With so much pressure in the banking industry it can be hard to know what financial institutions should make their top priority in 2015. Should they focus on compliance? Back-end technology? Customer service? All of the above?
Over the past few weeks we’ve noticed that thought leaders across the industry have centered on a theme for the top banking priority in 2015: Develop a customer-centric business model.
Here are the two critical components of customer-centric banking:
Develop better customer analytics tools
Develop better digital banking solutions
What Industry Thought Leaders Are Saying
According to industry thought leaders (cited below), these two components will enable banks to better understand their account holders, thereby paving the way for them to win more wallet share. That’s why so many thought leaders have endorsed the idea of customer-centric banking for 2015.
For instance, Jim Marous asked 60 global financial services leaders what their top predictions were for 2015, and they highlighted the two components listed above. Marous says, “Two of the most omnipresent trends evident in this year’s predictions were the heightened use of customer insight for the delivery of services and an enhanced customer experience, and the continued development of digital channels and associated digital services.”
And PwC puts it this way:
“In 2015, we foresee the acceleration of a trend that’s been under way since the end of the financial crisis: the increased commoditization of retail banking products. ... This consumer-focused approach can improve revenue by attracting new customers and increasing the bank’s wallet share of existing customers. What’s more, greater marketing precision can direct banks’ spending more efficiently and help control costs.”
Deloitte confirmed this idea in their report “2015 Banking Outlook: Boosting Profitability Amidst New Challenges.” They say, “As the economy improves, banks cannot hope to just ride the wave, but instead will need to become more savvy — in their choice of target segments, product offerings, and pricing. Getting even better at data and analytics will clearly help here, as will the use of technology to redefine customer experience, both in the retail and commercial segments.”
Dave Edmondson, senior managing director at Accenture, echoes this refrain as well: "2015 will see banks move beyond their traditional role as product providers to play a deeper role in the everyday lives of their customers. With digital technologies, banks will help customers reach decisions about what to buy, and where and when to buy it—whether it's a home, car or even a restaurant meal.”
In addition, a Ovum Research survey of 500 CIOs and IT decision makers found that IT spending at financial institutions in 2015 will focus first on digital banking (mobile and online) and then customer analytics. Kieran Hines, practice leader at Ovum, sums up their findings: "What we're hearing from vendors and banks is there's more optimism about the immediate future and there's a shift from compliance-based spending to projects that will drive growth."
What to Do in 2015
It’s the same theme over and over. Financial institutions that develop a customer-centric model will grow their top line and beat out the competition. By all of these accounts, the way to win in 2015 is to focus on customer analytics and digital banking.