Banks have held many headlines in the news over the last few years, with consumer trust of the industry waning with every new article. By taking a data-driven and analytical approach to understanding customers' needs banks can drive revenue growth by serving their customers better – increasing revenues as well improving customer satisfaction.

The current financial environment, characterised by low interest rates and on-going regulatory pressure, is squeezing banks' traditional revenue sources, causing once attractive relationships to generate less profit. Furthermore, changes in the wider market are causing the profile of customers to change, meaning banks' traditional sales approaches are not specific or dynamic enough to recognise customers' shifting needs. As a result banks are faced with a huge challenge when attempting to drive growth in the current market, whilst making sure customer needs are met.

This changing landscape poses banks with the following challenges:

  • Identifying areas of potential revenue is much harder in this stagnant market.
  • Generating growth through acquiring new customers is costly and resource intensive in this highly competitive and commoditised industry.
  • Changing regulatory and customer demands require a more responsive and governed approach to meet strategic business goals based on customer needs.
  • Generating the best results from sales teams within a reasonable operating cost continues to be a challenge when the market is slow.

As a starting point to addressing these challenges, banks need to utilise the wealth of public and customer data they hold. There is a huge amount of insight they can unlock and capitalise on by analysing the data appropriately. If banks were to combine this analysis with a review of their current sales process and sales teams, they could create a needs-based sales system that produces target product recommendations for each customer.

Banks that are truly committed to driving growth from within their organisation need to base their approach on three key pillars:

  • Business strategy: have a clear understanding of their current business performance and their future strategies in order to identify areas of strength and opportunities for improvement.
  • Current state review: review their current sales system so as to re-orientate it to a needs-based approach, along with realigning the organisational and motivational structure of their sales teams.
  • Data: identify key data sources as well as external ones to build a single customer view of 'master variables' to create one accurate record of each of their customers.

These three pillars then need to be combined with key operational drivers from within the bank so that once key customer needs have been identified, changes to business strategy and operations can be implemented.

  • Technology: developing a data infrastructure and single customer view to enable a model to drive recommendations.
  • Analytics: using customer characteristics and metrics to create segments of customers with similar profiles and needs. These segments then need to be further segmented on business maturity and relationship with the bank to create targeted product recommendations.
  • Sales system: using the findings from the review of the sales system to develop the optimised target state for people, process, products and motivation.
  • Change management: combining a stakeholder assessment, conversion plans and a champion's network and training materials to embed the new ways of working within the business.

If the above guidelines are followed, banks can hope to achieve the following:

  • A simplified view of their customers within the same segment and a needs assessment of each, allowing the bank to identify with their persona.
  • A redesigned sales process that includes new sales processes for areas requiring improvement as well as a proposed sales team structure. Supporting training material will be critical to ensure successful buy-in from the business.
  • A front-end 'customer tool' displaying needs based product recommendations designed to allow sales staff to have meaningful conversations based on the needs of the customer matching the products and services of the bank.

By taking a data-driven and analytical approach to understanding customer needs banks can drive revenue growth by serving their customers better – increasing revenues as well improving customer satisfaction.

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