Eighty-five percent of respondents to a recent survey by Big Six financial services firm Deloitte and Touche believe that retaining loyal customers will be a major challenge in the future. Little disagreement there, but a much lower percentage are “highly confident” their company is currently securing the all-important long-term relationships.
According to a recent study by Deloitte Consulting based on a written survey and in-depth interviews with 133 senior executives in the largest retail financial services institutions around the world, the vast majority of retail financial services executives feel a customer focus is critical to their future success. Following are some of the points for action the survey picked up from industry leaders.
A full 75 percent of industry executives interviewed say they need to be “more knowledgeable” about their customers in order to strengthen their customer relationships. That’s standard CRM, but unfortunately, financial service firms’ customer databases are currently aligned more along product and transaction bases. The industry recognizes a pressing need to integrate their customer databases, adding more customer-specific information, to provide a unified view of all of their existing relationships with each customer.
This not only will improve customer contacts and selling opportunities, but will help firms identify the right customers for their organizational goals by segmenting customers according to profitability. Naturally data mining and external customer databases, in wide use today, can do this. However, while 55 percent of respondents expect to use these tools extensively in the future, only 19 percent do so today.
Seventy-six percent of senior executives surveyed feel that the integration of delivery channels is important for strengthening customer relationships, yet less than half of them are “highly confident” that their current distribution mix anticipates customer needs. Tellingly, 74 percent of executives admitted that their organizations do not offer incentives for customers to use less expensive distribution channels.
Financial services institutions are waking up to their need to better manage delivery channels, primarily to enhance service to highly profitable customers. This has the added advantage of lowering costs associated with serving less affluent customers. Yet prospects are not good: An embarrassingly low 19 percent consider electronic delivery “very important” as a customer channel today, and although 63 percent believe it will be “very important” in five years’ time, most still have no formal plans to introduce online retail financial services.
Fifty-two percent of the retail financial services executives surveyed believe their organizations are “slow to adapt to new delivery channels,” such as the Internet, while 43 percent believe they are “slow to introduce new products.”
Much of the puzzling indifference to customer care can be understood in light of the almost complete absence of a customer-centric model for financial services until recently. In what is a given in many other industries, only 38 percent of the executives surveyed believe that developing a customer-centric business culture is “a critical management challenge.”
Today few financial services firms possess a deep understanding of their customers, or have an idea of the range of delivery channels available and the value of instantaneous customer-response capabilities. But in the coming years you’ll be able to tell the ones that do: They’ll be the ones in business.
