Putting the customer first


3 May 2011


The onus is on banks to embrace a business model that places the quality of customer experience at its heart. That means having a consistent service across all channels that responds to the needs of individuals. Michelle McEttrick of Barclays tells Jim Banks why customer relationship management is at the heart of online, mobile and telephone banking, and is driving a radical rethink of branch networks.


The traditional approach to banking - which centred on creating products that suited a bank's approach to taking risks with the capital entrusted to it and then pushing these products to a hopefully receptive clientele - has been changing for the last decade. That process of change has accelerated since the credit crisis began in 2008, but was well underway as the banking community began to truly move into a multichannel environment.

As customers increasingly access banking services through a mix of channels, combining online and mobile banking with the more personal interactions over the telephone or in a branch, the financial services industry has had to focus on building a consistent customer experience across all of these channels, based on personalised services and the promotion of products that are suited to an individual's needs. In short, customer-centricity is now at the heart of the retail banking business model.

It is easy to talk about putting the customer first, but what counts is the tangible experience of engaging with a bank. So far, the industry has taken up the challenge, though it has not completed the transition to the new banking paradigm.

"You sense there is a will to change, but the industry struggles against the product-dominant focus that is at the heart of banks' social utility. The focus has been on finding the right formula for a product and then looking for people who would take it up. Now, we are bringing in approaches from other industries to inform how we are serving our customers, and we are looking at their needs and desires first," says Michelle McEttrick, chief marketing officer for global retail banking at Barclays.

Branching out

One of the most noticeable ways in which this message is changing how banks operate is in the redesign of branches. Whereas a bank branch would once have been a place entirely built around transactions, with walls of glass between the teller and the customer, new branches are appearing that have an entirely different look and feel.

State-of-the-art branches, like the flagship Barclays outlet in Piccadilly, have a more open and relaxed feel to attract and engage customers. There are areas for automated transactions, but more space is given over to areas where customers can meet and talk with informed experts who can help them find products that meet their specific needs. In some of the larger branches, there are even zones where premier customers can have private meetings - either with their banking advisors or with their own business contacts.
"We've done a lot of work shifting branches away from being transaction factories to being more open branches staffed with financial services experts. It is all about having conversations," says McEttrick.

These conversations, which increasingly underpin the customer experience, are to a large degree informed by the customer relationship management (CRM) system a bank has in place. It provides the data on each customer that defines the bank's understanding of his or her needs, and forms the foundation of the consistent experience across all channels. It enables a bank to react to individuals' needs rather than dictating what products will be sold.

"Our CRM system is focused on customers who come in through all channels. It helps us ensure our services are not about pushing but about responding, whether customers approach us by phone or in the branch. It is an ambition to be consistent across
all channels," McEttrick explains.

Service channels

The challenge for banks is firstly to ensure that all channels are available (see 'Why banks should act now on IPv6', above) and to deliver a responsive, personalised and seamless service across them all. Progress towards this goal has been admirable although much remains to be done.

"Customers want to be able to choose the channels through with they interact with their banks. That choice depends on the person. Some people are very tightly in control of their finances and spend hours online managing them, while others are reliant on the personal touch, so they use the phone or come into the branch. Some people want the human connection," says McEttrick.
"All channels must be available. They are complementary. We are continuing to push through the branch channel the philosophy of being a retail environment, and we also want to keep our mobile banking services up-to-date across the market," she adds.

The effort and investment that is required to make the transition from a product-centric to a customer-centric business model is not insignificant. That banks are making that investment is, in itself, an indicator of how important it is to implement the change. Customer-centricity is more than a buzzword. It is the fundamental concept that will define retail banking for decades to come.
It is to its credit that the industry has grasped that concept, even if there is still much work to be done to get consistent, personalised banking services across all channels. Meaningful steps have already been taken towards that ultimate goal.

"We are not doing this for frivolous reasons. Customer-centricity is the best route to success," believes McEttrick. "We have seen the evidence in other industries and that is why we are focused on getting this right."