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To make their businesses truly customer-centric, financial institutions will have to re-align their entire organisation towards the client. The winners of tomorrow will focus on three areas in particular:
Technology. Asked to identify the obstacles in the way of becoming more customer-centric, survey respondents point first to technology. IT systems often inhibit the sharing of data across products, business units and customer channels, particularly for those who inherit legacy systems through acquisition. They can also require customers to resubmit the same information to the organisation on numerous occasions. Improving these systems cost-effectively will be a top area of focus for survey respondents next year.
Information. Enabling information to be shared is one thing; using that information effectively is another. As well as filtering data to get a single view of existing customers, institutions should use it to anticipate customers' needs, design new services and link products in a way that adds value for customers.
People. The quality of customer-facing staff is critical in fostering loyalty, managing specific complaints that could affect customer satisfaction and, ultimately, in enabling firms to capitalise on the opportunities before them. Yet fewer than 30% of respondents rate the performance of their customer-facing staff as being of the highest quality. Improving the quality of people in customer-facing roles ranks alongside improved IT as respondents' top priority over the next 12 months. The task of improving the performance of staff is made more difficult by the fact that it is becoming harder to retain good people in Asia. A majority of respondents said that retaining talent was a critical barrier to improving the performance of their staff.
Five steps to customer-centric growth in Asia
The survey results show that mergers and acquisitions are nearly twice as important as a source of growth to financial institutions in Asia as they are elsewhere in the world. Yet the path to customer-centric growth, whether organic or non-organic, still rests on five common planks:
- Abandon product silos. Respondents in Asia believe that existing customers will be their main source of organic growth over the next three years. To capitalise on this opportunity, organisations will need to share data on customers across product lines. Some of this depends on IT systems being flexible enough to deliver the information. But it is also a cultural challenge - accepting that the value of a customer may shift between different parts of the business over time and that staff should be given incentives to share data for the good of the overall organisation. This is all the more important when a firm is young and has a multitude of new products.
- Understand the customer. Anticipating and addressing the shifting needs of customers requires organisations to analyse demographic data more effectively, to offer products that are better suited to personal circumstances and to view the customer through the prism of future as well as present value. This is something that few organisations do, let alone do well. Approaching their customers in this way enables organisations to maximise opportunities to cross- and upsell; it also prevents customer churn. One of the main reasons why customers leave organisations, according to the survey respondents, is change in their circumstances and requirements.
- Identify and appoint a customer champion. Only one in ten respondents has a head of customer service in charge of the customer's experience. At many institutions, responsibility for this is spread between different business units or resides, among other responsibilities, with the head of marketing or sales. Appointing somebody senior whose job it is to view the institution from the outside in will help to ensure that the customer's voice is heard when key decisions are made. This applies as much to insurers and investment managers, who often work through intermediaries to reach the end user, as it does to bankers and those who deal directly with the end-user. CEOs also need to provide a clear lead on how firms should work to improve their relationships with customers.
- Empower customer-facing staff. The people on the front line are critical: survey respondents are clear that their interactions with customers during "moments of truth", when a complaint is made or an urgent query is addressed, have a greater impact on customer loyalty than providing high-quality advice or the efficiency with which transactions are made. Reducing the number of hand-offs to other people and enabling problems to be solved at the first attempt by providing the right information to customer-facing staff are key to serving customers effectively.
- Fashion and follow suitable customer metrics. Financial institutions are more likely to collect financial metrics, such as average revenue per customer, than they are non-financial ones, such as levels of customer satisfaction and loyalty. Organisations also prioritise financial metrics when setting targets for staff. Yet respondents to our survey also recognise that financial metrics are generally less effective than non-financial ones in showing how customer-friendly organisations are. Measuring and rewarding performance on the basis of customer-related metrics will encourage better behaviour and, in the long run, higher profits.
Find Out More
If you wish to obtain further details on the above issues, please contact our Banking and Capital Markets partner, Simon Copley, +[852] 2289 2988, email me.
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Download our Winning the battle for growth in Asia; Building the customer-centric financial institution (pdf file, 444KB) for your reference.
Related Pages
Read our global survey results.
Read more Financial Services publications. |
