The banking and capital markets sector is being transformed by increased competition, regulation and globalisation.

Today Financial Institutions are faced with a Choice - Grow or die. To grow financial institutions must put their customer first and gear their cultures to put the customer first. It means breakings down hierarchies to ensure there are served effectively and efficiently in their first contact. This involves motivating staff simultaneously to ensure the vision is fulfilled.

Based on survey results financial institutions are more focused on financial performance metrics than on customer related metrics. Data analysis is more focused on their product histories rather than their life time value or loyalty profiles.

Tomorrow's leaders will focus on the following three areas:

Technology

Improving IT systems cost effectively will be the top focus and priority ensuring data retrieval in real time and to analyze customer behavior to follow their opinions, needs and changing preferences.

Information

Intelligent information storage and retrieval is the key for growth in the coming decade. The need is focused and filtered data providing a single screen view of customers. Market leaders also use customer data for pore sales purposes - whether using customer acquisition models to identify new branch locations, churn models for improved retention or customer life cycle models to design and link different products.

People

The qualities of customer facing employees are critical to managing loyalty through handling complaints effectively and efficiently. The wrong people can damage customer satisfaction driving down revenue growth. The leaders would be those who focus on the problem, make the necessary investment on their people and integrate their approach to Human resources.

• Abandon Product Silos – Existing customers will be the growth drivers for most financial institutions. This requires making the best use of each customer by sharing data across products lines.
• Understand the Customer – Anticipating and understanding changing customer needs is a challenge as well as a necessary growth driver. This required Analyzing demographic data to offer tailored products to individual customers and to view the customer both from a present as well as a future value perspective. This helps organizations reduce churn as one of the reasons customer defect is due to changing requirements.
• Identify and appoint a Customer Champion- In most organizations responsibility for customer experience lies with the head of marketing and sales. It is necessary to have a champion to ensure an outside-in perspective and to represent the customer insights to make lasting key decisions.
• Empowering Customer Facing Staff – The action happens in the front line and these individuals are very important for organizational growth. Interactions with customers during complaints and effective resolution of the same have a greater impact on customer loyalty than product performance or process efficiency. Empowering employees to handle issue at the first attempt are key measures for effective customer service.
• Follow Suitable Customer Metrics – Financial institutions mostly collect financial metrics such as average revenue per customer rather than non financial metrics such as customer satisfaction and loyalty. Surveys conducted prove that non financial metrics are more effective than financial ones and this requires encouraging employees through measurements and rewards to foster better behavior.

We will definitely see a lot of activity in the near future with Banking and Financial Market players incorporating the above points through restructuring to ensure they still maintain a competitive edge.