According to a study published by the French Banking Federation (FBF) in February 2021, one of the key expectations that French customers have of their bank is availability and accessibility. The study points out that every level of availability is essential, with 83% reporting that their ideal bank would allow its customers to use its services via the Internet or in a branch, depending on their preferences. And it is this notion of preference that is currently a significant issue for many organizations in the banking sector—many of which still operate in traditional ways. Customer consumption patterns have changed significantly in recent years with the advent of digital technology and the arrival of new players on the market. Their almost exclusively online model makes them more aggressive competitors. How can banks remain competitive in such an environment? How can you identify the needs of each one of your customers and ensure that you meet their increasing expectations of high availability?
By completely rethinking your approach to the customer relationship! Besides providing access to different services online or in-branch, banks must also offer consistency and quality of service across all channels, regardless of the customer journey, in real-time and on a large scale. For banks that have chosen to integrate relationship marketing levers into their strategy, a digital transformation is indeed within reach.
The banking sector: a runaway customer base and market/on the verge of slipping away
Autonomy, accessibility and immediacy—today’s customer uses banking services like any other product that can now be purchased online. Because of digitization, customers seem to be more distant and harder to satisfy in several ways. They are sharp, “multi-banked” and expect the highest quality services adapted to their needs and consumption patterns.
Of course, competition from 100% online neobanks has boosted this new consumer trend while developing a more flexible and affordable model, shaking up the market with particularly competitive rates. Though not entirely obsolete, the relationship of trust and availability—widely represented by the banking advisor—is no longer as central as it once was. Many customers prefer ties to be more informal and toned down if they have direct access to specific services such as account monitoring and remote transactions.
For banks with physical branches, this is a challenging economic context. But even though it marks the end of a traditional way of working, the model itself retains all its potential. While customers now want a more active role in the relationship they have with their bank, they still expect support. It’s just that this support should be provided in a hyper-personalized way, on a par with the incredible possibilities generated by current technologies. In other words, “reaching out” via modern channels to send the same message to every customer is no longer perceived as sufficient. Each individual expects a multifaceted customer experience—which includes the branch and banking advisor—as close as possible to individual consumption habits and, above all, in direct response to individual needs. The annual or even quarterly sales strategies are thus a thing of the past. We are now in the era of building a hyper-personalized customer relationship with each customer. And this challenge cannot be met unless we draw upon the analytical and individuation capabilities of the tools provided by artificial intelligence.
Relationship marketing: customer knowledge enhanced by in-depth use of data
Banks can now build the capacity necessary to exploit all available customer information with greater precision than ever before, which allows them to adopt a commercial approach entirely focused on customer satisfaction.
What’s more, gaining in-depth knowledge of these customers leads to a better understanding of who they are, how to meet their current expectations and predict their behaviors (particularly the risk of churn).
Socio-demographic data (identity, gender, age, profession, address, household composition, etc.), banking history, contact with customer services (phone calls, emails, responses from sales meetings, etc.), and browsing history are all sources of direct information or indicators of customer habits and intentions. The more data you have to process, the more refined your customer knowledge will be—which translates into commercial opportunities (communications or offers) that are more relevant, timely and meaningful for the customer. The goal is to personalize the customer experience as much as possible. Through detailed analysis, messages must be well-timed and sent via the preferred channel (text message, email, telephone, etc.). Content should be adapted to meet individual expectations—even if that means only sending a message to keep the commercial relationship (rather than an offer of services) active. It could also mean not contacting the customer until a perfectly relevant communication opportunity comes up. By contacting a customer only when communicating the most relevant opportunities, the odds you will spark their interest, satisfaction and thus commitment go up exponentially.
Transform to perform: Individuation Marketing® applied to the banking sector
In concrete terms, this approach is carried out on a large scale with impressive accuracy while respecting the customer. It involves regularly feeding a maximum of customer data to high-performance analytical tools and delegating the decision-making process to software enhanced with artificial intelligence. In real-time, the latter is able to decide between every possible opportunity, based on the set of business objectives (increased net banking income, margins, etc.) and constraints (commercial pressure, eligibility logic, etc.). More importantly, these analyses are carried out continuously while being adjusted to match each interaction with customers.
In practice, banks that call upon a company specialized in data and predictive marketing to help them follow this type of process must choose from a number of events, based on the data they wish to activate: decrease of customers equipment rate drop in cash flow, customer loan due date, payment abroad, diminished savings account, customers who are inactive for X number of months or who are nearing legal age. In essence, such events are used to automate marketing actions or trigger alerts. In the latter case, the bank’s sales teams may choose to create a specific scenario to match a particular event. For example, when a customer’s cash flow suddenly drops, which can be an indicator of potential churn, or when a customer loan suddenly comes due, additional information may be necessary. These events signal the need to get closer to the customer concerned; you should better understand their situation and move forward with the most appropriate marketing action. Every customer is unique. For example, the most relevant action to take may involve sending a message well before a loan becomes due to offer a saving product instead of simply inviting the customer to take out a new loan to cover the old one. This option may have been derived from calculating scores and analyzing the account histories of customers in similar situations.
For firms specialized in relationship marketing, much of their business expertise clearly comes from their ability to refine the lessons they have learned from events specific to the banking sector. In this way, they can help their partners build relevant scenarios using opportunities that were spotted during the process of exploiting customer data.
For their part, banks have much to gain from their use of Individuation Marketing®. With hyper-personalized marketing communications—thanks to analytical and automated solutions—marketing teams are free from repetitive and time-consuming tasks. They can then focus their energies and talents on creating messages and offers that meet customer expectations as closely as possible. Not only will marketers rediscover their passion for the profession, but customers will also experience greater satisfaction.
However, an individualized customer experience demands a streamlined customer journey. Regardless of the channels used (agencies, websites, mobile apps, etc.), the experience as a whole must be consistent, flexible and capable of relaying critical information. The processes needed to achieve this level of hyper-personalization also promise the following: increased productivity, more efficient use of existing structures and the high added value of physical branches/availability, which neo-banks can’t always offer.
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Les Français, leur banque, leurs attentes, IFOP, février 2021