Bank CRM In A Digital World

Since the beginning of banking, human workforces have been the face of banks. To ensure that services and deliveries are on time, banks started to invest heavily in CRM systems making it the heart of their customer experience. However, today more and more customers are using digital channels, which have limited or no human interactions. By 2012, banking saw the tipping point, where more than 50 per cent of interactions were being serviced through non-human channels. Ironically, the “alternative channels” as they were called, became the primary channel. Then came the mad rush of digitisation, when banks poured in billions to create next generation banks, the jury on which is still out.

At the core of this shift is the fact that ‘products’ are no longer differentiators for banks, but ‘customer experience’  is. That is the reason why banking CRMs are now responding to platforms that can enable this shift. However, banks must overcome these five key challenges:

1.Digitisation is challenging the way banks operate:  
CRMs must evolve to move from “ticket logging” workflows to a more “one and done” interaction mindset.  Customers today expect results, instant solutions to their problems. More importantly, they want to serve themselves on any device, at any time and only switch to a “slow”, assisted channel, if they can’t figure out what they need. Hence, there is a need for a fundamental rethink on how operations and workflows must change.

2. The back office kills the customer experience:
As banks grew in size, they created a centralised back office to instill control and reduce transaction cost. This resulted in penalty of time. Banks must reimagine their process with a “no back office” model. More and more back office functions are now being brought to the front office, using intelligent digital application platforms that move these decisions to machines. These new-age digital CRMs come embedded with powerful “robotic automation” platforms that speed up automation and minimise people touch on such transactions. Today, if a bank is still in the process of scaling its back office, then it has almost lost its way.

3. Who owns the customer experience?
Since customer experience is the only currency for customer equity for a bank, serious thinking towards establishing a strong governance model is needed. Many benefits come through, when multiple departments and channels work together to reimagine the processes. This also facilitates the ability to fight strong silos and push stakeholders out of their comfort zones. Digital CRMs, hence must provide banks with the ability to create change, ready customer journeys and help enforce strong governance structures.

4. Goodbye IVR:  
By 2020, we firmly will be on the path to a voice-first society. Technology improvements in voice and AI (artificial intelligence) will fundamentally alter processes, almost similar to the mobile revolution in the 2010 era. We are already watching how digital CRMs working with a host of providers, like Amazon Connect, are replacing call centres using voice interaction bots and are reducing the number of agents required.

Today, almost replacing 40 per cent of voice assisted agent functions can be done independently with platforms like LEX, if backed by the right process. Yet, these are only early days and the beginning of the transformation.
 
5. Out-of-body banking: 
Currently, less  than one per cent of banking transactions are happening out of the platforms controlled by the banks (think Internet banking, mobile banking, cards). As the world of IOT’s explode, we are spoilt for choices, be it Amazon (Alexa), Google (Home), Apple or Microsoft. Technology enablers are already building or selling standalone “digital assistant” devices.

We believe most of the transactions will move away from banking channels to these platforms, be it money transfers, bill pay, service request, etc.  Banks must start thinking of ways to link their digital CRMs to these platforms and become omnipresent. This is a completely new technology and security paradigm for banking. Assistants will force banks to rethink the balance of security, convenience and compliance like never before.

Banking is undergoing a transformation so fundamental that it is challenging the very model of banking. Years ago, a wise man said, “banking is necessary, banks are not”.

We believe, the current disruption felt by banks have been very tepid. We do believe that over the next five years, banks will see more disruption per year than in the decade that went by.

It is important to ensure that banks start working on its culture to embrace digital more deeply. They must rethink their CRM strategy and embrace digital CRM platforms. In the next decade, response and speed of change will be the only real competitive driver, defined by algorithms that will capture the essence of a “bank’s brand”.

So, be it underwriting, cross-selling, acquisition quality, etc. will all be digitally managed, based on unique IP built by banks. While retail banking must lead this charge, corporate banking must be a close second.  The only constant for the next decade is change, so be prepared.