Give Bank Customers Control

At SAS Institute's Better Management Live Conference in Las Vegas today Susan Landry, managing vice president of banking industry advisory services, spoke from "A Strategic Overview of the Financial Services Industry Today," compiled research by Gartner's financial analysts throughout the globe. Financial services companies (FSCs) spend more money on relationship-building technologies than do other types of companies. Many of those organizations can share success stories, but according to Gartner analysts, it's time for FSCs to start thinking about moving to the next level of CRM if they want to capture market share. From 1994 to 2000 there was a rapid decline in consumer satisfaction with the financial services industry, attributable to rip-and-replace acquisitions, the early days of CRM selling, ATM surcharges and other fees, and cost reduction. Satisfaction is on the rise again due to more rational integration, targeted marketing, fee rationalization, and reinvestment in the front office. But banks still have a lot to learn, particularly when it comes to channel integration strategies. When looking at past successes, people need to ask themselves if those companies were so poor in their customer services that it was relatively easy to turn around their image. "The going is getting tougher now. Getting that next breakthrough is going to be far more difficult," Landry said. "When we talk about customer value and customer relevancy, we think about our products, profits, and productivity. Value isn't all about us. Let's turn the table and see how customers see our value, our relationships." An industry trends survey of financial services CEOs found that M&As no longer top the list of what they find most important. In fact, that area ranked last, whereas five years ago it used to rank first. This year, attracting and retaining loyal customers ranked first, though increasing market share came in second. Other areas of importance included balancing short-term goals with longterm strategy, improving productivity, responding to regulatory changes, attracting skilled workers, building a responsive, flexible organization, using technology for competitive advantage, managing risk on an enterprise basis, and focusing on core competencies. "Mergers and acquisitions are no longer the primary growth strategy," Landry said. "Quarterly performance is still top of mind, but in order to drive sustainable organic growth, they have to hold true to longer-term strategy, which bodes well for our industry. "There's a big difference between delivering rock solid customer service and delivering intimacy," Landry said. "Customer intimacy is about customer personalization. Customer service is more about operation excellence." The problem might be in how these companies are defining intimacy. Ninety-three percent of banks say their brand conveys a sense of customer intimacy to the market, compared to 7 percent for operational excellence, and none for product innovation. Yet they only devote 33 percent of their resources to customer intimacy, 36 percent for operational excellence, and 14 percent for products. Though self-service is increasing, it has not grown as fast as expected because customers are seeking the multichannel touchpoints to enhance their experiences. One Gartner study showed that 48 percent of PC users had called a customer service rep in the past month looking to buy a product, solve a problem, or get advice. Although not many banks are at this stage yet, a good strategy might be to route the online banking customers to more sophisticated, highly trained call center teams, Landry suggested. "Information gathering on the customer alone is passive," Landry said. "Turn around and let the customer take control." Related articles: Financial Services Sites Offer Shoddy Service Private Banks Rate High in Customer Satisfaction