So read the headline in a recent Mortgage Introducer article outlining the conclusions of a new retail report released by Jones Lang LaSalle. The report found that retail banks will have increased focus on ‘multi-channel’ with mobile and internet banking services playing an increasingly important role. There will also be increased customer segmentation focussing efforts on which services to provide to whom, where and how.
Offering a service in the most appropriate way for the customer and using new technology to deliver innovation, improved products and a better customer experience is a positive vision of the future. But, and it is a big but, it has to be done in the right way and for the right reasons.
Take the latter first, the ‘right reason’ has to be it’s for the customer. Yet the biggest challenge to the Financial Service industry is the lack of consumer confidence and the scepticism any new initiative must face. To successfully re-engage with customers there needs to be a shift away from a ‘sales culture’ to a ‘service culture’. My fear is that changes to retail distribution will be driven more by ‘easier to achieve cost cutting’ than from a desire to improve customer experience. I hope I am proved wrong.
Making any changes in the ‘right way’ is fundamental to success. Recognising that consumers are time poor and increasingly using internet and mobile technology does not mean that delivering financial services through these channels will automatically be successful. This is a transition similar to moving from the radio to TV – and TV is not just a radio script read to a camera.
Total Systems has surfed the technology wave since inception and in our experience there are three main considerations when introducing an ‘on-line’ strategy:
- Reengineer don’t reproduce
Replicating an existing face to face sales process does not work. The direct quote and apply route has to be designed specifically for the on-line customer. Too often, in a misguided belief that it will reduce costs, the customer journey is merely a rebadged procedure intended for the intermediary/branch staff resulting in a woefully low conversion rate.
- Legacy – heritage or millstone
There comes a time when not replacing legacy systems is misguided. Expediency is wrapping another layer of technology around the same set of poorly integrated multiple systems. Not only is this inefficient, but it makes ‘understanding your customer’ nigh on impossible. To get the right tone and frequency of communication, matched to the right channel and products, you need a common platform feed by a common customer view. Gluing a series of independent vertical platforms together just gives you a bigger brick not a common structure.
- Plan for change
Technology is a moving target. Who has not bought a new laptop only to see it outdated in a matter of months? If established providers are to be serious about serving customers ‘on-line’ they have to be serious about being able to change and adapt quickly, painlessly and often. With change becoming faster and more radical it is vital that the systems we adopt are designed to be a part of that change process. We cannot predict what will be the technology of choice in the future – but we can be part of it.
When talking to our clients we cover these issues. We can only hope that the retail banks do the same.