Customer-centricity – what does it mean for banks?
Customer-centricity may be defined as ‘a way of banking based on trust and fairness that uses knowledge of customers to meet their needs and achieve sustainable, valuable, long-term relationships’. Food for thought in a region not always known for its focus on customer satisfaction in banking...
Boston Consulting Group’s (BCG) latest study, Customer-Centricity in Retail Banking, identifies three fairly common patterns of customer-centric banking that are emerging across regions and banks. These patterns are not rigidly defined or ‘set in stone’ but are based on observed commonalities in the value propositions of leading retail banks. BCG labels these three patterns as Retail, Guardian and Convenience.
Banks that take a retail approach to customer-centricity focus on creating a comfortable and enjoyable banking experience. Marketing efforts concentrate on the emotional benefits of joining and on the way the bank delivers highly personalised, friendly service. “We’re just like you and we are here to help,” might be an appropriate marketing slogan. The bank strives to be perceived as rooted in the local community, a positive contributor to society, and able to help customers find the financial products and services they need in a very supportive way. Strong governance and meticulous tracking of customer satisfaction are critical to success with this approach.
Guardian: Banks that take a guardian approach concentrate on building deep relationships by focussing on clients’ long-term financial needs and aspirations. These banks strive to be known for putting the customer first through honest advice, full transparency on all charges and fees, and an ability to offer the most suitable products for different life stages – while actively advising against unsuitable products even if the bank might benefit from selling them. These banks also embrace pricing linked to the customer’s loyalty and long-term value. To succeed with this approach, banks need both hard and soft enablers –such as strong IT and data capture that offer a holistic view of each client and a strong ‘customer DNA’ culture.
Convenience: Banks that take a convenience approach work on providing an accessible, easy, and fast experience. All channels – branch, call centre, online, mobile and ATM – foster natural pathways for customers to carry out research, choose products, make enquiries, and resolve problems. Products are easy to understand, select and use. The hallmark here is rapid, efficient and error-free execution. To succeed with this approach banks need very strong IT and operations functions that provide an aggregated, consistent overview of customer information. They also need an integrated and flexible systems landscape as well as strong end-to-end processes.
These three patterns are not mutually exclusive but, BCG points out, it is better to strive to be strong in one pattern rather than mediocre in two! The patterns can serve as reference points in helping banks ensure a consistent customer-centric proposition. Note that priorities vary by client segment.
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