Unlocking the insight to challenge traditional banking and drive transformation

Technology is profoundly changing customer experience and expectation, driving a new era for how banks communicate and relate to customers.

Fintech start-ups and challenger banks are taking the lead when it comes to harnessing the power of data and insight. They are redefining the financial services landscape, and syphoning off attractive higher margin business, by being more in tune with customer needs than their established competitors.

Incumbent players are in a game of catch-up, hindered by legacy systems, and slow-moving governance and decision making structures.

How can they keep pace with the lightning speed and responsiveness of their new peers?

The answer – by unlocking the insight that will help them challenge their traditional banking mentality and drive customer experience transformation.

Old goals, new expectations

Banks have faced conflicting challenges since the 2008 financial crisis. On the one hand governments and regulators require them to build their capital reserves and lend responsibly.

On the other hand, banks are criticised for not lending enough, particularly to small businesses, in an effort to kick start the economy. Amidst all this, banks are trying to grow their lending and deposit books, win new business, retain customers and manage risk.

True, many of these objectives are the same as they have always been, but at a time when banks are under pressure to perform and competition is fierce, they are also grappling with the changing customer expectation in the business banking landscape. Here’s what we know to be true:

  • Business customers have access to more information than ever before
  • Customer relationships will become more transient as regulators seek to make it easier for them to switch and savvy customers are increasingly using multiple financial services providers
  • Customers expect more openness and transparency
  • Customers care more about experience than product
  • Customers expect banks to actively engage with them, answer their questions, solve their problems and proactively give them financial advice that makes their lives easier
  • Customers want a personalised experience with relevant and resonant communications

Why insight holds the answers

If your customers have more access to information, then give them the information they want. From the moment a potential client starts researching your bank and the products and services you offer, you must demonstrate that you have a deep understanding about the types of information they want to receive.

Being customer-curious and harnessing insight will help you tailor your response around what is happening in their industry and ecosystem.

This in turn will enable you to suggest products and services most responsive to their needs. You must start building a relationship from first click.

If customers are more transient, engage with them in new ways to keep them interested. Research shows continuing customer churn in the banking sector with customers switching, in whole or part, to other providers in response to poor experience.

Increasingly savvy business customers are turning to new entrants for higher value financial products such as foreign transactions, currency exchange and loans, which risks the incumbent banks being left with the traditional, but lower margin, lines of business.

Studies also clearly show that engaged customers are loyal customers, with as many as 71% saying they will stay with their bank for life! But they don’t want needless communication.

Insight enables you to stay on top of the issues that matter to them and establish a two-way relationship highlighted with regular, timely and relevant engagement.

If customers expect transparency, then demonstrate trust and eminence. You’ll never win a new customer or sell additional products to an existing one without trust.

This means being open, giving them the information they need to truly understand what your bank stands for, what they can expect from you, why your goals are compatible with theirs and how to best utilise your products and services.

Demonstrating market knowledge and eminence by sharing insights and thought-provoking content makes every touch point relevant and resonant. You’ll gradually build credibility as a trusted advisor and demonstrate you are on the same team.

If customers care more about experience than product, then make each customer feel like an individual not a transaction. 88% of customers prefer doing business with a company that offers quality customer service over a company that has the latest and most innovative products. The banking world is full of great products, but the challenge of differentiation is about generating value beyond this.

Customer experience is the new frontier and you are not just competing with other banks, you are competing with the likes of Amazon, who have set the experience bar. Great customer experience starts with insight – get into their head space, be curious, strive to continually learn more about them, listen when they speak and harvest conversations and opinions about what they need.

Then, translate this into meaningful, contextualised and empathetic opportunities for two-way engagement.

If customers want you to actively engage, then contribute to the discussion. Your customers are social creatures and they expect you to be the same – they want a mutual exchange of views and ideas. 

Abstaining from the discussion is a massive lost opportunity to learn more about your customers through conversational interaction.

Collect market insights and combine this with what you know about customers based on their spending behaviours to answer their burning questions, deliver advice that will make their lives easier and demonstrate that you are responsive to their needs.

If customers want a personalised approach, then stop being generic. Just as banks have legacy systems, they also retain legacy thinking.

The rules of engagement are now governed by the customer – they don’t want to be forced along a pipeline and they are turned off by mass generic broadcasting.

Banks are in a unique position, with access to more information about your customers than perhaps any other sector.

Combine this with the vast amount of data and insight about what is happening in your customers’ wider ecosystems and possibilities to personalise interactions are immense, and rewards handsome.

MetroBank are transforming traditional banking. Their success is down to enhancing the customer experience and embracing new technologies. Read the MetroBank success story here.