Banking institutions are smart to make improving the customer experience a top priority. A mere 2% increase in customer retention provides the same financial benefit as a 10% cost reduction, and acquiring new customers can cost five times more than retaining existing customers. Management teams realize that those who improve CX first have a significant head start and will continue to benefit.
Although the turnaround time on CRM platforms has been underlined by banks’ CX push, it has always been a sore point for financial institutions. Even five years ago, the latest and greatest CRM and engagement platforms were ‘raw’ or ‘customer-creating’ platforms – they provided the infrastructure already coded into the software for users to personalize their customer relationship management.
The key phrase here is “customer-builder”. Generic CRMs are designed to be used by any business; they allow customization. But to use them, banks and credit unions must first tailor them to banking services and then further tailor them to their specific institution.
As anyone who has started a generic CRM can tell you, customization has downsides that can get in the way of achieving the desired results. Improving the customer experience takes years of planning, defining, and successfully building into a generic platform. If you encounter software idiosyncrasies that disrupt your progress, it’s up to you to fix the problem or pay a consultant to customize around the roadblock.
Institutions have never had time to customize their platform more, and today they have even less. This has created an opportunity for new CRM engagement platforms that target the pain point of time-to-return by creating technology purpose-built for the bank.
Most financial institutions have two big challenges when upgrading CX with technology. The first is the practicality of building a rig. Second, and perhaps more daunting, is figuring out the specifics of what they want to do with their platform. Generic platforms don’t solve any problems, but purpose-built platforms can solve the challenges banks and credit unions have when it comes to adapting to retail banking.
What is the baseline of customer experience in retail banking? What best practices have other banks and credit unions discovered? Platforms that focus on banking learn from CMOs and executives in retail banking, as well as experienced managers and digital leaders. This learning is not about sharing proprietary strategies; this is to retain the functionality of all banks and credit unions that upgrade CX.
Similar to a path where many feet have beaten a path, the purpose-built technology retains a general memory of how a banking organization has used it. It doesn’t share the specific steps taken by each individual user, but it does remember where many have gone.
This allows bank marketers to focus on defining unique experiences for loan onboarding or retention, rather than reinventing the wheel. They can also focus on strategic initiatives that set the marketing and retail banking departments up for success, especially as these initiatives support the growth and revenue goals of the institution as a whole.
Defining when a banker onboards a new depositor is a good example of a unique customer experience flourish. As a depositor works towards onboarding, the institution can decide whether the end goal of the onboarding journey is a meeting with retail bankers or completely self-service, unless progression of the depositor does not stop. Depending on the institution’s product and service culture, banking organizations are configured to achieve the desired version of the member or customer experience.
The competition puts a sharper focus on the need for industry-appropriate technology. Your institution can’t be forced to lay out the basics of your business while your competitor offers sophisticated CX. If a bank notices new competition for consumer lending, for example, CX customization is a dial it can turn to win loans, easing competitive pressures on rates.
When it comes to choosing CRM and engagement platforms, financial institutions have two options: a ready-to-run engine or a set of engine parts that require assembly. While starting with just coins has its appeal (you can build the rig as you go), it requires significant cost and time, increasing the risk that you will fail to achieve ROI wish.
Most institutions looking to improve customer experience need both a playbook for great CX and the right technology. Without a vision of what CX should look like, there is no blueprint for assembling a custom engine. A platform purpose-built for retail banking can take you further than a pile of coins.
Rebecca Martin is Marketing Director at Total Expert.