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Doing, Stop Doing, Doing Something New: Understanding Customer Behaviour in Omni-Channel Environments

22-Apr-2015 15:30:00 Business insider Banking Finance Big data
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Retail Banking and Finance: Audit for Your Response to Customer Demands

Knowing who your customers are and what they want is the Holy Grail of many marketers and business stakeholders. Often at times we might think we know, but we couldn’t be more wrong. And if this wasn’t enough of a challenge in a traditional environment, we now face the pressure of needing extensive customer profiles in an omni-channel environment.

Subject to this challenge are many industry sectors, with the banking and finance world being one of them. Reports like the EY Report, Winning Through Customer Experience, and the Accenture report, The Digital Disruption in Banking, show what types of issues financial institution and banks face, issues that could be fatal to them if not addressed.

 Based on these reports, we can relate their findings to the experience we had at Radtac in the last 2 years with banking and finance clients. What is interesting to observe is how the findings translate to real examples struggling with those challenges, and what practical solutions can be applied to overcome them.

At Radtac, we work and have worked with some of the biggest players in banking and finance sector e.g. the UK major retail banks plus others across the EU. Additional report relevant clients include EY, Accenture, Deloitte and KPMG, as well as major payment systems businesses e.g. VISA. We have been heavily involved in omni-channel strategy development for clients who are undertaking that challenging journey, needing better use of big data and business intelligence (BI).

In the last two years these customers have experienced issues like the following ones:

  • Customer behaviour is driving disruption and the need for new services, and is all about seeking to make customers’ lives easier.
  • Customers are changing - if you don’t change, they will see you as just a transactional entity, not as a products and services provider. Hence, they will leave.
  • Focusing on customer needs will drive not only profitability but also brand value, which underpins shareholder value.
  • Developing brand value drives customer trust and working with customers drives advocacy.
  • Core to these value developments lies in using data and analytics to faster develop customer based service offerings.
  • Core to trust is also keeping that data safe. Customers will change providers in favor of ones which show information security is part of the institutions’ core.
  • Customers want organisations to use data to inform them of better products and choices in highly complex environments. Simplicity and transparency should be the centre of the organisations’ omni-channel approach to delivery.

To achieve these changes, banks and financial institutions need to be more responsive. This brings up challenges in areas like:

  • Risk and governance – how banks and financial institutions provide their customers with a better service and ensure that they don’t violate the institutions risk policies?
  • Culture and fear – recent issues in banks have driven a culture that is concerned about getting it wrong and not making mistakes, this turn has created a fear around engaging in new approaches to customer delivery.
  • Omni-channel – everyone talks about this but few really get what it means: from the simplicity of responsive design to the complexity of understanding which clients want which messages delivered in which ways.
  • Data and information – how can banks and financial institutions use the data that they have fast enough, in order to learn and adapt the best approach for offering products to their customers. Through best use of data, customers both enjoy and have a memorable experience with these products. Which builds trust. When your beliefs lead you to love and trust the brand, this creates a powerful interactive dynamic Which builds advocacy.

Customers are now telling their institutions exactly what they want and expect from them. Given this feedback, we need to ask ourselves - why does it take so long to react to it?

An audit is key to change. Only through being able to measure what you are doing and adapt what you are doing in the next piece of work, you can develop and improve. Audit facilitates understanding around:

  • Customer behaviour and response
  • Customer needs for additional support and information
  • Topics and areas of concern that are driving customer thinking and information gathering AHEAD of customer action

The first two points above are probably obvious, even if not undertaken enough by the institutions. What the third point highlights is the change in BI that is now a strong market focus.

  • If you are close to the customer you can predict their needs through understanding what is stimulating their information demand. Using lean principles, you can understand the product life cycle and develop those products that appeal most to the innovators and early adopters in the product life cycle.
  • If you can predict customer needs you can propose products and services they actually want to buy, so you sell what they want, not promote what you think they might need.
  • By improving the use of the data that you have, you can create a strategy that will enable in Crossing the Chasm
  • If you are not doing using the data appropriately, and understanding the value of it, then, as surveys show, you risk that the clients of today and those of tomorrow will leave you and join those enterprises that are providing them exactly those targeted and informed choices.

So if you are gathering BI, using audit tools to validate the information and driving that to inform better decision making, there will be a significant improvement to your customer loyalty, the institutions’ profitability, and to the brand value. Customers will now spend the bulk of their money with you instead of other providers.

Luckily issues like all the above ones can be tackled. The key is to be aware of them, address them by finding the right solutions, and finally inspect and adapt the outcome.

At Radtac, we have worked with various financial clients to provide workable solutions to their challenges. These have included:

  • Values Audit - evolving organisational culture starting with where you are today and establishing a clear vision of where you want to go, ensuring that the values and behaviours you state are those that the business focuses upon.

Picture 1: An example of how we use one tool across time to support and measure values change
  • Leadership Challenge and Development – in facing the brutal reality of competing issues like fear, risk and governance, Radtac enables the creation of the learning organisation through servant leadership.

Picture 2: The Culture Change Pyramid shows double loop learning and how to embed behavioural change
  • Feature Teams for value – developing teams within the institutions that take responsibility for end to end delivery of value, from concept to cash. “Doing, stop doing, doing something new” is the key phrase to be applied, by which we mean: do more of what works, stop doing what doesn’t work, try something new.

  • Innovation Incubators – to innovate, you need to have the right environment. Radtac has the proven ability to set these up for your context, drive their development and then bring that creativity into the mainstream of customer product and service delivery.

In conclusion the challenge for banks is to build additional value for customers through the appropriate use of data. Data only has value when the customer tells you the information and the knowledge it has imparted is applied by them to better decision making in their personal financial management. In the era of big data and business intelligence we really are sitting on the golden opportunity for the development of trust and advocacy. It remains to be seen whether the current retail banks can both adjust their cultures, as well as ways of working to provide a significantly enhanced service, or whether new entrants and their ways of working will beat them to it.

What are your thoughts on this topic? I would like to hear if you’ve experienced any of these challenges, especially if you are working within the banking or finance sector. Just use the comments box below to share your thoughts with us.

If you would like to know more about how Radtac can help you with addressing challenges like the ones described, by using solutions such as the above success-proven ones, enquire now and we will assess your needs together with you.

Author

Michael Short

Michael Short

In his 30-year career creating, funding and leading dynamic and commercially successful organisations in the pharmaceutical and medical industries, Michael has honed his talent for building highly beneficial strategic relationships. Since January 2011 he’s been leading the next phase of our growth, and came on board full time in May 2012. Here’s why: “We’ve successfully applied Radtac thinking in many industries – including plastics manufacture, marketing and advertising agencies, pharmaceuticals and biotech. “We’ve helped clients reduce costs and increase profitability ten-fold. As IT becomes central to much of what companies do, Radtac's breadth of experience is of its time for our clients.” Read more