This is the second part of our series on how banks can adapt to changing customer behaviors and expectations. We’re picking up on the last blog, which explored the “why” of this critical issue; this time we discuss the “how”. I am delighted to have my colleague Danelle Faust as a co-author again. She runs our financial services business within Accenture Song throughout the Midwest.
We’ve said before that strong customer relationships are part of the genetic code of mid-market banks. The irony is that at a time when these relationships are more important than ever, they are harder to build. In part, that’s because the competitive landscape is so crowded. But it is also due to the customers themselves.
Customer behaviors have become much more inconsistent, even paradoxical, in recent years. Little is static about what they think and do. How could it be, considering the state of the world? That’s why serving customers means seeing them as multidimensional and ever-changing people. It’s like the difference between seeing something in a spinning kaleidoscope of color, versus seeing something in motionless black and white.
Stop assumptions, start with data
Serving customers in the full context of their lives is called life centricity. Data is critical for mid-market banks to make it happen. Data insights help decipher what shapeshifting customers want from moment to moment and should support strategy and design of products, services and experiences.
Therefore, rather than making assumptions about what their customers want, it is important for middle market banks to do their due diligence to understand the paradoxical thinking that shapes their behavior. The key is to listen and learn from the data and engage with customers in two-way conversations. Banks are well positioned to do this. They have a huge amount of data about their customers. But mid-market banks often don’t have the cloud infrastructure and tools to access this data quickly and easily.
Increase value for customers and the business
Being a life-focused bank is not about making glowing proclamations in marketing materials. It’s about creating preference and loyalty by seeing and serving customers in the context of their lives. It’s a powerful approach that can improve business results. The latest research from Accenture Song reveals that the more life-focused an organization is, the more likely it is to stay relevant. In fact, lifetime-focused companies are three times more likely to outperform their peers on speed to market and nearly five times more likely to outperform their peers on customer lifetime value.
The research explores specific “games” that set these companies apart and help fuel growth. Three of them are especially relevant for banks in the middle market.
1. Broaden your canvas for value creation
Middle market banks should ask themselves what else they can do for their customers. It’s a natural question to explore as part of any effort to meet unmet needs in clients’ lives. This is what the 120-year-old Citizens Bank of Edmond is doing. In an innovative move to support its small business customers, the Oklahoma community bank is working with the Independent Business Owners Association to offer retail space on bank property. Instead of thinking through rigid, product-based blinders, the bank focused on what these customers needed most: a place to do business.
Beyond innovative programs like this, there is a generational imperative for mid-market banks to expand the customer value proposition. What’s important to the next generation of customers is very different. Take sustainability, for example. This is something that was not on most people’s radar when selecting a bank even ten years ago. Now, for many young people, it is a superior selection criterion.
2. Creatively transcend industry norms
It is one thing to expand the value proposition within the context of “what banks do.” However, it is quite another to push the boundaries and reinvent the fundamentals of “what banks may do.”
There is a strong case for change here. Customers are giving banks permission to be something different in their lives, as long as they provide value. Technology and ecosystem partnerships make it more possible to blur industry lines. And the benefit for clients can translate into top-line benefits for banks and help attract top talent.
Just think of the possibilities. Banks can take a page from the playbook of the disruptors that have disintermediated them and can explore new business models in adjacent areas like accounting services, staffing and marketing, for example.
3. Design a continuous pleasurable experience
The reality is that everything middle market banks do to wow customers depends on getting the experience right.
Banks can offer new services that offer great new value to customers. They may seek business models that expand customer relationships beyond the traditional realm of banking. But if banks don’t deliver life-focused experiences that meet customers where they are and address the human paradox, there is a huge risk that customers will turn to a competitor that does.
To avoid this, mid-market banks need to focus on simplifying and connecting to create a seamless experience for customers. This means connecting marketing, sales, service, analytics and technology so that experiences are consistent, regardless of how people interact with the bank. There is no place for siled data and technology serving a specific focus purely at the service of the bank. To be truly life-focused, the entire company must be laser-focused on the promise and working together to deliver on it.
Don’t be everything to everyone
Being more connected with customers opens up exciting possibilities for mid-market banks. But it can also be overwhelming. Remember, success is not about making all of these plays at the same time. It is also not a one-time activity. It’s an ongoing process of testing and learning to understand how to best serve customers by being relevant to their lives.
For more information on how to evolve towards life centricity to be more relevant to your clients, please contact me. here or connect with me at LinkedIn.
Connect with Danelle at LinkedIn.
Learn more about “How Middle Market Banks Can Play to Win.”
