Ebook

Become Truly Customer-Centric6 Key Considerations Your Financial Institution Needs to Get Onboard

Become Truly Customer-Centric

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EXECUTIVE SUMMARY

Traditional financial institutions have typically operated in a product-centric way, presenting new

products that are created by a product committee, with the company’s bottom line at the heart of

them. Rarely are the true needs of each customer taken into consideration, and communication is

primarily a one-way channel, from the financial institution to the customer.

When financial institutions are structured in this way, they are unable to fully capitalize on the

continuous flow of information provided to them through customer interactions and behaviors. As

customers become more familiar with receiving extremely personalized and relevant experiences

The Digital Dilemma

EXPERIENCE

EXPECTATIONPERCEIVED

VALUE=

“As expectations rise, without changes in experience, perceived value decreases.”

— Forrester Research

from their favorite vendors, they come to expect the same level of personalization from their financial institutions. Thus, the customer, not the product,

should be at the real heart of a financial institution’s bottom line.

Cutting edge financial institutions already recognize the important of building a personalized experience for their customers, and are beginning to

understand that they need to fundamentally change to become truly customer centric.

True customer centricity requires unlocking silos (organizational, system and data) and the collaboration of both cross-functional teams, vendors and

suppliers as “partners within the value chain” to innovate and radically change the customer experience. At the crux of the customer experience should

include the up-to-date customer knowledge, with data from all systems, so that systems can access a holistic and individual-customer view.

Having the right technology in place becomes imperative in the quest to provide the best customer experience. The benefits of adopting a technology that

allows your institution to be more customer-centric are two-fold - you will not only be better equipped to serve your customers, but you’ll see real revenue

growth achieved with ease like never before.

In this ebook, we’ll examine true customer centricity, and how your financial institution can achieve it with the right technology.

Become Truly Customer-Centric

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THE PROMISE OF CUSTOMER CENTRICITY

Imagine a world where businesses could identify opportunities and concerns associated

with each of their customers before they happen - and then take action by delivering

relevant, valued messages and offers to them in real-time. Fewer issues with retention

rates and loyalty would arise, and the capacity for every interaction with customers to be

more valuable, meaningful and even profitable would rapidly expand. That’s the promise

of customer centricity.

Customer centricity is not just a matter of making vague commitments to “put the customer

first.” It’s about literally building your customer relationships, conversations and service

around the needs, preferences and actions of your individual customers on an ongoing

basis. This can include:

• Interacting with customers via the channels they prefer, when they prefer it

• Tailoring product and service offerings to each customer according to individual needs and preferences

• Anticipating - and fulfilling - customer needs at the right time and place

CUSTOMER CENTRICITY IS NOT JUST A MATTER OF MAKING VAGUE COMMITMENTS TO “PUT THE CUSTOMER FIRST.” IT’S ABOUT LITERALLY BUILDING YOUR BUSINESS AROUND THE NEEDS, PREFERENCES AND ACTIONS OF YOUR CUSTOMER ON AN ONGOING BASIS.

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6 KEY CONSIDERATIONS FOR CUSTOMER-CENTRIC FINANCIAL INSTITUTIONS

For many product-centric financial institutions, being customer-centric can be a very different way of

operating. So, before diving head first into transforming your company into a truly customer-centric one,

it’s critical to understand the necessities for customer-centric businesses.

Here are six of them:

Established Incumbents No Longer Have a Clear AdvantageSimply having a long-term, strong market position is not a barricade against increased competition. Now more than ever, customers are taking advantage of self-service tools that make it easier for them to take their business elsewhere. Even your most loyal customers will test the market if they are not getting the most optimal service. Your financial institution has a multitude of data on your customers, and it needs to be used to interact with them in the most relevant and personalized ways.

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Barriers to Market Entry are Lower Customers are beginning to expect more out of their financial institutions. Various technology companies have entered the financial services market, which has made it easier for customers to choose alternatives that eat into traditional financial institutions’ revenue streams. These new competitors include not only agile startups, but high-growth companies from other industries. Apple, Facebook and Google are great examples of technology companies making inroads into the financial services industry.

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All Communication Channels MatterGrowth in the use of social media, mobile devices and the internet as primary sources of information is altering how customers consume and share ideas and experiences. You need to utilize all of your communication channels consistently to gather information about the needs and preferences of your customers, and to interact with them effectively. And most importantly, you need to be ready to communicate with your customers on every channel, at any moment.

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The Value of Data Only Continues to GrowAs you gain greater access to fresh, personalized data from more sources, analytical tools that provide actionable insights in real-time become essential in helping your financial institution achieve a powerful competitive advantage. In order for you to positively interact with customers, you need to fully understand their needs, and you can only accomplish this by having all of your data organized in a meaningful and useful manner - always updated, accessible and available in real-time.

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The Need to Strengthen Customer Loyalty and Attract New Customers is IntensifyingAccording to the Harvard Business Review, reducing customer defections by as little as five percentage points can double profits. Best-selling author Emmett C. Murphy claims that a 2% increase in customer retention is equivalent to a 10% decrease in costs. In an age when a disgruntled customer can defect quickly, you need to work at retention - continuously and persistently.

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More Opportunities with New, Data-Driven, Personalized Products and ServicesThe challenges ushered in by the digital age are far outweighed by the opportunities being created. Financial institutions now have the means to innovate in previously unavailable ways, appealing to customers on a one-to-one basis with tailored products, services and offers that anticipate and fulfill their needs and preferences at the moments when it matters most.

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YOU CAN’T BE CUSTOMER-CENTRIC IF YOU DON’T USE YOUR DATA

Many financial institutions collect and store vast amounts of customer data, but it’s fragmented - stored in discrete, application-specific silos that

prevent a full understanding of each customer. By freeing this data, and merging it with additional data from external sources to better understand

and appeal to customers at the individual-level, you are able to deliver a more personalized and relevant experience.

Customer centricity is being enabled due to some key technologies, including:

MobileAccording to Forrester Research, global smartphone penetration by population will grow to 50% by next year. With 3.5 billion subscribers expected by 2019, smartphones and other mobile devices are rapidly becoming the primary means by which people manage their daily lives - communicating, navigating, banking, making purchases and more. In the process, they are also generating a massive and growing amount of data of potential value to the businesses that serve them.

Social MediaToday, “word of mouth” happens prominently on social media. According to research from A.T. Kearney, social networking is the number one online activity worldwide, consuming an average of 48% of people’s Internet time. Kearney’s research also reveals that social media has a significant impact on buying decisions, particularly among younger populations. More than half of consumers under the age of 46 responded that they frequently or occasionally base their purchase decisions on what’s happening in their social network, and among those aged 16 to 25, the response was 67%. Financial institutions that seek to reach, understand, learn from and influence these consumers need to master data collection and analysis from social media sources.

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Big DataThe amount and variety of data being generated globally is rising at an astronomical rate. Add to this the rapidly-growing amount of customer data that financial institutions are collecting and storing in data warehouses, including credit card transactions, product preferences and purchase behaviors. Within these torrents of information are nuggets of data about each customer, which can reveal their habits, preferences, dislikes and needs.

Advanced AnalyticsOn top of big data alone sits advanced analytics, which is required to gain benefits from big data. Taken together, these developments provide rich, previously untapped growing opportunities for companies of all industries, and can open doors to achieve not only greater customer centricity, but also new revenue and profit growth.

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ACHIEVE TRUE CUSTOMER CENTRICITY WITH THE RIGHT TECHNOLOGY

Your financial institution has access to so much customer information, but unless you can use

this intelligence quickly and effectively, all that data is rendered useless. You must leverage the

enormous amount of existing user data your financial institution has stored and is constantly

receiving. This will enable you to create user experiences that are much more personalized than

those created by technology companies that count merely on web traffic activity on known users,

for instance.

Being a customer-centric financial institution requires the anticipation of future needs - looking

at behavioral patterns, market trends and user experiences for proactive measures to secure a

personalized, unique and memorable experience across multiple channels. This, in turn, enables

the customer to feel understood and valued, and more likely to develop a loyalty that will be a

good basis for customer retention, up-selling and cross-selling.

Data-driven technology creates true business value because it provides you with actionable tasks

in real-time, are scaled for the enterprise and remove human subjectivity via machine learning.

Machine learning encompasses the algorithms, optimization and learning tools that interact

with the data, thereby eliminating any manual interaction/intervention between the data being

generated and the messages and offers being delivered to the customers.

The key to delivering superior customer experiences is to contextualize the data, and get personal -

to understand your customers at the individual-level so you can interact with the proper messages

and offers that are pertinent to them, via the right channel, at the right time. When you do that,

you are truly customer-centric.

BEING A CUSTOMER-CENTRIC FINANCIAL INSTITUTION REQUIRES THE ANTICIPATION OF FUTURE NEEDS—LOOKING AT BEHAVIORAL PATTERNS, MARKET TRENDS AND USER EXPERIENCES FOR PROACTIVE MEASURES TO SECURE A PERSONALIZED, UNIQUE AND MEMORABLE EXPERIENCE ACROSS MULTIPLE CHANNELS.

Copyright 2017 NGDATA®

NGDATA’s next generation customer data platform, Lily Enterprise™, is the central nervous system of the customer-centric financial institution, and the single solution to power your customer experiences.

Visit www.NGDATA.com for more information.