Business leaders like speaking about the importance of customer centricity. But when it comes to taking action and turning their organizations into enterprisewide client-centric entities, some are still having problems translating the theoretical concepts that they're familiar with into real, working strategies that become the core of the way they do business.
Standard Bank which has a 150-year history in South Africa and started expanding to other countries on the African continent in the 1990s is one company that has prioritized customer centricity by embedding it into its core beliefs.
Tapping into his years of experience both in very advanced markets like Japan as well as developing markets, Sandeep Deobhakta, executive head, Personal Markets, PBB Africa at Standard Bank, imparts some of the company's wisdom in becoming customer centric. Here, he shares four steps to successfully create customer centricity in the financial services industry:
1. Customer centricity starts with listening
Deobhakta points out that it all starts with customers. "You need to understand the context of their life stages and how financial products are a means to an end rather than an end in themselves." Therefore, the first step in the journey toward customer centricity is for business leaders to put their ears to the ground and really listen to what their customers are saying. This is an integral element in what Standard Bank hopes will be a winning strategy to becoming a client-centric bank.
Listening allows organizations to get a good understanding of their customers' needs and these insights can be used to ensure that all communications are tailored to individual customers. "The best sales people are the ones who listen and won't say anything until they really understand the customer, his history, and what he's looking for," Deobhakta says. Just like the best physicians listen to patients before making a diagnosis, financial professionals need to speak with their customers and understand their financial histories and their needs in order to provide the best recommendations.
2. Steer away from product centricity
Too often organizations focus on the profitability of their products. Instead, they should use insights gathered from Voice of Customer (VOC) endeavors to move away from being product-centric and put their customers at the core of their business. Rather than focus on products, business leaders need to change their mindsets and think in terms of what customers require to be successful in different facets of their lives. As Deobhakta explains, banks need to understand that when a client is borrowing money to buy a house or a car, the financial product is an enabler of that dream. Banks which understand this core principle are in a better position to ensure that their products fit well within the customer journey, helping them achieve their dreams as quickly and effortlessly as possible.
Recognizing the need to focus on its customers, a leading bank in Japan implemented innovative ways to be more customer focused, starting with proactively offering all the bank's services to customers when they open their first account. Any services that the customer didn't require immediately remained inactive until the client activated them online and began transacting. This Japanese bank also tapped into its cross-channel infrastructure to track customers' online investments and trading behaviors, allowing the bank to send the appropriate alerts and triggers in real time over mobile.
Deobhakta acknowledges that overcoming the product-centric mindset is still a challenge for the financial industry and several organizations are struggling with this culture change. Standard Bank is well on its journey from a product-focused to a customer-centric entity. Deobhakta notes that the key in this journey is having the right data that delivers the necessary insights which can be used to develop the customer value proposition.
3. Addressing the data conundrum
Data plays an extremely important role in helping organizations become more customer centric. Financial institutions, like most other organizations, are collecting colossal amounts of customer data both from transactions as well as from formal research and interactions with frontline staff.
However, many organizations are still facing challenges in turning this data into actionable insights. A major stumbling block lies in information silos that need to be bridged in order to give decision-makers a single view of the customer. One way to do this is to have a robust data platform that brings together data from different repositories, and is instrumental in helping banks identify potential customer needs and then engage with them on a very personalized basis.
4. Be culture sensitive
Customers are different and organizations need to understand the varying nuances that make them tick. Understanding culture is an important part of Standard Bank's strategy and this reflects in the core banking platform that the bank has deployed across the African continent. The organization understands that while customers' foundational needs are similar, their actions are likely to be dictated by local market and demographic influences, and the bank has adapted its system to reflect country specific regulations and processes, as well as social nuances. "It's necessary to look at these factors in each country and deliver the core needs within the proposition," Deobhakta explains. For example, a younger population - which chooses alternative mobile banking channels - may also be more concerned about providing a better future for their children and need help making savvy investments. Despite the subtle differences, organizations can leverage the knowledge gleaned from one region or country to replicate successes across the entire market.
Standard Bank has deployed this philosophy with noticeable success within its African operations, especially in assisting the growing group of middle class business owners who have no documented financial history and need access to financial help. Recognizing this trend, Standard Bank developed a special tool, SME Quick Loans, which uses advanced behavioral scoring models to determine client repayment ability.
Another recently launched Standard Bank customer-centric example is "Heartland Banking - the Diaspora offering from Stanbic." Understanding the financial and social needs of a very targeted customer segment led to the development of a range of products for non-resident Africans (NRAs) living outside of Africa. The offering includes a comprehensive product set of both asset and liability offerings, designed to suit the needs of both clients and their families.
Finally, financial services organizations need to understand that being seen as a customer-centric organization is not solely a positive marketing strategy. This is a sound investment which affects products and services offerings, sales process and distribution, infrastructure, as well as ongoing customer treatment which will lead to more satisfied customers. Then they will be more likely to remain loyal to the brand. Furthermore, customers who engage with an organization which understands them and engages in relevant practices according to their needs are more likely to become lifelong advocates or ambassadors of the brand.