2. Investing in data analytics
Banks should also look to invest in data analytics as customer insights will enable banks to gain a greater understanding of what motivates their profitable customers. Armed with insights, banks can also think beyond financial services partnerships too, such as offering airline lounge access or concierge services or allowing customers to pay for lifestyle services with accumulated loyalty points. The opportunity remains to reward customers for their loyalty in a manner that reflects their product holding and patronage and only a single customer view will facilitate this approach.
3. Defining digital differences
Traditionally, banks have considered investment in digital as a smart way to reduce costs - both in terms of personnel and real estate, rather than create an engaging, personalised customer journey. However, there is a real opportunity for banks to invest in customer centric offerings, whether that is through exceptional service delivery, or a new and convenient way to access information and services while on the move. The result is the provision of value that is based on customer needs, which in turn will drive revenues for financial organisations.
4. A clear identity
Instead of thinking about customers within traditional demographic boundaries or income-based segmentation, retail banks should be identifying and targeting customers based on behaviour and motivations. For example, Collinson Group research recently identified four groups of people (within the top 15 percent income bracket, the middle class mass affluent consumer) who display distinct attitudinal differences; namely the Prudent Planners, Stylish Spenders, Mid-Life Modernists and Experientialists. Findings indicate that these groups do contrast in the services that they want from financial brands, for example a large proportion value face-to-face interactions as well as digital services, while others prefer mostly digital experiences. Recognising these differences enables banks to build more engaging relationships with their customers.
5. The interchange conundrum
Finally, and as discussed a couple of times earlier, the regulation of interchange fees has also called for banks to think creatively about how they attract and retain customers in spite of this funding gap. Banks need to take a more progressive approach in order to overcome this regulatory pressure, such as working closer with merchants who may now be more willing to fund loyalty in partnership with banks, as long as they can be sure that they are getting incremental business for their investment. Adding truly valuable ancillary services and products that customers can buy can help generate new revenue, while at the same time preventing attrition.
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