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10waysforBankstoachievegreaterprofitandcustomer
satisfaction
PostedbyMousumiGhoshonJanuary9,2014at1:01pm
ViewBlog
WhileBanksaregettingmoreandmorepressurefromcustomersincreasingdemand,highlycompetitivemarketandstrict
regulationsinthecurrentenvironment,understandingcustomerbehavior,attitudesandrequirementsismorevitalthan
everforbanksstrategicthinking,operationalplanninganddaytodaycustomertreatment,accordingtoErnst&Young.

WhatBankscando?
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1.ProductBundlingandRelationshipPricingBanksneedtothinkbeyondonesizefitsallstrategytocaterto
customersincreasingdemand.Customersalsowillleaveaninstitutionforanotherbasedongettingtheservicesthey
wantandthebestpriceavailableforit,sorelationshippricingandproductbundlingbecomeevermoreimportant.
Banksshouldlookatproductsandpricingbaseduponatotalcustomerviewandrespondtothevaluethatcustomers
bringtothebankacrossthespectrumofrates,fees,featuresandservices.Manybanksarenowadaysbundling
identitytheftalertsandcreditscorereportswithacheckingaccountwhichprovidesincreasedaccountsalesbecause
oftheattractivenessofthebundledfeatures.
2.Crosslobdatasharingandbuildinga360degreeCustomerViewThoughtherearemanychallengesin
integratingcrosslobdatalikeextractingdatafrommultipledisparatesystems,existenceofduplicaterecordsin
businessapplications/databasesanddatasharingimpedimentsduetooptoutpolicy/otherregulatoryrequirements,
itiscrucialtohavea360degreeviewofcustomerwhichwillhelptogetaholisticpictureofacustomers
demographics,engagement,needandpreferences.Thisknowledgeenablesorganizationstopreciselytargetproducts
andservicestocurrentcustomers,acquiremoreprofitablecustomers,reducemarketingcosts,improvecustomer
satisfactionandmaximizelifetimevalue.
3.Sophisticatedcustomersegmentationisthekeytocatertoindividualizedneedsandshouldbebasedonstandard
bankingmetricstenurewiththebank,numberofaccounts,balancesofaccountsandloans,frequencyof
interactionwiththebank,channelpreferencesalongwithpsychographic(values,attitudes,lifestyles),behavioral
(usagerate,pricesensitivity,brandloyalty,andbenefitssought)anddemographicvariables(occupation,income,
andfamilystatus).
4.Realtimecrossselling/upsellingBankscanuserealtimeeventsanddeepcustomerinsighttooffercross
channelmarketingcampaignswheremomentsoftruth(wedding,homepurchase/sale,newjob,stocktransactions,
etc.)areactedonasawaytodeepencustomerrelationshipstodeterminethenextbestaction,beitanoffer,
channel,message,pieceofcontentetc.Themorecustomizedproduct/serviceoffering,thehigherarethebarriersto
switchingbanks.
5.InnovativeRewardDesignIntodayshypercompetitivemarket,banksneedtomovebeyondaonesizefits
allrewardmodelparticularlyforthemostprofitableclients.Theyneedtodesignasystemwhichletprofitable
customersenjoypremiumbenefitsandredeemrewardspointseasilyandinvariousways(forgiftcards,
merchandise,eventsandexperiences,orcash).CelebrityCruiseshasjoinedwithMBNAAmericaBanktocreatea
comprehensiverewardscreditcardofferingbothcruiseandnoncruisevacationbenefits,includingtravel,
merchandiseandcashrewards.AccordingtoCelebrity,theCelebrityRewards(SM)WorldPointsVisa(R)creditcard
isdesignedforpeopleseekingwaystobalancetheirworkandleisuretime.CapitalOnesinnovativePurchase
Eraseruniquerewardsredemptionfeatureprovidesconsumerstheabilitytoerasethecostofprevioustravel
expensesusingtheirrewardmiles.
6.AutomatingcustomercareInthedigitalage,customersdemandmoreselfserviceoptionsandanytime,
anywhereservice.Soexpandingcustomerselfservice,casemanagement,disputemanagementandeventbased
decisionmakingcanbeperceivedasbettercustomercare,whileloweringoperationalcostsandincreasing
effectiveness.However,banksshouldcontinuetomakecompellingoffersasincentivesforcustomerstouselower
costchannels.
7.DigitalRevolutionWellitmightjustbefeasiblethatwhatsocialmediaisreallydoingtodayismorethan
socializingtheweb.Itmightbepossiblethatthisdrivetowardsgreatusability,humaninteractiondesign,multi
touch,augmentedreality,geolocationandconnectednessisactuallycreatingadigitalserviceplatformthatcould
revolutionizetheabilityofanorganizationtolookaftercustomer.Banksshouldtrytoengageconsumersthrough
digitalchannelsandadvanceitsleadershipinthedigitalspaceaswellasexpanditssocialmediaengagementon
Facebook,Twitter,PinterestandLinkedIn.Thoughtherecanbeseveralroadblocksandcomplicationslikeonline
accountopeningisexpensiveonperaccountbasshowever,pricesfornewdeliverychannelsalwayscommoditize
asusagegrows.Itisamyththatimportanceofbrancheswilldiminishasthedigitalchannelusagewillincreaseon
thecontrary,ifbranchesaretightlyintegratedwithotherchannels,thatpromoteandsupportthemandthatquickly
finishtransactionsstartedtherewillbemoresuccessfulthanever.
8.BigDataThebigdataisthenewdisruptivetechnologyforchangingthegame.Bigdatacapabilitiesprovides
bankstheabilitytounderstandtheirclientsatamoregranularlevelandmorequicklydelivertargetedpersonalized
offers.Beingabletoanticipatecustomerneedsandresolvethembeforetheybecomeproblemsallowsbanksto
delivertimely,conciseandactionableinsighttocontactcenteragents.Thiscanleadtoincreasedsales,improved
customersatisfactionandareductioninoperatingcosts.Fightingfraud,financialcrimesandsecuritybreaches,inall
forms,isamongthemostcostlychallengesfacingthefinanceindustry.Bigdatatechnologiesprovideascalable,
integrated,secureandcosteffectiveplatformtomorequicklyprevent,detectandmitigateinternalandexternal
frauds.BigDataBenefitsinclude:Reducedcostsoffraudscreeningandmonitoringfewerfalsepositives,reduced
costoffraudinvestigations,reducedpaymentfraudlosses,realtimefrauddetectionandmitigation,optimizedoffers
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andcrosssell.
9.MultiChannelSeamlessExperienceBanksshouldseektoattractandretaincustomerswithacompellingmulti
channelexperienceacrossalltouchpoints(branches,online,mortgageandinvestmentadvisors,etc.)Technology
continuestorapidlychangethewayconsumersbehaveandinteract.Virtualchannelsarebecomingmorerelevant,
withtheincreasingpenetrationofhighspeedInternetconnectivityandWebenabledmobiledevicesallowing
consumerstospendmoretimeonline.Bankcustomerswillnotonlycontinuetouseamixofchannels,butwilluse
nonbranchchannelsforincreasinglycomplexbankingtransactionsWhileretailbranchesremainacorebanking
channel,researchshowsthatcustomertrafficisinsomecasesflatordeclining,ascustomerscometorelymore
heavilyondigital/phonechannels.Infact,onlinebankingandcallcentersaccountfor55percentoftransactions
today.Thisshiftcanbeapositivedevelopmentforbanks,buttheymustbereadytoprovidecustomerswitharich
setofcapabilitiesandaseamlessexperienceacrossallchannels.Successfulexecutionofsuchastrategyhastangible
economicrewards,butrequirestherightsetofinvestmentsanddevelopmentofnewcapabilities.
10.InnovativeBankBranchDesignHip,modern,andfun.Thatsexactlythevibemanyofthenationsbanksare
tryingtoachieveastheyreimaginingtheirbranchesandtrytoluremorecustomersintobrickandmortaroffices.
Thehighcounteroldtellerstationsandstaff,whoareversedintransactionalbanking,wontworkintheBANK2.0
world.Withdrawalsanddepositsarentattractingcustomerstobrickandmortarofficesanymore,sobanksare
turningtoperkslikecoffeebarsandyogatokeepanimportantgatewayopen.

AtoneWestCoastbank,customerscanspreadyogamatandstrikeatreeposeorgrabafreebeerduringanOktoberfest
stylecelebration.Anothernationalbankoffersmacchiatoatitscoffeebarandcouchesdesignedforlounging.Locally,
banksareadoptingAppleStorelikedesigns,addingconcierges,andsettingasidespaceforcommunitygroupstomeet.
BankofAmerica,forexample,recentlylaunchedwhatitcallsaflagshipofficeinBostonsBackBay,housinginoneplace
thevarietyoffinancialservicesofferedbythebankinggiant.Tellerservicesaresqueezedbehindacolumn,whileprivate
officeswheremorelucrativebusinessisconducteddominatethefloorspace.CapitalOneFinancialCorp.,wellknownfor
itscreditcards,isbreakingintotheBostonbankingmarketwithsixnewmarketingofficescalledcafes.Scheduledto
openoverthenextseveralmonths,theywillresemblecoffeeshopsmorethanbanks.Employeeswillserveupjavaand
sandwiches,alongwithadviceonhowtosetuponlineaccountsandaccessotherservices.Modernandinnovatively
designedbrancheswilldrivecustomerengagementandisthekeytobranchlongtermsuccess.
Ratherthandecryingcustomersincreasingdemandandcompetitivemarket,ifbankerscanembracethenewrealityand
focusoninnovation,disruptivetechnologyandautomationtheprofitwillfollow!!!!
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