Alastair Majury Business Analyst
Retail Banking - A New Way For Customer Service
Since the rumbles begin to fade it's apparent that the retail banking business has been through exceptionally tumultuous times. The longstanding contract between banks and their retail clients was crushed.
Those of us that are long in the tooth recall the long gone branch Bank Manager whose steadiness represented the reliability of their lender, and also the long-term trust that his customers placed together. It truly was 'relationship banking' - construction and retaining engaged customers using face to face contact.
We've seen enormous job losses and large changes to the branch structures already but have yet to observe the regulatory structural effects from the current turmoil. What is as clear as day is that we will continue to view flatter organisational structures.
Retail banking has witnessed the technology-enabled hurry to provide customers with services at less cost - and this trend will continue. Can your bank see that the technology can - if harnessed properly and combined to great strategic moves - additionally help in rebuilding this crucial engagement with your clients?
In contrast to the cost cutting strategy your clients need your bank to be faster and more flexible in your own interactions. They wish to have the ability to let you know how they want to get solutions, and what types of services people should be, rather than being managed down a systematised straightjacket of stiff processes.
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Their needs will probably change - and change is happening faster than ever - because the speed of development of the enabling technology shows no sign of slacking. Significantly, the price of hardware, software and communications is also falling extending the range of technologies to classes who were out its reach so opening up further opportunities.
The 'bleeding edge' of the is the rapid increase in mobile programs and the effect of on-line Social Media. Customers talk about your lender on their terms and in their choice of websites. Yes, social networking is growing in influence as an advertising medium, but it's the interaction that will grow to be the secret to building those very long term relationships. Research has indicated that your customers would prefer this on-line discussion space to be provided by your bank so that their views could be more surely heard - and responses provided.
Another setback to banks' fortunes is that the loss of trust in individual banks means that customers now tend to spread their financial activity over a wider set of suppliers. This puts immediate pressure on your operating margins and has already signalled the demise of 'free banking'.
If the retail banks are not careful about the way they move forward you could easily become merely 'white label' money transactors.
So how can this embattled industry begin to make sense of the new world order - and make a profit too? All marketers know the truism that it is far more effective for both parties to sell more products to an existing customer, so a clear strategy is needed to underpin the rebuilding of your customers' confidence and a path to gain is required to sustain your company over the very long term.
The solution lies well within your grasp and can be together with your engaged clients, not with inner management introspection. It's these valuable people who hold the key and know what's wanted. By finding out what pushes their involvement together and then mobilising your banking abilities to provide it in an attractive and cost effective way you'll be able to rebuild that bond of confidence. You may use it to find more customers to whom you can provide services effectively and at lower cost.
This will lead to flexible customer segmentation. A segmentation that could adapt to a client's current wants and empower different services as these needs change with time. You may just handle this by a regular, vigilant and pro-active review of changing customers' requirements with time.
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