Rapidly evolving technology and changing customer expectations are forcing banks to rethink business models.
As customers become indifferent to brands and channel agnostic, opportunities for new entrants to make a real claim for market share present themselves. Digital-native competitors, customer-centric from inception, are moving in to challenge the banking status quo.
New industry players, born out of evolving technology and customer expectations, are shifting the banking ecosystems. In this setting banks digital transformation is imperative, with a changing environment necessitating a culture of innovation and customer-centricity.
Bank face growing pains as they develop an increasingly customer-centric model; Invisible silos that have inhibited innovation are devolved in favor of agile start-up like principles, banking cultures start to reflect the pace of change in technology, and subsequently customer expectations.
Despite growing pains, banks must evolve a with culture of customer-centricity at the heart of their digital transformation. The industry has historically been slow to change. But as the pace of change intensifies, with technology enabled competition threatening the status-quo, banks must create internal structures geared to be agile and open to innovation.
The winners will be those that effectively organise their operation around the customer; as opposed to channels or products. The advancement of digital channels is paralleled by the customers’ expectation of a seamless, and integrated omni-channel experience. But, paradoxically banks aren’t structured in a manner which reflects this.
The ability to develop a single customer view, offering relevancy and personalisation at every step of the journey, is the holy grail. To achieve this banks must create an organisational structure built with the customer front of mind. The development of customer-centric banking models, therefore, will be crucial in 2016.
A proponent of customer-centricity is Santander’s Head of Innovation, Ben Green. One Connected Community caught up with Ben to discuss banking innovation, culture and Kitti, a new account for groups being spun out of Santander.
Ben Green, Heads of Innovation, Santander has worked in financial services for the last 10-15 years, while running his own entrepreneurial businesses. This combination gives Ben an interesting and unique perspective that combines corporate and start-up cultures.
Most recently Ben has been launching kitti, a new business spun out of Santander’s innovation program, which supports groups of people with an account which works for them as a group rather than them as an individual.
Kitti at its heart is all about changing and opening up financial services capability from legacy systems where you have a counts for single people or joint accounts, to something much broader where there is a demand for groups of people increasingly socialising, living, traveling and ultimately buying things together, and where there’s friction that exists with traditional banking systems where you can’t get an account for a group.
What is your top tip for creating a customer-centric culture?
‘When it comes to digital and physical engagement the key is organisational structure. It’s not necessarily about customer focus or processes. For the last 10 years organisations have been building a digital competence and digital capability, and these teams haven’t traditionally interacted with teams operating the bricks and mortar side of the establishment. However, increasingly the consumer is operating directly between the digital and physical worlds and increasingly oscillating quickly between those two touch points. Structurally then organisations must merge their own house together so that they’re reflecting much more directly what the consumer is doing and what they want.’
What are your thoughts on where the physical and digital worlds meet?
‘Bringing together the physical and digital life of the customer is a fantastically important thing to get right. At the moment there isn’t much richness in dialogue between connected devices. Linking a smart phone to a home hub, for example, could easily provide a host of information based on what time it is, what day it is, browsing history etc. But, as things stand this is something of a missed opportunity, which increasingly we’ll see people taking advantage of. Smart devices, are identifiers of people and hold a lot of information e.g. bank details. They’re a device through which intelligence can be brought into the physical world, be it a home or a car. There are a whole host of environments in which the physical and the digital can give each other stimulus and feedback to improve the relevancy and richness of the experience that the customer is going to get. Retailers and service providers who identify this will immediately differentiate to a generation of early adopters and digitally engaged people who want to take advantage of that richness of experience.’
How are organisations responding to changing customer habits?
‘There’s no doubt there is a demand for consumers to get into the digitisation, and commoditisation of increasingly smart devices. Increasingly financial services are trying to bring this into the real world. However, there’s a clash where it’s harder and slower to respond – consumers are increasingly happy to spend more time and effort to build up their digital persona and increasingly happy to use digital to buy in shops. However, the retail footprint and format hasn’t really adapted to meet this demand. There has been an effort time and money to adapt the digital estate. But organisationally, large companies aren’t yet set up to bring digital competency into the physical world – This will be the next interesting moment in the evolution of large organisations as the physical and digital worlds come together, focused on the customer.’
How is Kitti successfully engaging customers on their own terms?
‘Kitti, from the start, was set out to sit alongside a very physical analogue tradition: The ‘kitti’, the jam jar or pint pot, in which groups collect a kitti. Kitti also comes which a physical card for a reason. By partnering the digital mobile app Kitti gives consumers something tangible to hang onto that can be used in shops. The Kitti team have been very cognizant of the fact that the Kitti app is moving from an analogue paradigm into the digital experience of that. The team don’t want consumers to lose any of the benefit or the psychology that comes from having physical kitti, the thing that we’re all used to.’
For more information, contact Jamie Harding on firstname.lastname@example.org |+44 (0)208 8193122