Why are innovative banks turning into customer-centric businesses?

Even though banking services are targeted toward the customers, in recent times, the financial services sector hasn’t been the frontrunner for customer focus. Instead, they have been focusing on providing more products while taking a back seat in their customer service efforts. It is because of the lack of these efforts that there has been an increase in fintech companies that leverage the latest technologies to close the gap between existing banking products and customer expectations. Now, the expectations of consumers have risen, and they expect the same level of experience from their banks as well.

To understand why innovative banks are turning into customer-centric businesses, we need to start by getting a historical perspective of how banks have operated in the past.

How have banks historically operated?

Banks have always operated as product-centric enterprises. Only the important, wealthy customers were the ones who received any level of personalized customer service. There are several reasons behind this.

Before data became such an integral part of our life, banks had a certain power over their customers. They knew that their customers would come to them for their financial services needs. From simple services like a credit card to high-level services like a mortgage or personal loan, everything required a visit to the bank. However, thanks to the digital disruption, customers don’t have a bank as their only option for their financial services. Instead, they can look online to find fintech companies that offer more attractive services than their primary banks. These companies often provide customized solutions to their customers, making them a better option.

This competition has made it clear that the game has changed, and if banks want to win, they need to change. This change is what has pushed banks to transform from product-centric enterprises to customer-centric ones.

Why are banks slow to this change?

There have been some industries that have been slower to this change than others—banking being one of them. This is because, in order to implement their customer-centric strategies, they have to deal with a number of factors, such as security concerns, regulatory restrictions, old IT infrastructures, the increased cost, and a traditional mindset.

But, thanks to the success achieved by fintech, banks are now ready to embrace their customer-centric initiatives. They know that customers are getting impatient, and if they want a competitive edge, they have to take advantage of the potential of customer-centricity. With technological advancements like AI and analytics, it is possible to reinvent bank as a customer-centric business.

How can banks turn into customer-centric businesses?

A great way for banks to improve their customer service is to pair their strategy with predictive analytics. Over time, the data accumulated within a CRM can identify behavioural patterns and build models that can reveal operational inefficiencies and customer insights.

Take this example. Let’s say a bank wants to optimize its call centre. So, they take a look at their history data sets across different demographics, and after analyzing them, here is what they observe:

  • The average wait time between calls is 20 to 30 minutes.
  • The most frequently asked questions are quite simple.

Now, based on this information, you can create a strategy that involves creating an AI-enabled chatbot and a knowledge base that your customers can use for basic inquiries. This will ensure that their call centre receives only complex service requests, which will also reduce wait times and improve customer satisfaction.

This is just one example of how banks can improve their customer service.

Customer centricity won’t be the same for all banks. They need to figure out what exactly it means to them and how they can align it with their mission and business objectives to meet the rising expectations of the customers.

At iMovo we have years of experience implementing CRM tools to help businesses turn into a customer-centric business. Book your fee consultation here and together we will help you create the perfect strategy for your organisation.