Customer 360: Reinventing The Rules In Financial Services

Knowing the customer is pivotal for every industry, including finance. For several years, the objectives were limited to ensuring a client’s comprehensive and integrated relationship with the bank. In today’s world, this objective extends beyond the institution’s physical boundaries to better understand the individual and not just their transactional relationship with the bank. 

By having a 360-degree view, banks will have an improved understanding of what customers are doing with their money and their financial data, which the banks can use to serve them better. By having a clear cut picture of the customer’s information, they can analyse the data to help market the right product for each individual. Without the data, the best one can do is just guess. 

In a recently concluded roundtable organised by BW Businessworld with some of India’s top leaders associated with the finance sector, a wide range of topics were discussed, including the impact of the pandemic on the financial services industry, customer lifecycle management, utilising data insights, and the role of soft skills for new age bankers. 

The future of financial services to witness a paradigm shift:  

Abhai Singh, India Sales Head & Scaled Customer Business Lead – APAC at LinkedIn, suggested that the entire BFSI industry outlook in the country is looking exciting. 

He said, "This is because of the macro factors that are happening in the industry right now. India as an economy is growing and striving to become a 5 trillion dollar economy, and this sector will play a major role in propelling India to reach that stage. A lot of wealth will pour into the country, and different segments will pop up to keep the momentum going, especially the start-up ecosystem and the digital ecosystem, mostly because of the successful utilisation of data and mobile-first technology. "  

Singh highlighted that the banking industry is facing a wide range of challenges. He commented, "As per a 2018 Gartner survey, there is a high chance of 80 per cent of the heritage financial services facing shut down due to the disruptions taking place in the country. Also, another survey conducted by MicroStrategy shows that more than a third of bank customers buy a product from a competing bank. A significant proportion of customers polled said they want to change their banking relationships, but the bank made few attempts to do so." 

Singh suggested that succeeding in the present-day banking industry in India and globally by FY 2030 requires four clear themes: invisibility, connectivity, generating insights, and a sense of purpose.  

He explained, "One can share a lot of experiences with the clients without actually being in touch with them (being invisible), whether one sees the connections within their ecosystem as threats or as the big differentiator, generation of insights based on the data promptly, and having the sense of purpose of being environmentally and socially responsible in the modern-day workplace."       

The impact of the pandemic on re-shaping the financial services industry: 

P D Singh, Managing Director & Head of Corporate Banking at JP Morgan, suggested that a lot has changed in the financial services industry in the post-pandemic age. He said, "In the post-pandemic age, clients have a laser-sharp focus on efficiency. The new paradigm has resulted in cost-reduction, fail-safe processes, and a completely new model of doing business," 

Singh mentioned that the pandemic resulted in several challenges but, in turn, also gave rise to the digital. He gave an example to elaborate on his point. "Never before have we seen these massive systemic issues including import bans, tariff changes, and supply chain disruption came into effect. These shocks led to a decline in international trade followed by a very quick revival in 2021. Between all this, the digital awakening took place. Digital solutions came into existence, something which was paperless and provided financial solutions electronically. In the case of JP Morgan, the electronic supply chain finance and tie-ups were quickly put in place alongside fin-techs. As a result, we have the ability to offer the best cutting edge solutions to our clients, not only in India but as they expand their footprint overseas. These solutions have acted as a magnet in acquiring new customers. " 

Singh emphasised the importance of staying ahead of emerging risks in today's world. 

He pointed out, "Clients are continuously trying to adapt to the constantly changing situation. As a result, a partner who has risk management solutions and can understand the changing paradigm is extremely valuable and is a pull factor for attracting new clients to the ecosystem of the bank. Basically, unlocking value and industry-wide innovation is a key measure or reason for success in current times." 

Data can help provide tailor-made offers: 

Maneesh Ajmani, Head Preferred Banking, NRI, Investment Services & Bancassurance at RBL Bank, explained that traditionally, the challenge has been to successfully utilise the data sets available with banks to create insights. 

Ajmani said, "Traditionally, in the banking world, we have all been using core banking solutions. There are large data-sets available with banks, but the question has been or was till sometime back was how to analyse this data because the core-banking solution cannot help you navigate through this data and make much sense of it," 

Ajmani pointed out that there are two major reasons why new applications in today’s date are moving to the cloud. He pointed out, "In today’s date, one can test a new product on the cloud much faster and make changes at the same time. The analytical tools available today help analyse client insights and come up with real-time solutions. This is of very much relevance in the current age." 

Ajmani further elaborated on his point. He commented, "Actually, the data available internally in the bank, and the transactions that the client has done with the bank provide a huge wealth of information about the customer, including likes and dislikes, spending pattern etc. Especially with payments via UPI, the bank knows where the actual payment has been made, and the kind of restaurants the customers like spending. As a result, the bank can provide tailor-made offers and solutions to suit the customer’s needs." 

Ajmani highlighted that the other major challenge concerning data is that it is not only residing with the business intelligence team only. He said, "It is important that this data gets combined with insights from technology and marketing to automate personal experiences." 

The problem statement is to make a learned argument based on past interactions: 

Satheesh Krishnamurthy, EVP & Head - Private, Premium Banking & Third-Party Product at Axis Bank underlined, "When you have a large institution with customers across all segments it becomes important to build a segment-led strategy - ideally a segmentation of one. Every customer and every family is unique in their financial requirements." 

Krishnamurthy opined that the banks need to learn from other industries, including technology industries. 

He commented, "There is no better industry than the technology industry itself which can teach us how to successfully apply technology. Google makes billions of dollars in a year by marketing their ad-words. Netflix hooks their customers by their ability to design content based on the content which the user is watching, the same goes with the Twitter feed." 

"The cultural ethos of the institutions should be to have the humility to learn from the other industries and apply it," he added. 

Krishnamurthy suggested, "The problem-statement is to make a very learned case while speaking to customers based on the interactions in the past. When you have a multitude of data, and the industry is abuzz with multiple other improvisations, it is of key importance to apply it appropriately." 

He also added that the human aspect comes into consideration too. He said, "All of this data is of no good if the individual interacting with the customer is not trained and is unable to deliver the solution that the customer wants."    

Krishnamurthy highlighted that there is a cost-angle in applying the data correctly. He commented, "We can significantly reduce the expenses if we can apply the data available to provide optimal financial solutions ab-initio to achieve our target in one call instead of making three calls," 

Abhai Singh, India Sales Head & Scaled Customer Business Lead – APAC at LinkedIn explained the importance of Customer 360. Singh said, "The perspective was that if you want a banking relationship with somebody, you need to think about it from the time the person is born till the time the person passes away. At every given point in time, there will always be something or the other that the person needs to do with money,"  

 Singh commented that the same is true for institutions too. He explained, "Right from the time when institutions are formed till the time they start becoming profitable and start expanding, there will be operations which they will need to do alongside the banks." 

Singh opined, "By putting the customer at the centre and having a 360-degree view, a lot of banks have looked at CRM as a major source of collecting data and probably have a data lake on top of the unstructured and structured data where one can get more meaningful insights," 

 "If one does this right, and if you know your customer (KYC), the philosophy of KYC will be the differentiator for you to make a better banking relationship and be more relevant," he added. 

Importance of tools and soft skills for the new age bankers: 

Rahul Jain, President and Head, Personal Wealth at Edelweiss Wealth Management suggested that soft skills will play a major role for the new age bankers to become successful. 

Jain said, "From the soft skills point of view, being empathetic, proactive, and not just looking at the transactional value is going to be a core part of the whole relationship from a banking perspective. This is not something new though. It has existed for several years. Everyone has heard stories about how LIC agents used to operate and work very closely with their clients." 

He mentioned that these characteristics still exist and have become nuanced in the world. Jain commented, "Soft skills are a very aesthetic part of human relationships and how we do engagement with clients. In my sense, it is just going to keep evolving."  

Jain underlined that in today’s date the CRM tools are becoming more relevant. He said, "I think the whole gamut of CRM tools which RM requires needs to be more dynamic, based on real-time, more insightful, and make room for more relevant and meaningful conversations with the client, which is one of the most important aspects." 

The panellists concluded the discussion by stating that financial institutions should be focused on using the right technology and manpower in order to successfully cater to the customer’s requirements.