Taking customer management into the board room

Championing the customer cause with a chief customer officer:
Sanat Rao, Associate Vice President & Global Head–Finacle Sales, Infosys Technologies Limited

There is no doubt that in most banks today there is indeed a strong realization that customer management is of prime importance and it is this realization that has placed customer management at the core of other strategies being devised by banks. Today, in many banks it would seem that while the end goal of customer centricity is much clearer, the quest of how to get there is still an enormous challenge. I have often wondered how banks could call themselves customer centric at a time when, in many banks, product processing systems operate largely in silos; when different channels are owned by individual, often disconnected, teams within the bank; and when the customer relationship manager is but a messenger between the customer and the myriad processing centres at the back office.

Customer centricity is not just about wanting to strengthen relationships with customers. It is not just about having a customer strategy which unequivocally states that customers are a bank’s most important asset. While banks have demonstrably taken huge strides in being more customer friendly than they have been in the past, it is imperative that a quantum leap is required to make the strategic shift to customer centricity.

To start with, it is important that everyone in the bank realises that each fragment of information about the customer is recorded, analysed, understood and then re-used to not only develop meaningful responses but also address the needs of that particular customer. With increasing levels of sophistication, the new age customer is just not inclined to be patient in dealing with multiple levels of disconnected interactions with her bank. Towards this end, it could be worthwhile for banks to consider the requirement of someone specifically responsible for customer information and related customer experiences.

Another important aspect relates to customer strategy. Customer strategy cannot be an all-encompassing approach to deal with millions of customers in a broad sweep. The need of the hour is to cut out the noise of generic attempts and cater to the needs of the individual customer. A significant step towards this would be to segment customers; not just segmentation by age, location, lifestyle, or size of portfolio, but a complex mix of these characteristics developed through insight from the customer herself. Going further, it is important that customer strategy take cognizance of the fact that each customer is unique and therefore the bank will have to necessarily tailor its product and service offerings to suit each customer. This means that there needs to be a difference, however minute and subtle, in the way banks tailor their offerings, communicate with each customer and outline a value proposition which is clearly needs-based for that particular customer.

Finally, to the most important of all questions, who actually owns the entire gamut of customer-centricity and customer strategy? In this context, we are not talking about sole ownership with any single individual. Rather, the question is whether someone needs to have cross-functional responsibility, one which is obviously not limited by line of business, or channel of distribution or any other delineation within the bank. It cannot be the owner of a particular delivery channel, say the call center, because that individual will, in all likelihood, be concerned only with his own channel of responsibility. It cannot be the owner / product manager of some asset or liability products offered by the bank either, as that individual will have little visibility of factors beyond his own area of responsibility. It cannot be the branch manager or the relationship manager as they will advocate for only their customers and not those of the entire bank.

The need and therefore the challenge is for someone in the organization to take charge of the customer cause; someone who can cut across hierarchies, product silos, multiple channels and touch points, yet take a holistic view of all customers. The sole responsibility of this individual would be to create a ‘true’ 360 degree view of all customer relationships and then, on a need basis, create product and service offerings with a distinctive value proposition for each customer. This role would clearly encompass all aspects of customer relationships- be it customer retention, customer communication, customer satisfaction or customer profitability. This individual will recognize the role that technology has to play in all of this, but also fully understand that technology in itself is not the be-all and end-all of customer-centricity; that there is an equally important aspect pertaining to creating and constantly reinforcing a strong and powerful culture of customer-orientation, and of processes which are meaningful.

Obviously, such a role, if created, will be supremely powerful in all matters pertaining directly or indirectly to customers and is likely to cross paths with others in the organization that also have strong customer facing responsibility. However, the difference is that this role will cut across hierarchies, silos and lines of business. Therein lies both the complexity and the challenge.

At a time when operations, marketing, technology, information and other functions are headed by CXOs, we should ask ourselves whether or not the time has indeed come for banks to vest all customer-related responsibility in a Chief Customer Officer (CCO). The customer is at the heart of all our strategies, pertaining to sales, marketing, technology, operations, information, products, channels and so on. Should the customer therefore not have adequate representation at the executive management level in a bank, where one individual is made accountable for customer management and all related issues?

The individual needs to be someone who personally believes in strongly espousing customer advocacy, an evangelist for all matters related to customer interest. Clearly this role needs to be sufficiently empowered to drive the strategy. And most importantly, both the individual and the role strongly need executive approval. In other words, the CCO needs to be in the CEO’s ‘inner circle’. With that, banks would have succeeded in taking customer management and related issues straight into the board room. That by itself would be a big step forward, wouldn’t it?

Sanat Rao
Associate Vice President & Global Head – Finacle Sales
Infosys Technologies Limited

Sanat Rao spearheads the global sales initiatives of Finacle. He has 14 years of rich experience in Banking and Information Technology. Before taking over his current role, Sanat headed the product strategy and management group at Finacle, where he engaged closely with banks globally in the areas of core banking systems, CRM and internet banking.

Before joining Infosys in 2000, Sanat had a brief stint with i-flex solutions limited in their data warehousing unit. Prior to that, he was with ANZ Grindlays Bank for 9 years where he acquired a wealth of experience in consumer banking, including Branch Management, Operations, Marketing, and Consumer Lending. He was also associated with ANZ Bank, Melbourne on a global technology engagement.

Sanat is an alumnus of Indian Institute of Management, Bangalore.