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Customer Experience Management (CEM) for Banking and Financial Services

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Customer Experience Management (CEM) for Banking and Financial Services A point of view Abstract The retail financial services sector has traditionally been a large user of Customer Relationship Management
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Customer Experience Management (CEM) for Banking and Financial Services A point of view Abstract The retail financial services sector has traditionally been a large user of Customer Relationship Management (CRM) solutions, in particular to support retail branch and call center sales and service operations. More recently, we have seen increasing interest in ebanking and mobile banking solutions to meet the changing demands of the mobile consumer. We have also observed a rising level of inquiries from financial services companies that are revamping their CRM strategies for specific subsectors such as wealth management, asset management, and corporate and investment banking. There has been a steady growth in the number of banking and financial services (BFS) companies that plan to invest in improving customer experience compared to It is very evident from ongoing market research and case studies that banks are using customer experience management (CEM) as their strategy to reap the biggest rewards in profitability, growth and sustainability. Strategies that are currently implemented in the BFS sector to enhance customer experience include integrating CRM systems with multi-channel platforms, providing internal training to every department to incorporate customer experience objectives across the bank, and managing voluminous unstructured data received from various channels. Customer portfolio management is the key In identifying customers that are worth the cost of long-term relationships, it is useful to consider their lifetime value. It makes the most sense to build relationships with customers whose lifetime value to the company is the highest. Thus, while building relationships, companies should focus on customers who are currently the most profitable, likely to be the most profitable in the future, or likely to remain with the company for the foreseeable future and have acceptable levels of profitability. Every bank would like to differentiate the treatment given to its most valuable customers. However, calculating the value of the customer relationship to the bank can be a challenge. In today s world, a customer is likely to leverage all the business domains of a bank, such as savings accounts, loans, credit cards, portfolio management and investment banking. He is also likely to use multiple channels to interact with the bank, such as voice, , mobile, web and social media. Hence, it is critical for a bank to get a 360-degree view of the customer across all relationships and channels. This also helps in designing service levels to maximize the potential of all customer relationships. From CRM to CEM the journey for banks Banks have traditionally limited their CEM efforts (if any) to periodic tangible rewards and third-party gifts. They now need to seriously think about going beyond single dimensional rewards, and focus on customer experience as a holistic objective. For this, they need to focus on providing customers with incremental benefits based on the value they bring in. Some banks are starting to recognize that usage based customer segmentation will not help in identifying their highest value customers. Segmentation techniques based on customer value would be required to ensure that investment is focused on areas that will most impact customers overall experience. Employing enhanced data mining methods on social data, streamlining and improving order-to-cash processes and seamless handling of multiple customer touch-points will help banks pin-point areas that have the highest impact on overall customer experience. The CEM journey challenges As with any other transformational initiative, the transition from traditional CRM to CEM is also fraught with a plethora of challenges - ranging from organizational to technical issues. Some of the key challenges to the transformation include: Challenges in the CEM journey Inability to link customer interactions across channels Lack of integration across multiple systems Need for longer training cycle for front-office personnel to become productive Challenges in executing a CEM strategy Complexities in integration with existing legacy applications Higher resource investment than anticipated Internal resistance to change Biggest challenges in improving CEM capabilities Difficulty in defining requirements Creating a single view of customer data and information Measuring results Despite the above challenges, a CEM transformation initiative should be a critical consideration for all banks. A failure to ramp up effectively in this area may result in opportunity cost due to loss of cross/up sell opportunities, reduction in brand equity and penalties due to non-compliance. Cross-channel support is another imperative Today s customers prefer to communicate through various channels, both physical and virtual. Hence, the ability of a bank to seamlessly integrate multiple channels is critical, not only to obtain a true customer-centric view, but also to enhance customer experience. True cross-channel integration in the context of a bank should enable integration between call centers, ATMs, branches, mobile devices, online banking and social media. BFS companies should use social analytics to listen to customers as part of their product development process. They must also use crowdsourcing and other social capabilities on websites and other locations to identify what new financial services consumers are interested in and willing to pay for. BFS Websites and Self Service Portals -The bank s customer facing portals and websites need to be designed to provide an enhanced and consistent web experience to customers. The portal should have intuitive wizards, or process flows for product purchases, renewals, services, and service request management. Social Networking - Customers are exposed to various competitors products and services when they interact with their friends. BFS CEM initiatives should fully leverage social networking channels to increase brand awareness and expand customer base. For example, information about an experiential reward given to a premium customer can be posted on his social network page. When other customers like the product or service or have a specific positive experience to share, it would be directly broadcast to all his friends and gain more publicity. On the other hand, as a customer retention effort, a negative experience described by an influential blogger can be voluntarily targeted by the bank as an internal service request. The bank should follow it up, bring it to closure and report successful resolution on the customer s blog page. With such deep listening and social skills, banks can gain more brand publicity in online communities. Measuring CEM in BFS Priority for Next 12 Months Operational Excellence and Reputational Presence Transforming insights Customizing interactions data collection Customizing tools for Capturing key life stage events monitoring Delivering seamless services analysis Providing quality advice Hiring Providing prompt resolution Empowering Sustaining a strong culture Training Customized Value Propositions Organization Process Info & Te chnology Current Capability (X) the current capability for delivering exceptional customer experiences is [1=Poor, 4=Good, 7=excellent] (y) the priority for improvement in the next 12 months is [1=Very Low, 4=Moderate, 7=Very High] Figure 1: Measuring Customer Experience Various metrics such as sales metrics, customer referrals and average lifetime value should be considered while measuring the success of Various metrics such as sales metrics, customer referrals and average lifetime value should be considered while measuring the success of CEM initiatives. Sentiment analysis, customer retention ratio, wallet share, net promoter score and sales revenue should also be examined to measure the success of BFS CEM initiatives. Invest in engineering CEM at all levels Ensuring excellence in the delivery of a bank s products and services for both common transactions and critical Moments of Truth is the foundation of successful customer experiences. Conclusion In order to enhance customer experience, banks need to be prepared to revamp or improve their existing CRM systems for a better Return on Investment (RoI) on their CEM initiatives. They should leverage advanced analytics that can predict and analyze customer behavior and complement their CRM systems with extra intelligence. Banks also need to select apt implementation and deployment strategies from SaaS/Cloud based or service models. Innovative and proven data warehousing and mining technologies should be implemented to derive insights from huge amounts of data received from various channels. About the Author Dinesh Hargunani is the CRM Pre-sales lead for TCS' BFSI unit with 20 years of experience in implementing enterprise solutions. He has led many successful engagements and implementations, and has worked extensively with banks and retail clients globally. Ritabrata is an expert in Oracle Loyalty and Marketing products and has been a lead product manager for the development of both the products at Oracle Corporation. He is the solution owner of the Customer Experience Management (CEM) solution from TCS - a strategic initiative to re-brand the joint positioning of traditional CRM applications with emerging niche CRM products. He is also involved in conceptualizing and designing go-to-market initiatives and solutions in Loyalty and Marketing. Contact For more information about TCS' Banking & Financial Services, us at About Tata Consultancy Services (TCS) Tata Consultancy Services is an IT services, consulting and business solutions organization that delivers real results to global business, ensuring a level of certainty no other firm can match. TCS offers a consulting-led, integrated portfolio of IT and IT-enabled infrastructure, engineering and TM assurance services. This is delivered through its unique Global Network Delivery Model, recognized as the benchmark of excellence in software development. A part of the Tata Group, India s largest industrial conglomerate, TCS has a global footprint and is listed on the National Stock Exchange and Bombay Stock Exchange in India. For more information, visit us at IT Services Business Solutions Outsourcing All content/information present here is the exclusive property of Tata Consultancy Services Limited (TCS). The content/information contained here is correct at the time of publishing. No material from here may be copied, modified, reproduced, republished, uploaded, transmitted, posted or distributed in any form without prior written permission from TCS. Unauthorized use of the content/information appearing here may violate copyright, trademark and other applicable laws, and could result in criminal or civil penalties. Copyright 2012 Tata Consultancy Services Limited
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