If financial institutions are to meet, let alone exceed, evolving customer expectations, they will need to challenge their traditional business models. There are valuable lessons that the banking industry can learn from the retail sector as they seek to develop new customer-centric services writes Sonny Singh
Over the past year, we have seen a flurry of statistics emerge about how and where shoppers spend their money. With smartphones and tablets now almost ubiquitous in developed countries, it has become crystal clear that consumers increasingly expect – and take for granted – that they can shop easily using any of their connected technologies, and seamlessly integrate digital retail with in-store shopping experiences.
A recent study by Ebay points to an increase in the amount of European consumers that practice multi-channel shopping. According to the report, 31% of UK and German consumers practice "showrooming", preferring to see items in-store before purchasing them online.
The study also revealed that even more shoppers (34%) prefer "webrooming," browsing for products online before going to a physical store to make a purchase.
We’re also experiencing an explosion in mobile channel use, especially among millenniums -a statistic that is sure to make financial institutions envious. PwC recently found that the use of mobiles for online shopping has gone up by 46%, and that the use of tablets has risen by 56%.
What lessons do these retail realities have for banks and their approach to the customer experience? The implications are profound and can be transformative for banks that are prepared for change.
Go deeper with GlobalData
"Have it your way" is the expectation, not the exception
Multiple channel retailing is no longer an option – it is a necessity. The next wave of innovation in this space, and one in which many retail organizations excel, is the omni-channel experience that allows customers to move seamlessly and at-will between retail channels – often leveraging multiple channels simultaneously to enjoy the best shopping experience.
While most banks have adopted a multi-channel strategy, few deliver the seamless experience that customers have come to expect in the retail sector. Old operational culprits continue to haunt many institutions – at the top of this list is a lack of customer insight and the inability to develop a single and comprehensive view of each customer due to stove-piped legacy environments. Banks that move past these old systems and master the omni-channel shopping experience stand to set themselves apart from less agile institutions.
Get to know the customer
The best retail organisations know what their customers want and need – sometimes even before they share this information. Consumers expect that during their online or mobile experience they will be presented with products that are relevant to them based on their browsing history or previous purchases. For example, when buying a camera online, a shopper expects to see options for carrying cases or replacement lenses.
In addition, many e-commerce sites are very adept at displaying recently browsed items when a customer returns to a site, ensuring experience continuity and focusing marketing efforts with improved precision. In the same way, brick and mortar stores can offer customers highly personalised offers at the point of sale and via e-mail or mobile marketing to drive immediate purchases and return visits.
Financial institutions should also focus on getting to know their customers and delivering highly personalized experiences. When one considers the sheer volume and diversity of customer and transactional data that they capture from across their enterprises, these organisations are ideally suited to deliver this personalization due to the volume and diversity of.
To add to this, external channels, such as social media networks, offer the opportunity to capture richer data, for example insight into life events that may drive financial purchases – such as moving homes, marriage, having children, and changing jobs. For financial institutions, the ability to manage and analyse both internal and external data is essential if they wish to achieve new levels of customer intimacy that will help them engage more people.
Despite this, many of these organisations today are struggling in this area. In a recent Oracle-sponsored study, "From Overload to Impact: An Industry Scorecard on Big Data Business Challenges," 25% of financial services executives gave their organization a "D" or "F" rating in terms preparedness to manage the data deluge in the digital era. 56% of responses awarded their organizations a "C" grade or lower. In fact, only three percent of executives gave their organisation an "A" rating in this category.
Make it easy
The truth is that consumers are busy – pulled between a growing number of family, career, and personal commitments. Therefore, they want to transact quickly and easily. This holds particularly true when it comes to purchasing financial services and products – an activity that is not generally considered very enjoyable by most individuals.
For financial organisations, making it easier for customers to get all the information they need about a product easily and in one place (whether in a branch, over the phone, or via a connected device) means they can complete their transactions quickly which can go a long way towards improving customer receptivity and loyalty. Offering customers the option to effectively compare product specifications and costs, and to identify what products are best-suited to their specific needs is also essential.
To add to this, customers expect the freedom and flexibility to work on an application or manage their accounts just as easily on multiple platforms, and are increasingly eager to access end-to-end financial services – from the moment they open their account to the point at which they clos it – via online and mobile channels. To bring this reality to life, financial services organisations require flexible, scalable modern platforms and applications that support this exceptional level of agility.
With this in mind, as financial institutions work to not only meet, but exceed, evolving customer expectations, they will need to challenge traditional business models. The retail industry – and its leading-edge approach to customer experience – can teach them valuable lessons and inspire them to develop new customer-centric services.
These businesses have innovated this space by showing us that fundamental to the success of any customer experience initiative are a strong organisational commitment, a willingness to think creatively with the customer’s concerns needs held above all else, and an agile and robust architecture that supports flawless execution of customer-focused services.
Sonny Singh is senior vice president and general manager, Financial Services Global Business Unit, Oracle.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData
