World around us it totally different than
what was 8 weeks back. On one hand, all countries are working tirelessly to
control the spread of Covid-19 and thus limit its ever-increasing and
far-reaching impact on their respective economies, and on the other, the very
countries have returned to the low interest environment, to fuel in the
economy, already reeling under.
All the lockdown, work from home, is
already putting pressure on banks to driver better self-service digital experience
for their customers. Thereby, hastening the speed of digital transformation at
the banks. Banks who are thinking to drive digital experience from front to
bank, will continue to survive and come out with flying colours. This would
mean, banks need to be nimbler in their systems and operations, agile in their
ability to respond to the customer’s requests, and in many cases anticipate the
requests beforehand, and deliver a curated experience. This could well lead to
complete self-service offerings through digital channels, where customers can
create their experiences, their pricing plans by themselves – based on what
they want and how they want, or better be, how much they are willing to pay or
commit to.
Such times will surely bring in more
regulation and compliance towards customer transparency and customer experience
delivery. This would lead banks to be more open with their customers in terms
of what is communicated, when is it communicated, and how is it communicated. Banks
will have to have automated processes of experience orchestration, which is not
just jazzy front-end channels, but more around product/service, pricing, offer
delivery. They should be able to deliver these on-demand and still maintain the
required levels of transparency and controls. The capacity to orchestrate such experiences
with compliance would segregate the best from the better.
For long, we have heard that data is the
key in today’s digital world. And guess what – banks have possibly the best
data on their customers – be it their demographic information or their
transaction data or their balance data. To top it, Open Banking adds to such already
existing data, as now you can even get information on your customer’s balances,
transactions with the competition next door. Leveraging this huge amount of
data to your advantage is the key. Using such data to create targeted
campaigns, offers, pricing, potentially using the data to change or drive the
customer behaviour, is going to deepen customer relationships, drive loyalty
and delivery sustainable value for both the sides.
Such data can be used to create
personalised curated offers for the customer. If we can link up the household
or any such network/group, we may hit a gold rush. Imagine, a bank being able
to draw in funds from the entire household, by giving a personalised pricing
across the household. Banks also have one of the biggest intangible assets with
them – their customer’s trust! Envision the power of data leading to targeted
offerings, enhancing the customer’s experience and thereby their trust in the
bank!
A micro-segment (to the segment of one) targeted
approach where the special pricing and offer is linked to the profitability and
propensity to accept the offer, could be a game changer in these tough times. Customers
get what they prefer or want, and banks get a more sustainable business for the
longer term. And this potentially creates a virtuous circle of deep
relationships and better revenues and profitability.
A bank in Asia, has been able to drive family-based
offers to link the funds and spending across the family. This has successfully
drove up the balances and card spend multi-x and has made the bank believe in
the delivery of curated experiences for their customers as the way forward for
their business.
Already the world over, the banks were being
forced to work on better customer outcomes, and that could mean foregoing fees
and delivery of better customer experiences. Such approach to banking would orchestrate
the paradigm shift from the high fee model to value-based model – wherein, you
charge the customer for the value you deliver. Value through what is being
delivered is what the customer wants, how he wants and when he wants, and thus
the customer is okay to pay for such value being delivered. This hyper-personalised,
per-customer approach, coupled with the data that banks already have, can
deliver the true customer experience the customers of today desire from their
banks.
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