This is the second part of our series on how banks can adapt to changing customer behaviors and expectations. We’re picking up from the last blog, which explored the “why” of this critical issue; this time we discuss the “how”. I’m thrilled to again have my colleague Danelle Faust as co-author. She leads our financial services business within Accenture Song across the Midwest.
We’ve said before that strong customer relationships are part of middle market banks’ genetic code. The irony is that at a time when these relationships matter more than ever, they are harder to build. It’s partly because the competitive landscape is so crowded. But it’s also because of customers themselves.
Customer behaviors have become much more inconsistent—paradoxical, even—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 ever-changing, multi-dimensional people. It’s like the difference between seeing something in a whirling kaleidoscope of color, rather than in motionless black and white.
Stop with assumptions, start with data
Serving customers in the full context of their lives is called life centricity. Data is fundamental for middle market banks to make it a reality. Data insight helps decipher what shapeshifting customers want moment to moment and should underpin strategy and product, service and experience design.
So instead of making assumptions about what their customers want, it’s important for middle market banks to do the due diligence to understand the paradoxical thinking that shapes their behavior. What’s key is to listen and learn from data and engage with customers in two-way conversations. Banks are well positioned to do this. They have a wealth of data about their customers. But middle market banks often don’t have the cloud infrastructure and tools to access this data quickly and easily.
Boost value for customers—and for the business
Being a life-centric bank isn’t about making sparkling 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 outcomes. The latest Accenture Song research reveals that the more life centric an organization is, the more likely it is to stay relevant. In fact, life-centric companies are three times more likely to outperform their peers on speed to market and almost five times more likely to outperform them on customer lifetime value.
The research explores specific “plays” that set these companies apart and help drive growth. Three of them are especially relevant to middle market banks.
1. Broaden your canvas for value creation
Middle market banks should ask themselves what more they can do for their customers. It’s a natural question to explore as part of any effort to meet the unmet needs in customers’ lives. This is what 120-year-old Citizens Bank of Edmond is doing. In an innovative move to support its small business customers, the Oklahoma community bank works with the Independent Shopkeepers Association to offer retail spaces on the bank’s property. Instead of thinking with rigid, product-based blinders on, the bank has zeroed in on what these customers needed the most—a place to conduct business.
Beyond innovative programs like this, there’s a generational imperative for middle 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 wasn’t on most people’s radar in selecting a bank even ten years ago. Now, for many younger people, it’s a top selection criterion.
2. Creatively transcend industry norms
It’s one thing to extend the value proposition within the context of “what banks do.” However, it’s quite another to push the boundaries and reinvent the fundamentals of “what banks can 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 deliver value. Technology and ecosystem partnerships make it more possible to blur industry lines. And the benefit to customers can translate into topline 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, staffing and marketing services, for example.
3. Design a delightful experience continuum
The reality is that anything that middle market banks do to wow customers hinges on getting the experience right.
Banks may deliver new services that offer great new value to customers. They may pursue business models that extend customer relationships beyond the traditional purview of banking. But if banks don’t deliver life-centric experiences that meet customers where they are and address the human paradox, there’s a massive risk that customers will go to a competitor that will.
To avoid this, middle market banks should focus on simplification and connection to create an experience continuum for customers. This means connecting marketing, sales, service, analytics and technology so that experiences are consistent however people interact with the bank. There’s no room for siloed data and technology that serve one specific focus purely in service of the bank. To be truly life centric, the entire enterprise has to be laser-focused on the promise and work together to deliver it.
Don’t be everything to everyone
Becoming more connected to customers opens up exciting possibilities for middle market banks. But it can be overwhelming, too. Remember, success isn’t about pursuing all of these plays at the same time. It’s not a one-time activity either. It’s a continuous process of testing and learning to understand how to serve customers best by being relevant in their lives.
Connect with Danelle on LinkedIn.
Learn more on “How middle market banks can play to win.”Read report