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How Banks Can Enhance Online Customer Relationships

How Banks Can Enhance Online Customer Relationships

Attract and Retain your Customers Online

Category: Internet

Date: , 10:00

Company: Actuate

Banks have traditionally organised their customer service efforts by product or channel, which places the burden of navigating the bank’s various organisations on their customers, leaving them confused and frustrated. As more institutions move to simplify and integrate their channel services using online customer portals, banks must make organisational and technological changes to attract and retain their customers.

Rich Internet Applications Without LimitsTMBanks have traditionally organized their customer service efforts by product or channel, which places the burden of navigating the bank s various organizations on their customers, leaving them confused and frustrated. As more institutions move to simplify and integrate their channel services using online customer portals, banks must make organizational and technological changes to attract and retain their customers.Business White PaperHow Banks Can Enhance Online Customer RelationshipsUntitled Document2Business White Paper: How Banks Can Enhance Online Customer RelationshipsUsing Online Services to Personalize BankingIn an increasingly competitive and commoditized fnancial world, banks find themselves at a crossroads. At many banks, the real needs of customers have taken a back seat to the dictates of the bank s customer-relationship strategies. Those banks have assumed that they and not their customers are in charge of their relationships. Banks that have the courage to rein in their customer relationship strategies and to focus instead on customizing their products and services to meet the personal needs of their customers will win their loyalty and continued business. By empowering their customers in this way, banks empower themselves.Banking Customers Are ChangingTraditional customer strategies are failing in the new financial services world because the market has evolved. In the past, banks could depend on traditional branch banking to attract customers and get them to consume products and services over and over again.However, the habits and needs of banking customers have changed. Today s consumers are more mobile and demand access to their accounts almost anytime and anywhere. They visit branches far less often and are comfortable using technology to access a variety of financial services from a wide range of banking and non-banking providers. And they use the Internet to obtain and compare information about those providers via social networks, such as blogs and comparison engines.Today s banking customers relocate often seasonally, temporarily and permanently and expect to continue their banking relationships. Young adults move a variety of distances to pursue higher education. Workers of all ages and income levels relocate for career opportunities. Families spend weekends and summers at second homes. Retirees split time between their homes in warm and cool climates. And all of these customers expect continuity, consistency and quality in interactions with their banks.By understanding and embracing these new customer requirements, a bank can learn which distribution networks its customers use to locate products, compare them and make purchases. Those networks should become the banks new distribution channels and partners.New Competition Drives InnovationWith deregulation of the financial services industry, banks see competition from all directions. Brokerage houses, insurance companies and other financial services institutions offer investment and money-management alternatives to traditional banking services. Even large retail and grocery chains are entering the market by offering their customers fnancial products some with banking partners and some home-grown services that combine convenience with rewards programs. Often, these new providers can offer traditional products that give customers better rates and easy access to their accounts. Online service competitors are making it easier for customers to abandon their bank for better deals. They can visit websites to compare features and rates among providers products before they select one. Social networking provides firsthand access to customers opinions and experiences in dealing with fnancial service providers. And personal financial portals include cross-vendor account aggregation and personal financial management services that individual financial institutions do not offer.Making Customers the Center of Banking RelationshipsTraditionally, banks have been the center of the fnancial services world, and banks have been organized by delivery channels branches, ATMs, online banking, service center, etc. each with its own mission and products. This approach has created product and service silos inside banks that can t communicate about how customers behave and what they want.Untitled Document3Business White Paper: How Banks Can Enhance Online Customer RelationshipsSilos also make it difficult for customers to get simple assistance from their banks and require them to maintain lists of several touch points. Only the wealthiest of customers are assigned personal bankers who are responsible for navigating the disjoint, discrete silo organizations within the bank to solve customer problems. This practice makes life easier for a few select customers, but the rigid structure and increased service requirements impact profits and ability of the bank to act quickly to meet customer needs.A customer-focused bank removes itself from the center of the customer relationship. Instead of focusing on channels and products, the bank offers products that compete on price and service, regardless of channel or distribution network. Using this approach, banks attract and retain all types of customers more effectively and serve those who want a variety of relationships with the bank.Using Technology to Personalize BankingCustomer-focused banks apply technology not just to support their internal strategies, but more importantly to address customer requirements. Regardless of the channel they use, banking customers want to:" Manage money, project cash flow and cut expenses" Pay bills and view payment histories" View balances and aggregate their net worth" Save and invest money" Plan for major expendituresTo support all these activities, online banking services must integrate customer accounts and banking products into a seamless user experience that is personalized and straightforward. Such integration must span product silos and transcend political boundaries in banks.Creating such a user experience requires banks to use multichannel integration technologies, centralized customer preferences management, product configuration and pricing tools, and Web 2.0 technologies. As banks apply these technologies, they must remember that they must streamline and automate processes that solve customer needs, and not the needs of bank employees and systems which maintains the banks ability to remain customer-focused. Loose, intangible project goals to improve customer service are not enough; objectives must be specific and include measurable benefits.At all times, it is imperative to evaluate how existing and new technologies support processes and not channels and to remember that processes support customers and not back-office banking systems.Focusing on Customers Requires Multichannel IntegrationTo become customer-focused, banks must integrate information from various banking channels. To accomplish multichannel integration, institutions must create customer portals that:" Integrate information from a variety of systems and sources from across the bank" Deliver online products and services to customers via a simple, zero-training user experience" Support data and workflow from the front to the back office " Support existing touch points and products" Use modern, Web 2.0 technologies that improve the portal functionality and brand image" Are extensible so they can include new channels, products and systems as they become availableBy pursuing a multichannel integration strategy, banks can support existing customer touch points and extend products and services to new touch points. Multichannel integration is more complex than traditional channel integration, which supports only on the needs of a single channel, such as automating front-to-back-office processes in online banking. The multichannel approach requires banks to maintain a customer focus by streamlining customer processes and needs. This often requires the development of new systems architected to span channel silos rather than augmenting old systems that created the silos in the first place.Untitled Document4Business White Paper: How Banks Can Enhance Online Customer RelationshipsMoving to a multichannel approach requires banks to make a strong commitment to customer service and to acquiring the resources to build an architecture based on business process management (BPM) and service-oriented architecture (SOA). This approach often requires software tools and technologies from different vendors and service providers. Many banks have already started BPM and SOA initiatives that provide a strong launching platform for their multichannel integration efforts. Once those efforts are in place, a bank spends less time and money to support new touch points and penetrate existing touch points more thoroughly.Using BPM and SOA to Link to Back-Office ServicesCustomer portals must deliver an online experience that gives users the ability to interact with the bank on their terms. But the portal must also seamlessly link the portal interface to the back-office systems of the bank and most institutions use a combination of BPM and SOA to create that infrastructure. Doing so benefits both business and IT organizations in the bank. It not only makes it easier to integrate new products, services and channels, the combined BPM/SOA approach also makes legacy applications transparent to users while separating services and processes from presentation and data layers.BPM and SOA also support business processes in applications such as fraud detection and ATM monitoring that standard SOA approaches do not handle well. Component- and event-based communications are also needed to enable independent silo applications to communicate asynchronously in the form of documents or messages. While considerable work is required to design and develop the BPM interfaces required by multichannel online services, they have far-reaching, significant benefits both to users and IT. Customers and internal users gain easy access to the information they need. At the same time, IT organizations get a new, SOA-based multichannel solution that is far easier to extend and maintain.Centralizing Customer Preferences and RecordsThe traditional, silo-based approach to supporting banking channels almost always means that the channels manage customer preferences independently. Sometimes, one channel allows users to customize certain preferences such as receiving new-offer emails while other channels do not. Other times, channels manage preferences inconsistently, such as allowing users to opt out of new offers, but not regular printed communications.To overcome this disjointed silo-based approach, banks must create centralized customer profiles that contain customers preferences for where and how they want to receive alerts, statements, new loan information or other offers. The bank must then deliver on these promises and have governance in place so that all bank communications and activities obey the customer s stated preferences.Centralized customer preference engines must:" Share preferences so they are available across channels and products" Reduce or eliminate confusion and conflicts by organizing preferences and rules around customer processes" Let customers personalize preferences so they can control how they do business with the bankPersonalizing Online Customer InteractionsIn the new financial world, instead of dictating how customers engage their bank, the institution must help customers choose products and services inside or outside the bank that meet their personal fnancial requirements. While this makes it impossible to predict the type of relationship that each customer wants, banks can perform behavioral analysis to better understand customer preferences.Untitled DocumentActuate Corporation2207 Bridgepointe Parkway Suite 500San Mateo, CA 94404Tel: (888) 422-8828Web: http://www.actuate.com5Business White Paper: How Banks Can Enhance Online Customer RelationshipsTo win the confidence and loyalty of customers, banks can give them tools that allow them to personalize their experience, analyze services and change products as they require. By providing tools that allow customers to perform their own analysis using their own criteria and data banks project a progressive, professional and personal approach to helping customers achieve their financial goals.Banks should use Web 2.0 technologies to create an interactive, personalized customer experience that is real-time and dynamic. To make things even easier, the tools should include automated, seamless ways for customers to move from analysis to action such as increasing a monthly loan or credit card payment for earlier payoff, or identifying a bank product with lower rates. Moving to Multichannel Online SolutionsSo what must banks do to make the move from silo-based customer service to online, multichannel service? Here are some tips from leading industry analysts for making the transition successfully.Immediate InitiativesBecome more aware of changes in the market and customer relationship preferences" Identify all traditional and new competitors and create a plan to monitor them" Identify gaps in the bank s support for customer relationships, including those with non-bank competitors" Identify ways that your website can help customers communicate their banking relationship preferencesShort-Term InitiativesShift from being product- and channel-focused to being customer-focused" Energize multichannel integration efforts to focus on customers, not products" Adopt a multichannel integration strategy that makes bank channels invisible to customers." Find ways to personalize customers online experience and empower them to do more" Answer customers questions and solve their problems better" Acquire technologies required to enable customers to access account data and perform transactions at the time and place of their choiceLong-Term InitiativesBecome a truly customer-focused institution with a multichannel culture and multichannel systems" Provide self-service and personalized services that enable customers to analyze their account data and transact business with the bank" Provide incentives to bank employees to service customer needs by providing them cross-channel solutions" Maximize the use of technologies and partnerships that empower customers across all banking channelsStart Enhancing Customer Relationships TodayFor more details on how you can use Actuate to realize the benefits that Business Process Management and Service Oriented Architecture can help your bank become customer-focused and transform your online service initiatives, contact Actuate today.Email:

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