During some informal chats with Senior Sydney bankers in the past days one thing became clear about digitisation in the banking industry: Banks are really moving forward and are changing the way they interact with their clients. On the other hand, this does not automatically mean that we are really experiencing the added value this change yet.
Almost all banks have launched one or more mobile apps in the past years. A lot of them were copies of the existing online environment and used to show off, while missing the potential of mobile solutions. We have also seen launches of online platforms by larger banks. It might be worth reading the online reviews before deciding to apply for such an account. It sometimes looks fancy and the idea driving the ‘solution’ might be good, but the provided customer service is often below average. Online channels should provide the same good (or even better) service a customer should receive in a branch. The practice shows that customers have to wait very long to get response on enquiries or response on issues. If you have a client with a bad experience they jump on social media and share their complaints with the world. And they are right. Having the basics right is the least clients may expect from their banks.
My blog from last week on the issues in retaining client relationships after wealth transfers to the new generation could be linked to a much wider discussion on changes to be expected in banking services to their clients. Not specifically on wealth transfers, but the use of new tools and channels that are on top of mind of this new/younger group of customers.
Banks are forced to rethink their business models because of this global demographical development. The group of banking customers under 40 that is not connected to the internet or mobile banking services is becoming marginal and also the ‘aged’ population increasingly uses online or mobile. Most of the banks however still use their traditional business models and segmentation strategies. For how long?
Changing customer needs (should force) banks to rethink their business models to provide an enhanced customer experience
Next to benefits from an improved customer experience banks really have to look at their own business and operating model. There are huge opportunities for cost savings just by reviewing the customer segmentation from a services point of view. Most banks are still looking to the customer/company size to decide if the client fits into a specific segment. This question just should be part of the overall perspective on a client’s needs that actually should determine which products and services should be offered to a client. This is also the case for the channels the bank provides. Mobile and Online might be the cheaper channels, but are increasingly becoming the preferred channels for customers to do their banking. Is there anyone able to explain me why company KPI’s still require a Relationship Manager to physically visit all clients in their portfolio several times a year? Should that not be approached the other way around? Which clients do need a visit from a relationship manager and which are actually much more happy with mobile and online communication channels?