The bank will never become a major player in a customer’s lifestyle, but should still be part of it
As the behaviours and needs of both society and consumers change – and as the rise in digitally focused brands and service providers is proving – if a brand does not become an integral part of its customers’ life and lifestyle, it will at best become commoditised and experience margin compression, and at worst it will be disintermediated.
This applies across all industries and markets – and banks need to pay attention.
The most recent example comes from the US retail market where, during the COVID-19 pandemic, Target has achieved a 10.9 per cent growth in revenue and seen customer traffic grow by 4.6 per cent, while Walmart has seen traffic decrease by a significant 14 per cent. The difference between the two retail giants is that Target was quick to realise, react and adapt to the change in the needs of its consumers, doubling down on digital ordering and store pick-up.
As product providers, Target and Walmart can be seen as very advanced cores. But Target has differentiated itself through leveraging advanced digital technology that enabled it to better understand consumer sentiment and the needs of its customers, so that it was in a position to dynamically adjust and adapt to changes in those needs in near real-time as they were altered by the pandemic.
The critical part of this example, and the reason Target has continued to win share of wallet during what is proving to be one of the most challenging times for retail in recent history, is that it took an integrated approach to adapting to change. It leveraged all its channels – including brick-and-mortar – to provide its customers with a fully integrated, seamless experience where the customer felt fully in charge of their interaction at every step.
This is the holy grail for banks – known as empathic banking. Empathic banks are able to identify critical events in the lives of their customers and react to those moments to provide flexible, tailored services that add real value to the customer and drive loyalty and expanded wallet share for the bank.
But the ability to truly and dynamically adapt or adjust the right financial service offering to the right customer at the right time based on the triggers caused by these critical moments can be challenging. Simply implementing a digital platform on top of a core isn’t going to work. Neither is relying on a core platform – no matter how advanced – that doesn’t have a consumer-centric digital engagement and orchestration layer.
Banks need an integrated approach if they want to evolve to become an integral part of their customers’ lifestyles. If a bank’s core and digital platforms are not seamlessly integrated, it will not be able to provide the level of flexibility needed to identify and dynamically adapt to changing consumer behaviours and create new or adjust products and services in a timely fashion.
by Michel Jacobs, Chief Sales Officer for Technisys.
To learn more about an end-to-end core and digital banking platform that can help you get the flexibility you need to adapt and adjust, visit technisys.com.