customer-10-16-17.pngRetail banks face challenges from many fronts. Customers expect seamless, frictionless experiences that are secure and immediate. Fraudsters are working non-stop to compromise accounts and siphon off assets. Regulations and compliance requirements eat up capital, time and human resources. The fintech sector’s growth presents a threat to customer retention and traditional lines of business.

While those external factors do loom large, one of the most prominent (and least acknowledged) threats is within the bank itself. Siloed businesses, supported by legacy systems and coupled with legacy attitudes, can prevent growth and work to turn customers away from an institution.

When banks allow individual lines of business (LOBs) like credit cards to compete against demand deposit accounts and mortgages for the attention and business of a single customer, they unwittingly create a fierce, cannibalistic customer acquisition environment. Each LOB is competing against the others in the bank, as well as third-party providers, for individual priorities rather than promoting the good of the bank as a whole.

Siloed lines of business are technically inefficient, politically isolated and block a holistic view of both the financial institution (FI) and the customer. Leading FIs understand that breaking down the barriers between groups can open new ways of understanding and engaging with customers and deliver the superior experiences that modern financial consumers expect.

Benefits of an Enterprise Model
Research from the Temkin Group shows that when FIs improve their customer experience, the potential revenue growth for the institution is 27.5 percent in just three years. Improving that experience affects the entirety of the enterprise and can be most impactful when FIs adopt a holistic approach to internal systems.

Many of the individual systems used by specific LOBs are not set up to communicate with other systems in the FI. These disparate systems prevent the organization from mining important customer insights, resulting in the fragmented, generic experiences that turn customers away. By working to incorporate an enterprise-wide view of customer data that is LOB agnostic, banks can share information across individual channels, and provide a centralized view and understanding of each customer, resulting in more efficient and effective customer touchpoints.

To facilitate the enterprise-wide model, banks can implement a comprehensive decisioning layer that connects data from multiple sources, centralizes credit and fraud risk policies, implements business rules, and allows flexibility for real-time adjustments to accommodate regulatory and market changes. This decisioning layer will allow for greater transparency and documentation, as well as collaboration and cooperation between the various lines of business within the bank.

Adopting an enterprise decisioning model also helps automate risk control, while providing full auditability. Not only do customers get the benefit of a bank that has the full picture of their relationship, but banks also benefit by getting the best-of-breed solution to risk management and compliance.

Put Customers in Control
FIs can, and should, adopt an approach that puts the customer back in control of the relationship. Customers are not making a product decision. They are ultimately making a relationship decision, one based on the belief that the organization understands who they are and what they need. Offering a personalized, tailored suite of services helps foster trust, increase wallet share and drive loyalty.

When a bank enables their individual LOBs to have central, real-time access to all of a customer’s data, they improve the customer experience on all fronts. Customers expect, and demand, a bank to understand their unique needs whether they are in a branch, on the bank’s website, or using a mobile banking app. When the enterprise decisioning layer is in place, banks can confidently engage with the customer regardless of what channel they are using and know that they are providing that person with the right options at the right time.

As banking continues to evolve, the customer insights available through digital channels will grow in importance. Digital engagement gives banks a good opportunity to learn more about customers at the individual level and feed that input back into their central system. When a customer visits a branch and the teller brings up a product that the individual was reviewing on the website, that experience is likely to build trust, rapport and loyalty.

Banks that differentiate on customer experience, and specifically a customer experience informed from a central, enterprise decisioning layer, will be the most successful in the future.

Travis Tuss