer service, marketing, and identification of cross sell opportunities with customers and prospects.
Successful financial services institutions will aggressively pursue customer data management to address immediate business needs, whether the issue is business continuity, organic growth, marketing and sales, operational efficiency or strategic customer relationship management.
By focussing on a specific issue, utilising a component approach for ease of implementation, and rapidly delivering business value, organisations who improve their customer information management will be better positioned to rebuild customer trust and lay the foundation for a renewed customer-focused banking experience.
