John Gachora (standing), the NIC Bank managing director, assists customers. FILE PHOTO | NMG
If ever there was a list of economic sectors that have been hit
hardest by rapid changes in consumer behaviour, banking would be at the
top.
This is because today’s banking customers expect not just good rates and secure services but also a positive experience.
The
good news is that most banks have made great progress towards becoming
more ‘customer-centric’ over the past few years. In part, this is
because many bank executives have taken a personal interest in getting
closer to their customers.
KPMG’s 2017 Global CEO
Outlook survey found that two-thirds of bank CEOs feel personally
responsible for representing the best interests of their customers,
while 65 per cent say they can confidently articulate the customer value
proposition.
At the same time, we have seen many of the large banks start to
invest significant capital and resources in improving the customer focus
of their organisations.
They are testing out new
technologies that promise to speed transactions and processes, taking
steps to align their middle- and back-office processes around the
customer and developing fintech strategies to improve the customer
experience.
Mitch Siegel, KPMG’s financial services
strategy and transformation leader in the US, notes that CEOs of top
banks recognise the urgency of providing good customer experiences.
This
is an important development especially in a world where customers
compare their banking experience against their ‘last best’ service
experience, be it in a supermarket or car garage.
Locally
and regionally, progress has certainly been made. Yet experience
suggests there is still much to do before East African bank CEOs can
consider themselves truly customer-centric.
In
Kenya, for instance, banks have moved to streamline their systems and
processes even as they try out new technologies to improve front- and
back-end operations.
Partnerships are also taking a
pivotal role in providing digital and customer centric strategies that
continue to deliver value to customers notes Sheel Gill, Head of
Financial Services at KPMG East Africa.
Local and regional banks need to break down their internal siloes to achieve a holistic ‘single view’ of their customers.
In
part, this will require them to change processes through adopting newer
technologies allowing them to share customer data across their chosen
service segments.
It will necessitate a cultural
change that incentivises focus on experience rather than pushing
products. Simultaneously, most banks will need to redouble their efforts
to improve their middle- and back-office processes to deliver the
expected front-office customer experiences.
This is
often referred to as the Customer Experience (CX) — how customers
interact with their banks — versus the User Experience (UX) — customers’
first impression of the bank’s products, services and channels.
This
will mean higher application of technologies, it will also require more
flexibility and agility in the way processes are designed and managed,
and greater alignment between the user interface and back-end
technologies.
While this may seem like a world where
technology has the upper hand, the reality is that traditional banks are
building from a very solid foundation.
Thanks to
their long history and decades of customer relationships, traditional
banks are able to draw on deep experience of managing customers across
their financial journeys.
Notwithstanding recent
declines in customer trust banks have a strong legacy of delivering
secure, smart and valuable services to their customers. Few customers
worry that their bank will fail or their money is insecure. Traditional
banks are also kings of process and compliance.
They
may not yet possess the agility of pure play digital banks, but they
certainly understand the need for rigour behind the processes and they
know how to manage regulations. Needless to say, the products and
services on offer will rapidly change.
The KPMG
report, Me, My Life, My Wallet, highlights customers are becoming
increasingly tired of managing multiple service providers to fulfil
their various financial requirements.
As new customers
emerge with different demographic characteristics, banks amongst other
industries have to change, customers are increasing looking for a
‘one-stop shop’ for all products and services irrespective of the
industry.
While many organisations are clearly making
great strides towards customer-centricity, KPMG’s view of the market
suggests that there is little time to waste.
Many of
the leading banks are expected to successfully transform into
customer-centric delivery models by 2020. Armed with their strong
heritage, deep experience and new technologies, early movers will be at a
significant advantage to capture market share.
Gill is head of financial services, KPMG East Africa. sheelgill1@kpmg.co.ke. Leahy is head of markets at KPMG East Africa. Davidleahy@kpmg.co.ke
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