Customers now expect to be able to interact with providers through a variety of channels – in branches, on the phone, online, and through mobile and tablet applications or a combination of these – and receive the same experience through each one.
For every financial services organisation, reacting to this is now a board-level issue and one that is right at the top of the agenda. Executives are increasingly asking where they will be in five years’ time and what would happen should a credible digital player enter their marketplace tomorrow. Those who are honest do not like the answers.
Factors other than fear are also creating pressure to provide better levels of customer service. The negative publicity the sector has endured over recent years means the perception of financial services, and individual brands within it, has been tarnished. Regulators, too, are pushing for greater transparency around costs and, with it, more efficient processes.
To date, most organisations have focused on transforming their customers’ experiences. This is the right approach, but many are failing to fully examine the business processes which sit behind the front end. The strategy has often been to attempt to bolt digital offerings on to existing processes that are no longer fit for purpose and can sit on aging IT platforms, some of which are not agile enough to be able to accommodate new requirements in the timelines the industry should now be demanding.
For a bank or insurer to only focus on customer experience and not the underlying processes that drive the business may only result in an increase in cost line with no appreciable improvement. It can also result in an opportunity lost; some analysts calculate that up to a 30 per cent improvement in net profit is at stake for those who get this right.
Some analysts calculate that up to a 30 per cent improvement in net profit is at stake for those who get this right
The technology, though, is not the only issue. Banks and insurance companies also need to be able to change their culture, with the business itself taking the lead in identifying what they want to be able to achieve, and then working in partnership with IT on a solution to enable this, and driving it through the organisation in a timely fashion.
A good example would be an insurance company, which generally tends to approve the majority of its claims. From a customer service and retention perspective, insurance companies know they need to move away from interrogating people who make a claim, making them feel under suspicion just because they have had an accident. They also have plenty of information and expertise which can help them identify claims that are more likely to be fraudulent, and technology now exists that can enable them to interact with their data to identify the claims on which they need to focus.
Yet organisations cannot afford to wait five years to rebuild monolithic IT systems, by which time customers will have been lost and the marketplace moved on. Instead, they need to identify the areas of the business on which they wish to focus – those which incur the most cost or where the greatest value to customers or the bottom line can be found – and develop both the broader strategy and business processes required to support it as they go. In short, they need to develop an agile culture supported by agile technology.
Those developing a customer-centric strategy, which will allow organisations to deliver better customer service, take advantage of emerging channels, and join up all their processes and other offerings, will be the ones who emerge from the challenges of the recession ready to flourish in the digital age. The future for those who fail to put in place such measures is far less certain.
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