Customer-oriented crisis changes in the financial services industry

Recently, I had the pleasure to talk with marketing executives at some financial institutions and retail banks in mainland Europe. You might not immediately think “pleasure” when thinking about banks but to me, it really was a pleasure. The reason: during these conversations, I was surprised to see how far many of them stood regarding social CRM, cross-channel marketing, customer-centric business processes, mobile and increasingly content marketing and social media. However, when it boils down to the connection of front end customer-oriented operations and the back office, there’s still a lot of work, as there is regarding culture in retail banking.

When comparing the companies I talked with (of course I didn’t talk with all banks), with businesses from other verticals, it occurred to me that the financial services industry was probably among the most innovating ones right now in front-end customer innovations. The integrated marketing view also seems to become more important. But then again, the financial services industry has a lot of catching up to do with rigid cultures and gaps all across the board, standing in the way of genuine digital transformation.

If my observations are more than that and indicate a trend, clearly there must be a reason for it. And of course there is a very good reason why many corporations can learn a lot from the banks and financial institutions I had the pleasure to connect with. Unfortunately, most of the positive evolutions concern the front-end of customer-facing aspects. When it boils down to the connection with the back office side of things (indispensable for true end-to-end optimization) there is still a lot of work. Anyway, we need to start somewhere…

I do not have to say that these companies have been hit very hard during the financial crisis. As were their customers. It has been a true blood bath here and there and trust in the industry sunk deeper and faster than the Titanic.

So how did many businesses in the industry react from a marketing perspective? Among those I talked with four key trends emerge in a reality where mobile, direct and digital channels become ever more important in retail banking (and other financial services industry segments such as insurance).

1. An almost obsessive desire to be as transparent, “human” and participative as possible

A big turn-around that still might not always show but that is clearly going on in this industry that traditionally has an image problem. It is clear (look at advertising campaigns, for instance) that many banks are working on that. It shows even more when looking at the underlying changes, regarding both processes and organization, for now mainly on the marketing and CRM front, however.

2. An almost equally obsessive desire to provide a consistent and integrated customer experience

And this across all channels: email, social, mobile, website, call centre and certainly the bank centres, local branches and bank managers. This leads to a remarkable change, in fact: when online banking became mainstream, financial services industry organizations, especially retail banks, reduced head count and closed smaller branches. Now many banks are opening them again to restore the personal contact with their customers. Whatever the future will bring: human interaction will continue to play a key role, even if the areas where it matters and how it is made possible will change. And here as well back-office and legacy IT structures and rigid silos stand in the way of practicing what is preached.

3. A clear move towards data centralization, cross-channel marketing and getting a single view on the customer.

The need for consistency across all channels obviously plays a role in this. But the local bank managers as well: they are becoming more important in feeding data warehouses and CRM systems. The same is done using online channels and social media, getting banks more in the social CRM space with a clear focus on the customer who is key in defining the how, when, where and what of all interactions. The opposite goes as well: all data are provided to everyone that is in touch with the customer, anywhere and anytime.

4. The adoption of social media and social CRM processes and strategies

These include sometimes very far reaching cultural changes and profound change management. Customer centricity is key and social is used both for campaigns (to strengthen the human dimension and transparency message, while regaining trust) and business processes.

These observations are obviously personal and based on some meetings with a few banks. On top of that, I only talked to businesses in the European financial services industry, predominantly in the Benelux. Will all these customer-facing changes and the increasing focus on an end-to-end customer experience be enough and more than marketing efforts to show the changing mentality or will more be needed? You know the answer…

However, I’m quite impressed and convinced about how the execs I talked with are really getting it. It’s probably again a proof that sometimes a crisis is necessary to change things for the better. And I’m sure it’s more than a personal observation. Banks have no choice than to regain trust, put customer first, involve their ecosystem and get very close and personal in customer relationships. Now connect the dots with the rest of the business and move beyond the marketing side of things in the financial services industry.