Banking Newsletter: July 2018

As Celent analysts meet to discuss what we’re hearing from clients, one theme percolating for a couple of years has recently come to a boil: customer experience. Banks acknowledge its importance, and many new companies have been founded on the premise that their product will provide a better one. Many banks, however, continue to treat this as a technology issue first and foremost. During a recent webcast on improving relationships with customers that you’ve never met, one crucial CX point was crystallized for me as we chatted about developing digital relationships: the importance of empathy for bankers.

I don’t mean “understand your customers.” I mean truly put yourself in the customer’s shoes (probably using one of many possible journey maps), and think about ways to not just give them what they say they need, but to anticipate what will be helpful, offer it proactively, and use those moments to build a long-term relationship. Crucially, many times the optimal initiative may not be a sale — the next best offer — but a piece of advice, or a nudge, or some encouragement: the next best action.

I was asked for an example of this, and on the truly radical side, came up with this scenario. The bank notices that a long-time customer with a high predicted life-time value, a model citizen, has stopped receiving his biweekly paychecks. On investigation, the bank formulates its best guess that the man has stopped working, but is a responsible person and will be back on his feet relatively soon. Knowing this, the bank proactively reaches out (and how this is done will be critical!) to offer some mortgage forbearance for a period of time. If this is done right, the bank will have a customer for life. The alternative: wait for the mortgage to be late and then start sending stern letters. Doing this won’t be easy, but understanding the customer first, and then empathizing with him, will require a shift in bankers’ mindsets before any kind of technology can be developed to deliver the right customer experience.

On another note, we’ve been publishing some interesting and timely pieces lately. As banks begin to embrace their role as a participant in the ecosystem, the notion of open banking / platform banking / PaaS is taking on greater urgency. Alenka Grealish’s recent piece, Platform Banking in the US: Positioning to Be at the Center, addresses the challenges head on. Bob Meara discusses the findings of a 2,500-person US retail banking survey on customer attitudes toward engaging with their banks in Delivering Excellent Customer Service, Part 2: Why Digital Engagement Will No Longer Be Optional; the answers aren’t quite what you’d expect. And Joan McGowan describes the very practical use of AI in AI Made to Reduce False Positives, Part 1: Detection Capabilities and Use Cases. Who knew that there were so many different approaches to using different versions of AI to take on the perennial fraud problem of false positives?

I hope you have a relaxing and enjoyable summer.

All my best,

Dan Latimore
Senior Vice President
@DanLatimore