Until recently, providing financial services to customers has been the essence of retail banking. But now retail banks must offer a broader value proposition to customers. This calls for a radically new approach to distribution and marketing—banks must act as disruptors, reinventing themselves into what Accenture calls the Everyday Bank.
Unlike traditional banks, Everyday Banks connect with customers by building close relationships around three roles: advice provider, access facilitator and value aggregator. This focus marks the difference between being a commoditized utility and a trusted confidante that convenes a digital ecosystem around customers.
What’s the value of becoming an Everyday Bank?
According to Accenture research, there is a gap of 50 percent in operating income between banks that become Everyday Banks and those that do not. But the Everyday Bank doesn’t just offer value for retail banks—it also offers value to customers. The Everyday Bank:
- Experiences more opportunities to cross sell, extend offerings, grow sales volume and create new revenue streams.
- Gains more omnichannel customers and an opportunity to optimize the branch network to lower costs.
- Creates an immersive relationship with customers to increase penetration of purely digital customers and cuts digital churn by up to 50 percent.
- Differentiates itself from new entrants and competitors through its ability to operate in a highly regulated environment with a varied and coherent value proposition.
- Provides value to customers through a discount ecosystem.
Barriers to banks fully realizing the business outcomes they need
Recognizing the need for outcomes like these, most retail banks have taken steps to grow revenue, cut costs, improve the customer experience and defend against the competition. While the banks’ actions do have an impact, they generally do not go far enough to sustain gains because of a number of factors, including:
- Banks cannot differentiate themselves on technology alone.
- Isolated and tactical distribution and marketing investments may not align with a bank’s strategic vision of change.
- The creation of new roles to better coordinate silos and investment in new channels can add additional costs and complexity.
Areas for banks to focus on
With the right digital execution building blocks, retail banks can plot how they will become Everyday Banks. Although the journey will be different for every bank, there are four key focus areas that banks must address:
- Brand. Determine and own a distinct identity as an Everyday Bank.
- Customer experience. Design an extraordinary Everyday Bank customer journey.
- Partnerships. Orchestrate an Everyday Bank digital ecosystem.
- Technology. Develop the digital platform that powers the Everyday Bank.
With so much at stake—the successful Everyday Bank journey must have impact in at least the first 12 months—retail banks should explore approaches that can accelerate their timeline while lowering risk and cost to serve.