A Strategy For Growth
Creating the Customer-Centric Financial Services Institution
The concept of customer-centric financial services is simple. Most likely, you have already experienced it. It’s the feeling that an organization understands exactly what we want and – what’s more – delivers a service based on that insight. As truly satisfied customers, we not only spend more money with an organization, we become its advocates, convincing others to buy the products or services offered by the business that understands us so well. When this happens, real value is created from the company’s most important assets: relationships with the customers they already serve and with the broader consumer marketplace.
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Growing customer relationships has always been high on companies’ lists of strategic priorities. But now, more often than not, it occupies a top spot. That’s because financial services institutions (FSIs) face a number of converging forces that are challenging traditional growth strategies. Market consolidation and regulation place limits on your ability to acquire scale. You need to pursue opportunities in unfamiliar consumer segments. Meanwhile, you have to deal with increasingly well-informed customers who are being courted aggressively by a variety of new industry players.
But although the concept is simple, creating a truly customer-centric FSI – one that places customers’ behavior, wants and preferences at the heart of their business model – is more challenging. As a result, efforts at achieving customer centricity have generated mixed results. Businesses may find that they have experienced one or more of these common challenges:
- Have you invested in a customer-centric strategy only to discover that you lack the capabilities to execute it?
- Have you invested in major process improvement only to find diminishing returns in quality and productivity after the low-hanging fruit has been harvested?
- Have you looked to technology but been disappointed when the promised return on investment fails to materialize?
Why have these investments and strategies failed? Two main culprits stand out: an inability to formulate segment-level customer strategies that span products, channels and organizational boundaries and an inability to execute customer strategies across the entire business model. In short, taking a piecemeal approach to customer centricity is likely to provide you with disappointing results. In contrast, truly customer-centric companies create a single, personalized relationship with each customer that works across all layers of their operating models. They integrate products and channels. They anticipate customer needs. They deliver service through the customer’s channel of choice. They identify and fix any possible lapses in customer service before any harm is done. They ensure that customer information is secure. Who are these customer-centric companies? You may be surprised that they include Wal-Mart, Google and so on – and they are competing for your customer relationships.
For more than 45 years, EDS has helped its clients build and deploy capabilities that create measurable value from the relationships they have with their customers. At the heart of what we do is the understanding that organizations have to deliver on their promises to their customers. Our approach is driven around the need to deliver on our commitment to our customers so that they, in turn, can deliver on theirs. This paper summarizes what we have learned about what works and what doesn’t, to help you understand the market trends that will affect your ability to create customer value, how FSIs are transforming to compete in the customer-centric marketplace and how EDS can help.