Banking on customer entricity

Topics: Bank, Customer, Customer service Pages: 16 (4959 words) Published: October 7, 2014
EMEA Banking Practice

Banking on
customer centricity
Transforming banks into customer-centric organizations

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Banking on customer
centricity
Transforming banks into customer-centric organizations

Around the world, ever more banking customers are feeling discomfort. They despair at terms of contract they cannot understand, are shocked by hidden costs, and bristle at sluggish complaints handling. Demonstrations on Wall Street and elsewhere around the world accusing the industry of greed and corruption have further shaken customer confidence.

To brush off these expressions of consumer sentiment as simply outliers or overexaggerations would be mistaken. Banks should see these signals as a call to action. What is needed is a fundamentally new direction – a business model that consistently puts the customer at the heart of all activities. Companies from other industries achieve huge success using dedicated customer centricity. Banks have the chance to not just enhance their customer satisfaction but achieve sustainable growth and above-average profitability by embarking on a customer-centric transformation.

Why customer centricity matters
Most banks have never created a close relationship with their retail customers and understand little of their actual needs. Tailored products and services are rare. Instead, complaints about inadequate advice, disproportionately high interest rates for overdrafts or call center issues surface in the news with depressing regularity. Customer resentment was already running high before the financial crisis. Since then, trust in banks has plummeted even further.

At the same time customers have found a new, loud mouthpiece in online forums and consumer portals. News about negative experiences can spread through these media like wildfire. Initiatives like the “Occupy Wall Street” movement have attracted media coverage as never before.

Banks realize that they can no longer afford to develop products and services without paying close attention to customer needs. It is already clear who will come out ahead: those banks that regain the trust as well as hearts and minds of their customers with target-specific offers. The future belongs to banks that give the customer center stage in their business model.

Banks spearheading the new approach
Financial institutions around the world have promised to focus on customer centricity following the financial crisis. The three whose models are described below stand for a growing number testifying to the shape that emerging customer centricity could take, whether Itau and Bank of America, Santander or Swedbank through to Mizuho and ANZ. Though each pursues a different approach, all aim at the same goal: giving the customer pride of place in their business.

ƒƒ Leveraging social media – Danske Bank. The Danish Danske Bank is demonstrating its commitment to be more engaging and transparent by leveraging crowdsourcing via social media to “become a better bank.” The initial focus Danske Bank chose was to use Facebook to ask how they could improve their mobile banking app. Their “Idebank” received 263 ideas, 185 comments, 3,110 votes, and trebled their fan base. This enthusiastic response was followed by a second initiative on mortgages and housing asking how the bank could make the application process

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easier. Instead of attempting to control its image in the social media – to which so many companies limit their role – Danske Bank sees the dialog as a vital contributor to developing its strategy. ƒƒ Redefining the branch concept – SNS Bank. In the Netherlands, SNS Bank has reorganized its branches into a network of advisory-focused, cashless banking shops that serve as a physical extension of the Web. Branches are store-like outlets, have open spaces, tablets that customers can use, and extended opening hours. The original function of a bank branch – depositing and withdrawing cash – has disappeared. Instead, the focus is on a...
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