Banking Review

Touchdown on touch points

No matter how you interact with customers – branches, call centres, online, mobile,
social networks or even tablets – customer analytics will help you engage and profit

BY MARIA SIT

It was encouraging to see that customer analytics was a key topic on the agenda for the Technology and Innovation stream at the recent Asian Banker Summit 2011 in Hong Kong.

Recognising that customer analytics is an important enabler for banks to create more relevant, engaging and ultimately profitable customer experiences, the discussions at the Summit stressed the urgency for banks to actively re-think their approach to interacting with customers in a landscape characterised by a proliferation of channels and touch points customers use. These channels and touch points include branches, call centres, online, mobile, tablet and social networks.

The picture drawn from the Summit is that most banks are struggling to both find and extract relevant data about their customers’ behaviour over time and then translate data into actionable insights for delivering relevant offers and services. The problem is not whether the banks have enough data on their customers; in most cases, they have more than what they need to drive appropriate actions. It’s how they use what they know that matters. To do this successfully, there are a myriad of organisational and cultural challenges that banks must consciously address.

A question of perspectives
The current organisational structure of many banks is arranged around product lines (eg. credit card versus wealth business) and specific channels (ie. branch versus remote). This setup doesn’t naturally lend itself to providing a holistic view of the customer relationship that can easily be shared across different divisions. This may be due to infrastructure disconnect (ie. legacy systems) or political motivations. The silos place limitations on even the most well-intentioned marketers to apply a truly customer-centric approach based on a holistic view of the bank-customer relationship for driving relevant, engaging and timely interactions with their customers.

The business drivers that underpin many marketing activities today are still highly centred on ‘how do we sell more?’, rather than ‘how can we help improve our customers’ net worth or make their lives easier?’

The sincere intent to move away from a product-centric and short-term approach to creating value for and from customers may be there, but the organisational structure and performance measures are not conducive to this shift in mindset and development of real customer experience competency. As Mike Smith, chief executive of ANZ said at the Summit, there is too much short-term decision-making in banks; a bank should be about long-term value, but there is tremendous pressure to generate short-term returns on a quarterly basis.

Bringing down the barriers
Despite the seemingly big barriers, there are strategies and tactics that can be adopted to progressively shift the landscape. Here are a few suggestions:

1.  Start modestly and see it as a journey Rome wasn’t built in a day.
Drawing on a range of quantitative and qualitative customer insights that you have access to, focus on understanding and improving areas of the customer journey that best represent high priority moments of truth (eg. complaints handling, on-boarding) and doing it well. Acting on customer analytics is one of the most pragmatic starting points for creating both the competency and culture of customer centricity. Analysis paralysis lurks in many organisations, so it’s important to allow room for continuous improvements and refinements over time. Make sure you measure the impact over time, treat it as a discipline and, importantly, communicate the results and lessons.

2.  Bring data to life to create     meaningful intelligence
Data visualisation is one of the recent buzz words used in our industry. But really, it’s a manifestation of a fundamental human condition – people are inherently lazy, at least cognitively speaking. This is an area many non-financial services firms (think firms like Mint.com) are outperforming banks on by translating customer data to actionable intelligence, and presenting it in a meaningful, digestible and engaging way. A recent example of this is HSBC’s Expat Explorer tool (http://www.expatexplorer.hsbc.com/) that brought to life the findings from its annual survey (see image).

This is a fantastic instance of how customer insights can be meaningful for both the target customers as well as for the bank concerned. Extending aspects of this concept internally may help engage, align and excite internal stakeholders to progressively develop and strengthen the processes and skills for leveraging on customer analytics to create value for both the customers and the bank in a sustainable way.

3.  Act with urgency but think long term Finally, there may be little you can do directly to remove some of the more ‘systemic’ barriers related to organisational structure and processes without top management’s explicit commitment. However cultural shifts can be cultivated in an organisation by staff that champion change and lead by example. The value of using customer analytics to create a differentiated customer experience that lives the brand promise can only be fairly evaluated over a long-term horizon, when the value of a customer is not measured by individual transactions, but in totality over the customer’s lifetime. Though the steps are progressive, they need to be carried out with a sense of urgency.

In an increasingly complex and dynamic multi-channel world, winning everlasting love from customers will become more challenging. Harnessing the power of customer analytics effectively is a strategic competency that needs to be a priority.

Maria Sit is the regional managing director of HeathWallace for Asia Pacific, a digital user experience consultancy that has extensive international experience working with the financial services industry.