Last week I had a great opportunity to present my thoughts around customer centricity in the financial service’s industry at an AMA webinar. The webinar was an excellent forum to share my experiences working for and with a number of financial service clients as they try to tackle the huge challenge of becoming more customer centric. There are four significant reasons why companies are struggling to become more customer centric; historically siloed distribution, intermediary based distribution, antiquated legacy systems, and marketing expertise. To address these challenges companies are investing in large scale digital transformations, innovation initiatives, direct to consumer distribution models, and “big data” projects. Unfortunately, in many cases these investments are falling short in driving any significant improvements in the customer experience.
From my perspective, too many of the current efforts in financial services are internally focused, and are being solely thought about as technology projects. As I pointed out in my webinar, technology is only one part of the solution. Companies need to be thinking about transforming their business and marketing approaches in addition to their technology infrastructure. If companies don’t invest in these other transformations, they may not ever deliver on their customer centricity goals. Time and money needs to be spent on creating organizational alignment, understanding the customer journey, and deploying marketing strategies that reward, recognize and respect customers.
During the webinar, I asked a question about what participants wanted to get out of their customer centric initiatives, and almost 50% responded they wanted to better understand their customer’s journey. Although, I find it encouraging that so many people are really trying to understand their customers, it also reinforces that financial service companies are significantly behind other industries. In order for financial services companies to remain relevant to today’s customers, they better accelerate their customer centric initiatives, because if they don’t, startups and new entrants from outside the industry are going find a better way to service these customers. Think about how companies like Uber have completely transformed traditional industries. Financial services is ripe for that kind of disruption.
Another question that was raised during the webinar was how to build a business case for investing in customer focused initiatives. I think a better question may be “what is the cost of not investing in customer centric initiatives?” There are hundreds of examples of companies that lost sight of their customer needs and quickly lost market share. Blockbuster is one that always comes to mind when I think about a company that clearly did not understand what customers really desired.
I firmly believe the companies who commit to business, marketing and technology transformations to deliver exceptional customer experiences will be the big winners in the financial services industry. These companies will anticipate shifting customer needs and deliver experiences that attract new, loyal customers at the expense of less customer centric companies.
You can listen to my webinar here to hear more details around the challenge and solution for financial service companies to become more customer centric.