Finance companies need to balance ‘cool versus creepy’ as getting closer to customers becomes critical in a more competitive environment, according to new research.
The warning comes from leading finance industry executives who have put forward their views on how the industry can use technology to establish closer relationships that generate long-term partnerships.
While ‘customer-centricity’ is the objective, banks and financial services are often hampered by large and disparate teams, which makes it difficult to offer a united service.
Different business units have their own goals, objectives and KPI’s, even though they share the same customer.
Technology is seen as the answer, as data insights make customer-centred business a realistic model.
According to One Connected Community, which focuses on the role of technology in customer experience, it has never been so important for all brands to use available data to deliver outstanding and personal customer service.
In a newly-published whitepaper, called ‘Know Your Customer. Solve Their Problems’, author Jamie Harding (pictured above), head of research at OCC, identifies three key areas of focus.
- Bridging the gap between human and digital touch points
- Enabling a single view of the customer
- Getting personalisation right (and understanding when personalisation goes too far)
Barriers to success
The research points out two potential barriers to success.
The first is how to manage very large quantities of personal customer data in a secure and legal way.
Matthew Harwood, head of product analytics at Coutts, says: “The General Data Protection Regulation and restricted data regulations means being more mindful of what data you are storing, where you’re storing it and how you’re using it.
“Data will become less about hoovering it all up, but more like a hot potato where you want to extract the learnings as quickly as possible.”
OCC argues that customers are generally quite happy to give permission for technology companies like Apple to use their data, because they see a real value exchange.
Apple adamantly refuses to share data with governmental institutions despite significant pressure, reinforcing the idea that the data is used for the benefit of the customer only.
For banks, a place where customers are willing to share their data because they see a real value exchange and they believe sharing their data is in their best interest, is a position to aspire to.
Taj Sumal, head of digital solutions at RBS, says: “Trust will come more and more into play when it comes to money, which is such an emotional investment. Personalisation is vital in building trust and is a real differentiator.
“Over the next five years there’ll be a much greater emphasis on generating trust through real personalisation. For that you must truly understand what works for your customer.”
"Cool versus creepy"
However, OCC’s research says suppliers must tread a fine line between ‘cool and creepy’, using data to provide a better experience without customers feeling uncomfortable with how much a supplier knows about them.
The borderline between being helpful by tailoring services accordingly and causing alarm bells in a customer's head is very thin, it says.
Consumers are getting increasingly precious over their data. So, trust between bank and customer is extremely important. The key is effective personalisation.
Megan Caywood, chief platform officer, Starling Bank, says: “Maintaining trust and a fair value exchange means going back to basics: Segmenting demographics, AB testing and fine tuning which messages resonate, with whom, how you show them and when.”
This may also mean putting personalisation before profit, the report argues.
Chris Gledhill, CEO, Secco, says: “If a customer goes into a store and the assistant recommends a cheaper product, it’s not better for business in the short-term, but it’s a way of maintaining customer loyalty as they know they can expect impartial advice."
Similarly, if a bank recommends not getting a loan, and instead advises on a better method of managing personal finances, it creates an emotional connection that builds trust by crossing the line into genuinely helping to people.
Gledhill adds: “If happy customers were the most important KPI for a bank, it would be a fantastic model.”
A customer-centric approach and profitability are far from mutually exclusive, OCC says.
It argues that it will be those whose culture is committed to the customer that will win as long-term relationships outweigh short-term profits.
Patricia Moore, account director, Ciber, says: “The customer owns their own data. Monetising that data will be key to success. Whoever has the relationship with the customer will be in pole position.”
OCC is a platform for inspirational stories that highlight how technology and engaging customer experiences (CX) make a real difference to the bottom line.
It invites influential figures to challenge, transform and define the future of CX through industry talks, consultancy and multimedia research.
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