Customer-centric Business Model in Banking

• Customer Management involves overseeing the connection between a company, its staff, and its customers, aligning with the business's plans.
• This ensures the procurement, growth, and retention of valuable clientele by understanding customer behavior and needs, and by enhancing customer satisfaction to foster loyalty.

Business Model Differences

• An organization should align how it manages its relationships, with its selected strategy and business model.
• It is essential that all departments operate in a customer-centric manner, not just marketing and customer management.

Characteristics comparison

Orientation

• Product-centric businesses focus on designing the best product
• Channel-centric businesses concentrate on offering the most channels for the product
• Customer-centric businesses work to solve customer problems

Marketing

• Product-centric organizations push via direct marketing
• Channel-centric organizations push via channel banners
• Customer-centric organizations use event & life-cycle triggers and product hierarchy within segments

Processes

• Product-centric organizations define processes product-by-product.
• Channel-centric organizations define processes by channel capability.
• Customer-centric organizations balance customisation and complexity through a matrix of actions and options

Organizational Structure

• Product-centric and Channel-centric organizations have rigid team silos, creating friction between teams
• Customer-centric organizations have cross-organizational teaming and low friction

Metrics

• Product-centric: profit and market sahre
• Channel-centric: costs & channel efficiency
• Mutual value is present in Customer-centric

Core competences

• Core capabilities a customer-centric retail bank needs:
• Managing relationships between people, organization, customers
• Gaining, growing, and keeping customers
• Understanding customer needs and behaviours
• Engaging customers or segments
• Optimising their satisfaction and developing trust.

Survey on customer centricity in marketing

• A 2014 survey of 500 global marketers revealed that 73% found client-centricity critical to success, yet only 14% believed this was a company hallmark, and only 11% felt customers agreed.
• Only 10% of senior marketers felt their organizations were highly capable of listening and responding to customer needs.
• 18% believed back-office tech platforms could deliver on marketing promises.
• 10% are confident in using data for insights.
• 20% have a good view of all the customer touchpoints.
• 28% personalize experiences online and offline.
• Many organizations struggle with the volume, variety, and speed of change, lacking effective segmentation and profiling capabilities.

Key roles within Customer-Centric Banks

• Proposition managers develop and manage bank propositions that fulfill customers' goals, solve problems, and provide necessary products and services.
• Empathy is key.
• Customer Insight Managers are essential as part of the Proposition Manager's team.
• Customer Analytics Teams construct customer segmentation models using data on behavior and value; they also monitor customer interactions.

Managing Bank Relationships

• A customer-centric strategy ensures employees operate differently than in product or sales-focused cultures, delivering mutual value through customer satisfaction and loyalty.
• Changes must occur in all levels
• Formal training, coaching, and language help build customer-centric cultures.
• From inward to outward looking is essential

Building Relationships

• Customer-centric banks create offers based on solving customer problems, not just individual products.
• Customer research, testing, and modeling is essential.
• The common barrier to customer-centricity is the lack of a customer-centric culture itself.

Treating Customers

• Banks need a 'code of conduct' based on research.
• Regulators push fairness in service and terms and conditions.
• Product terms 'small print' must be reasonable
• While all customers deserve fair treatment, there is no need to treat everyone equally.

Code of conduct

• A customer-centric bank must use its code of conduct to empower its customer-facing employees to show that it values the customer, treats them as an individual, and leaves them in control and that it respects customer feedback and complaints seriously.
• Employees should be empowered to make decisions within the boundaries, without management referrals.
• Customer-focused banks deliver services with reasonable care, maintaining accurate records of finances, providing services as promised, and within agreed timeframes.
• Easy & clear complain procedure

Sense of Urgency:

• Customers demand quick response and need to solve problems without frustration.
• Banks need to eliminate Friction
• Ensure all staff have a sense of urgency

Timeframes

• Respond to inquiries quickly (within 48 hrs)
• Notify customers of transactions instantly
• Provide easy ongoing access to account info
• No repeat of info

Valuable Customers get grow and kept

• A solid customer-centric strategy is a good bank move.
• Banks that organize around the customers rather than bank products do well

What Retail Banks provide; The six principal things

• Keeping their money and data well
• Payments
• Record-keeping
• Lending
• Savings
• Offer other products, such as insurance.

Customer Proposition

• Designed to solve a problem or get a job done.
• Student propositions must have regular payments, online shopping authentication, debit card and credit, savings, insurance, all-channel access, and incentives.

Single View

• Getting a single view of a customer is key.
• Customer Needs = unfulfilled dreams
• Banks must collect plans, timelines, understand behaviour, and apply trust.
• Important to understand their accounts and banking patterns

Prospects and Customers

• Both are valuable in different degrees.
• Customers have an existing relationship, where prospects do not.
• Need a steady stream of prospects

Customer Value has multiple measures

• Historic, current, future, lifetime

There are four main methods of segmenting customers:

• Demographic uses age, income, gender, family makeup or education
• Psychographic uses attitudes, aspirations, or other criteria
• Geographic uses region, state, city, or neighborhood
• Behavioural uses exhibited behaviour towards your organisation, include the products and content consumed, and interaction frequency

Engaging Customers:

• Banks must decide which customer groups to engage with and direct their finite resources and focus to a specific segment.

Customer Feedback

• Customer research/ data is essential
• Competitive advantages are lost if the bank only looks inward using confirmation bias.

Ways to gather feedback:

• Satisfaction surveys
• Event-driven surveys
• Crowdsourcing
• Online communities
• Focus groups
• Customer complaints
• Insight

The focus groups look at;

• What the bank offers is crucial when knowing their clients, how they approach it, and where to focus.
• The bank provides good consumer insights.
• By using the strategies above, notably face-to-face focus groups.
• Listen instead of speak

Insights

• Gather themes from research, internal info, deep customer understanding.
• By looking at research, focus groups and proposition managers identify customer touchpoints.
• Create hypotheses by solving customer problems

Acquisition Development Retention - See Images

Share insights with staff so they can;

• Understand customers
• Help to improve customer satisfaction
• Understand internal/ external processes which cause dissatisfaction
• Build a Deep Understanding of Customers

Customer 360 Overview

• Customer Database of all customer info
• Customer Relationship Management System to manage customer relationships
• Customer Analysis Platform to help with decision making
• Omnichannel Banking Platform for ease of use

Customer Analysis data tasks are:

• Identify target customers;
• Understand customers’ needs;
• Identify how the bank’s products or services currently meet customers' needs.

CRM should improve customer service to;

• Create sustainable value
• Build trust
• Increase satisfaction
• CRM systems must have single profiles with future events + cross/up sell information

The Omnichannel Banking Platform allows

• Interacting and transacting
• Receiving offers

All customers deserve engagement, but this is difficult. It relies on

• Understanding customers
• Understanding their strategy
• Segment improvements

Considerations

• Needs/problems
• Customer lifecycle
• Events

To improve Customer Satisfaction

Targeted campaigns must achieve a goal

• Outbound campaigns via traditional and modern means
• Inbound- when a client interacts through banking channel.

Banks must consider

• If the product is consistent with customers value/ hierarchy/ segment/ channels

Integrated Contact Management is essential

• Track every interaction
• Use result to improve outcomes

Trust and loyalty

• Many banks are losing trust and customers are willing to explore other offerings
• Customer-Centricity is a great defense against
• Optimise satisfaction

Banks can optimise satsifcation

• Understanding how customers buy
• Manage products
• Remove friction

Customer interactions

• Undertake customer journey mapping
• Can be tough for some banks due to "inside out" view
• New senses of URGENCY required with automation, next best actions, all to be deployed through various channels

Omnichannel Banking

• Integrates multiple Banking Channels
• Focuses on building relationships and great offers

Banking channels originally started as branch only but diversified over time

• Banking channels originally started with branch only
• Evolved to phone and internet banking
• Specialist advisor roles introduced and revenue was generated across several channels.

Today, Multichannel banking consists of

• Disjointed interaction with customers
• Omnichannel is HIGHLY INTEGRATED
• Easy for customers to switch channel
• Important to offer a great customer journey, thinking "outside in" and doing for the customer.

With Omnichannel Banking

• Customers have 24/7 access, but this brings disappointment if done poorly
• Many rushed to implement banking apps and created siloes.
• Therefore, must be configured with a step by step basis.
• Hard challenge as the BANK CULTURE must be changed!

Explore how a customer-centric model reshapes a bank's operations. This model focuses on customer management, marketing triggers, and organizational structure. Learn the importance of understanding customer value, behavior, and needs.