In the past few years, banks have been trying to gain a competitive advantage in the banking industry. However without the proper influx of technology into their banking architecture, banks are in the position of making minimal progress in the next few years. With technology savings, due to be in the millions, it’s important that banks leverage the available technology to provide better services and solutions to futuristic problems that banks and customers would be facing.

Red Queen Race!!!

Sounds like a formula1 race of Queens wearing red robes!!! is it not !!! Naah!!!. before your thoughts run amuck, Let me break the conundrum.

“Red Queen Race” is a concept introduced by “Charles Lutwidge Dodgson” also called “Lewis Caroll” in his work, “Through the Looking Glass”.

What this term intrinsically suggests is that “Humans need all their energy to just to continue surviving, but to continue excelling,

they need to push harder and move faster”

Banks are not exceptions to this “All Encompassing” philosophy. Banks are complex Enterprises, in the sense that,

  • They are quintessential to humanity,
  • They have to excel in catering to diverse customers (old,middle, young, genx, geny, genz, businessman, working professionals,  etc)
  • They need to work 24 X 7(at least that’s what is expected)
  • They NEED to “Put Customers First” and “Money Next”
  • They need to be always complaint to regulations and risk-averse
  • Yet They need to make a profit.

This does look like a task of Gargantuan proportions. Yes it is, but only as long as banks have a “Put Money first policy”.  With the “Money First Policy”, banks spend excessive amounts of money in building,top-notch digital platforms, build applications on emerging tech, hire fintechs to help them take an unimaginable(yet untenable) quantum leap in their technology platforms, to make their customers stick with them.

Make No Mistake, we have all heard the adage

“There are certain things in this world, that ONLY money can buy”.

It’s just that there is yet to be a Universal Currency that can Buy “A Satisfied Customer”

Let us also have to accept the fact that “Serendipity has its weird way of coming into our lives”.

In a similar way, Serendipity does kick in for banks as well and that makes them have loyal customers By Chance”. NOT “By Choice”

Irrespective of the fact that Banks with all good intentions transform their technology platforms so as to transform their customer experience, it does feel many times that they are like a guinea pig that keeps running inside a wheel, not knowing that it’s running but not progressing.

The Red Queen Race of Banks expects them to do more than technology transformations to truly transform their customer’s experience.

I reckoned, everyone loves a bit of melodrama in blogs, so, I threw in a few 🙂

Now, let us come to the meat of this blog, “How can Banks Win this Red Queen Race”.

1) Create & Nurture  “Put Customer First” Culture (in this purest sense)

Banks only prerogative is to put the “Customer First”. Let us look at some stats, 50% customers subscribe to 1 product in a bank, but only 5% of customers subscribe to 4 plus products. This 4% could very well be already very market savvy and know what they want. That puts the cross selling opportunities utilized by the banks to a very low number.

Why would any bank want to ignore these opportunities? What we should read from here is, opportunities need to be identified first, before getting ignored. This is where Customer Intelligence comes into play.

The “Put Customer First” policy, will help banks,

Create a more “customer curious” culture.

Build processes to understand the customers with a passion to serve the customers.

2)  Transform Account Centric Banking to “Customer Centric” Banking

The NPS(Net Promoter Score) of a Bank is directly impacted by the Customer Experience. It’s imperative that this “Customer Experience” is consistent, correct and complete for the Customer and across all the customer’s relationships with the bank.

Many banks have already taken the right step in creating a digital platform that focuses on easing the “Customer Journey”.

But, For a Bank to build a robust “Customer Centric” platform, they will need a Robust “Customer Data Platform”, that shoulders their “Digital Platform”.

So, How can Banks Build a Robust Customer Data Platform? , particularly when,

Customer Data in Banks today is fragmented, Silos and across many customer touches

Points. The cure is

2.1) by building a “One Truth Version”, of every customer, called “The Customer

Core Hub”.

2.2) by using strong Data Governance and MDM practices to ensure Correctness,

Completeness & Consistency of Customer Data

2.3) by Making sure that this “Customer Core Hub”, represents the sum total of all

the relationships, that a customer has with the bank.

That said, Is “Building Customer Core Hub” the panacea for all “Customer Experience” issues faced by Banks? . Sadly, No.

3) Customer Centric Data managed by the power of Machine Learning & AI

Data without a mechanism to extract insights or intelligence will just remain data. The real “piece de resistance” of a bank’s Customer-Centric practice be the focused use of ML and AI for specific Customer Centric Use Cases like

  • Build True Customer Segmentation
  • Provide great recommendation services
  • Learn from Existing Customer Journeys to predict “Optimal Customer Journey” for any   customers
  • Improve Customer Onboarding by better KYC verification
  • Create a flagship “Next Best Action” platform to preempt customer needs and “Put Customer First”
  • A Conversational AI, that can go above and beyond bank personnel and humanly Connect with the Customer without any bias or prejudices
  • ML and AI platform Combined with Robotic Process Automation can help in robust Data Management practices as well.

Stitching the above together is difficult, but not impossible. Particularly with today’s open source technology and tool portfolio available, banks no longer need to shell out a stupendous amount of money to build an “AI/ML Driven Customer Centric” Framework.

Banks, Irrespective of whether they are top tier, mid-tier or bottom tier, need their customer stickiness. This calls for quick action on building a data-driven Ai framework that can give them actionable intelligence on their customers.

Not having a “Put Customer First” culture will only see many current and future customers take the route of altogether abandoning banks and subscribe to tech giants like Amazon, google pay and apple cards, etc. This will only mean one thing

” BANKING WILL CONTINUE, BUT BANKS WILL NOT”

Banks know the fallout of such an event. I am positive that the age-old tradition of “True Customer Banking” goes back to its roots and focuses on “Customer Is the King” (albeit clichéd) model.

ML and AI based, robust data framework will steadily, yet Surely pave the way for banks. I am still Hopeful of it!!!….

Anand Subramaniam

Anand Subramaniam is a thought leader, start-up mentor and a data architect. He brings forth over 2 decades of techno functional leadership in envisaging, planning and building high performance bleeding edge technology teams. He is passionate about data science domain and has championed data analytics practicesin Banking and Financial Services realm and start-ups.