Last week, looking at the changes that will characterise 2013 for retail banks, I stressed the importance of the customer view.
Retail banking customers generate data every time they interact with their banks, and banks can take – or miss – the opportunity to weave that data into a cohesive picture.
The digital age has brought massively more customer interaction, but it has also changed the character of that interaction. This makes banking in the digital age very different from anything we have seen before. The retail sector highlights the dangers of failing to go with the digital flow – the 21st century has seen giants of high street retail, among them Blockbuster, Borders, Woolworths and HMV, struggle to adapt.
Mobility is rightly identified as a key element in the transition to digital services. But in the digital age, we interact more often with our banks through multiple channels. For many customers in mature markets, the days of regular branch visits are gone. A customer may not see the inside of a branch for months – or even years – while interacting with the bank every day digitally.
What’s more, the percentage of customers planning to switch banks grew in 2012 from 7% to 12% worldwide. Customers are using digital channels not only for banking, but to compare banking services, and look for alternatives. As such, the ability to understand, anticipate and offer what customers want is key to success in the digital world.
The demands of digital
To be effective, digital demands versatility. Contact may be by Internet chat or email, in a full-featured desktop browser or a dedicated mobile app. All those streams and more need to flow together. Banks comfortable with segments and silos will need to adjust fast to an age where every input needs to be equal.
Standard Bank, with representation in 39 countries, has integrated 20 million customer records across 41 internal systems – now it knows its customers, and can build for them and market to them more effectively.
Digital demands speed: customers expect to be able to access information and services immediately through digital channels. But those channels need to be able not just to fulfil their requests in real time but also respond to them appropriately before the end of their session.
Because digital demands personalisation – which means that customer service and customer retention are intimately connected to data management.
Digital excellence has many benefits – successful digital strategy could shrink branch footprints by 30% without compromising quality of service – but the customer is the ultimate measure of its success or failure.