THE BLOG

Financial Service Companies Drive Value With a Holistic View of the Customer

23/12/2013 12:29 GMT | Updated 19/02/2014 10:59 GMT

The global banking and financial services industry is facing unprecedented, historic challenges. With customer and regulatory demands soaring while revenues plateau, financial services enterprises (FSEs) cannot simply tinker with existing processes for incremental boosts in revenue or small cost reductions.

Banks now have transformational tools at their fingertips: mobile, social, analytics and cloud (SMAC) technologies. These powerful tools allow executives to increase revenue, improve products and services, expand market share, and achieve what we call 'bending the curve,' or nonlinear revenue growth. Banks that effectively use SMAC technologies to better understand and serve their customers are emerging as leaders in the industry, and will continue to gain a competitive advantage in the market.

Social, Mobile, Analytics and Cloud Transform Customer Insights

Let's examine precisely how FSEs can implement SMAC technologies to bend the curve and improve their bottom line. The first step is to understand that fundamentally, these technologies allow banks to gain a more holistic view of customers. Here's how:

  • Social media helps banks engage customers on a more personal level and gain insights into a customer's likes, dislikes, habits and whereabouts. Through social media, FSEs can deliver more targeted messages and provide individual support ultimately boosting customer loyalty.

  • Mobile technology allows customers to engage in transactions anywhere, anytime - increasing convenience for them and reducing branch costs for FSEs, but also lending insights into customers' on-the-go habits and preferences.

  • Applying data analytics technology to crunch the trove of data gathered from customers' social and mobile behavior allows banks to gain a more granular understanding of their customers' preferences, and serve customers based on these insights.

  • Cloud technology provides the platform and infrastructure to deliver customized technology and services in real time. Leveraging cloud technology allows FSEs to collect and deliver data anywhere, anytime, at a global scale.

The Multiplier Effect

The real power of social, mobile, analytics and cloud technology emerges when the four technologies are used together, giving FSEs an unprecedented 360 degree view of each customer. For example, the data generated by users' social media postings can be coupled with location-based data from their mobile devices, which can in turn be analysed in real time on a virtual cloud platform. The explosion of data and analytics technology allow FSEs to store, manipulate and analyse greater volumes of data and extract meaningful insights about customers' preferences.

Combining SMAC technology into an integrated approach transforms a bank's ability to understand and meet its customers' needs. This comprehensive view of the customer can be used to effectively engage existing and potential customers through tailored marketing strategies. Services and products can be presented based on a customer's preference and individual sales and marketing strategies will help banks target different customers for easy mobile deposits, mortgage loans, a small business loans, etc.

Ultimately, this detailed, 360° customer view made possible through SMAC technologies can improve the loyalty of existing customers, help banks engage these customers in new services, and increase the market share for banks by attracting new customers.

Overcoming the challenges of implementation

The challenge many FSEs face is that even though they may have a mobile banking platform and a social media programme in place, the technologies remain in silos, obscuring the holistic view of the customer.

The fundamental question for banks of all sizes is how to achieve the multiplier effect and gain a detailed, holistic view of their customers. Below are steps we have found are fruitful starting points for FSEs to integrate and use SMAC technologies to achieve the multiplier effect.

  • Make the most out of the 'easy data': make sure you are maximizing each opportunity to gather insights about your customers. Think in terms of the available background on customers from interactions and channels. For example, when setting up a new customer, configure your back end system so the customer interface is easy to use and captures data effectively. Ensure the data follows the customer, so if a customer has completed a credit card application, she does not need to provide the same information for a mortgage loan.

  • Rethink customer service: Consider what types of end to end services can engage a customer and improve their experience. For example a banking customer is having trouble processing an on-line transaction. A truly integrated SMAC approach would let the customer dial into the call centre, and the client services person should be able to see exactly where the client is with the on-line transaction and help process it.

  • Challenge the norm: Continuously think about how you can develop services, products and experiences based on the insight gleaned about your customers' preferences. Bring internal teams together and consider involving a specialized partner to share best practices from other institutions. Understand where you are today in leveraging SMAC technology to gain a comprehensive view of your customers and prioritize where you want to deliver tailored services. The outcome of these discussions should lead to agreement on steps that enable an eventual implementation.

FSEs that utilise SMAC technology to gain a holistic 360 degree view of their customers are ahead of the industry with increased market share, and are bending the curve through nonlinear growth. The landscape of SMAC technology is emerging and growing, and FSEs that stay ahead of the curve will understand how to develop and maintain strong relationships with their customers by delivering better and more contextualized, customized, relevant services.