The Power of the Modern Customer

In my previous article I listed the disruptive forces threatening financial services.

This is not simply about technological advancement. The harsh reality is that financial companies have fallen out of touch with customer needs. These disruptors have arrived to serve an unmet need.

"The harsh reality is that financial companies have fallen out of touch with customer needs. These disruptors have arrived to serve an unmet need."

In the era of the modern-day customer, more demanding and empowered than that of decades ago, should banks still be rolling out vanilla services like cheque accounts, credit cards, and rewards programmes?

Should banks still be classifying customers into vast segments based primarily on monthly income? Should they still be quantifying affordability and risk in the same way? Should they still seek to derive their non-interest income from monthly fees and transaction fees?

The entrance of new disruptors proves that most of these practices, embedded into the anatomy of a bank, often prevent the bank from meeting the modern customers’ expectations.

For another perspective on the needs and expectations of digital customers, we can look at The Open Group’s ‘ROADS principles’. These can be summarised as follows:

• Real Time: The customer can commence or progress a journey at any time, with responses and updates tailored in real-time to meet the customer’s evolving needs.
• On Demand:The service provider has the flexibility to adapt and adjust the services delivered to the customer on demand.
• All-Online: The customer is able to accomplish all activities and transactions associated with the journey online. An offline channel need only be used if absolutely required to handle a physical product or service.
• Do-It-Yourself: The customer is provided with the capability, and has the choice, to complete the activities and transactions associated with the journey alone. Interaction with a service provider representative is not required.
• Social: The journey is tightly integrated with digital social media, so at any stage of the journey the customer is able to access social media for advice, recommendations and feedback.

Financial companies’ general inability to respond  to these demands can often be linked back to fundamental architectures and tools.

These are the outdated architectures that are unable to conduct impact assessments, not able to fully leverage resources and technical capabilities, and not able to find meaning in the masses of customer data and documentation stored inside their four walls.

We can define this as the concept of Big Data: teasing out the learnings from the masses of structured and unstructured customer data streamed from various sources and systems - with the goal of creating customer-specific engagement tactics.

To fully understand the needs of the modern customer, it's important to focus on the customer journey as a whole.  In my next article I introduce The Open Group's Customer Experience Reference Model.