The banking industry is under stiff pressure in today's business environment. These pressures are being augmented by tighter macro-economic and regulatory environment, severe competition generated by neo-banks and non-traditional payer pressures, product differentiation and retention and development of talented people. To sustain and succeed in the disrupted and dynamic situation which continues at an unprecedented pace the banking industry as a whole should formulate well-defined and simplified marketing strategies.
Research findings show that 'drives to digital' is a must as it is impacting delivery, marketing and service usage. Diversification of the ICT-based companies is also taking share of banking services through their technologies and innovations which are termed as 'payment disruption'. Banks are experiencing cross-channel exposure, driven by insights and powered by channel analytics. Banks need to eliminate both human and insight silos by integrating data, systems and processes across different products lines in order to manage customer information in 3E e.g. economic, efficiency and effectiveness.
Value is not constant and declines over time as 'value back holes develop' and the only way to avoid this is to invest in innovation. Many elements contribute to making a financial institution innovative and to making innovation programmes successful. However, it is also important to realise that not all innovative ideas will yield success and marketers often find themselves in a game of placing strategic bets on innovations that are probabilistic, but not guaranteed. These strategic bets are vital to any enterprise as when they are successful they increase value, which in turn leads to more customers and essentially, business growth.
Marketing should be a bank-wide obsession, with every individual in the organisation nurturing customers by listening and responding to their needs. This should result in a shift in mindset, to marketing as a service with marketers existing to serve the customers and not merely to sell products and services. Many banks face the complex dilemma of balancing the voice of the customers with the voice of their companies showing a very delicate dance but getting it right differentiates a customer-centric organisation from a product-centric one.
Banks have to realise that simplicity is mutually beneficial improving trust and loyalty to both customers and the organisations. They will realise savings from redundant and outdated processes, reduced customer inquiries and fewer refunds and reversals as well.
Some additional ways banking are made simpler in recent days including voice and gesture recognition, multichannel video chat, branch-based digital billboards and real-time spending updates via a customer's mobile device. Simplification and innovation in mobile banking will continue with voice recognition and video conferencing potentially becoming part of many banks' apps as well as contactless payments.
As banks are approaching to focus on the holistic client experience, no matter what the channel is, these can create an environment that fosters constant connectivity between them and the client. This should allow for deeper relationships, bigger share of wallet, and increasing confidence of the client in managing their finances.
Winning customers' hearts by creating and delivering compelling customer value is the single most effective strategy for acquiring and retaining customers and raising the level of earnings. As this business strategy ought to be the fundamental goal of any business, the best investment a company can make in its own future growth and success.
Banks must radically be reorganised to put cultivating relationships ahead of building brands. These have to devise strategies to win customers' hearts by excelling in customer value creation. These must have disciplined process to innovate continuously, by identifying the obstacles that prevent innovation from flowing freely, and by keeping the banks focused on continuous customer value creation that results in new value for the customer and in sustainable profitability.
Now it is more logical to rethink about the marketing department of a bank. The department must be reinvented as the 'customer department' that replaces the 'chief marketing officer' with the 'chief customer officer' with properly defined role. This change shifts the firms' focus from product profitability to customer profitability. While redefining the marketing a quote from Lou Gerstner, former CEO of IBM may be recalled. "Putting the customer first should not just be a slogan; it should be the thing every successful enterprise should live by every day."
More banks have to realise that most of their marketing content is just noise and they must embrace the art of storytelling to help differentiate their brand in the crowed and commoditised world of financial services. Leaders in the banking sector need to manage through ongoing, ever-changing regulatory changes to focus on key customer segments with innovative products, new technology and exceptional customer experience across all channels. Institutions that differentiate their brands by innovating new client experiences and leverage better targeting and segmentation will be the winners.
The writer is pursuing professional accountancy with ACCA.
 smaacca@gmail.com
Rethinking banking strategies
Md. Saifullah Azad | Published: April 14, 2015 00:00:00 | Updated: November 30, 2024 06:01:00
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