RiskCALM₄^® The Future of Banking – E-commerce (Part 4) New Customers

RiskCALM₄^® The Future of Banking – E-commerce (Part 4) New Customers

New Customers

If innovation is the genesis of success then competition is the reveille for innovation. Innovation is awakened by the encroachment of competition, stirring the ideas of thought leaders to create the building blocks of business innovation and establishing the foundation for the pillars of success. For a financial institution’s business success the main pillars are great service and market penetration delivered through a well-thought-out plan, leading to success and market dominance.

Great Service

Great service in today’s digital world has three characteristics: availability, a smooth customer experience, and personalized solutions. In the new world of ecommerce, these attributes in themselves are unique in that they are online with only digital touchpoints as the interface to the customer. The challenge: assure availability of all business processes, enable an easy and convenient customer journey and solve customer requests with the personal knowledge and understanding of each customer. This is truly the new world of banking, understanding availability doesn’t mean the ability to fill out a loan application and wait for someone to get back to you. No, it means the ability to get a loan, now! Worse case to be pre-approved. The expectation of the availability of services really means the availability of solutions.

Today’s customer expects the services and solutions offered by a financial institution, to be available 24/7. Remember, the online digital world has spawned the invisible customer, with the power of anonymity. The anonymity shields the customer from the sense of betrayal of a personal relationship. The ‘personal relationship guilt’ factor, no longer exist. The financial institution no longer has a second chance with most customers, not always a reflection of the customer’s desire but rather it is the reality of the easy availability of other institutions’ solutions.

Availability, as a result of the services being offered 24/7, must also be convenient and easy for the customer to engage and once engaged, must offer a smooth process for the customer. If there are delays in loan approvals or account openings, the customer will most likely walk away, perusing the internet for a smoother journey. Your online offering, therefore, must traverse the world of compliance with minimum delays, whether IFRS 9’s forward looking decisioning or AML. Your business policies must also consider the competition and respond to the reveille of change and the transformational impact of the digital universe. If not, the customer will proceed to the path of least resistance, one click away, loyalty in-hand.

Assuming you have answers to availability and a smooth journey, how will you utilize the digital touchpoints to accommodate personalized solutions? As ecommerce grows, the long standing ‘relationship marketing theory’ will, out of necessity, have a paradigm change to ‘digital relationship marketing’ (DRM). How will a financial institution execute DRM requirements, without data, it can’t! In this digital universe, data has become the synonym for verbal communications, without it, digital communications would become a monologue, with the financial institution communicating to no one in particular. To continue to expand relationships with customers, a financial institution must expand its customer data. New innovative digital touchpoints must be developed and incorporated into the overall digital plan. These touchpoints will be the renaissance of digital marketing, establishing a platform by which an exchange of information occurs, allowing the parties a digital dialogue. The scope of relevant data collected will be utilized through process analysis or in predictive analytics. Making use of the customer data, in the online world, can only happen through automated business processes that are integrated with analysis and predictive analytics.

Market Penetration

The second pillar for a financial institution’s success, market penetration, must be accomplished through a well thought out surgical strike. Identifying your targets and goals within your market, approaching it with precision marketing, utilizing a method measured by your capabilities and tools. The goal is to dominate that market segment within the scope of your capabilities. With that in mind, taking the building blocks of ideas, creating an innovative business model and executing the best you can, is the goal of every business.

What innovative business approach could lead your market penetration into dominance? For example; consider what every financial institution wants; to retain current customers, attract new customers and increase revenues. What do customers all have in common that a financial institution would be interested in? Buying cycles! Understanding that every customer will eventually enter a buying cycle, such as; an automobile, a recreation vehicle, a television, a health emergency, a remodel, a home, etc. Suppose you could aggregate buying cycles, pre-­identify your customers’ specific buying cycles, offer promotional discounts within a buying cycle, be involved in both customers’ and non-customers’ buying cycles and if loans were necessary at the conclusion of either buying cycle, be interactive with either, at the time of sale? And, what if you could cross-sell them, automatically, other pertinent financial products, during the loan process? More account openings, more products per household, more revenues! Oh yes, another by-product of controlling and facilitating buying cycles, great service!

How can we do all that? RiskCALM₄^®, talk to us now!