The new wave of customer centricity on the front-line

Customer centricity has been and will be a key point in the retail banking industry. Banks have also learned that customer centricity is much more than implementing a CRM system: it has to be implemented through the entire organization. What is the role of the technology in this transition? How can information technology support a customer-oriented approach on the front-line?

Business driver - gaining new customers

If a bank wants to increase its market share in a saturated market, it has to attract customers from competitors. Innovative, targeted products and service excellence is a must in this effort where customer analysis and segmentation help to design the proper products and processes. Centrally planned and controlled (direct) marketing campaigns can be carried out centrally or locally in the branches. Those hesitating future clients who get custom-tailored product offering and efficient advisory would be more likely to choose that bank.

The agent network is also gaining on its importance: agents can provide the customers with a personal advisory and customers put faith in agents who are considered to be an independent financial advisor not a 'pushy' sales person. Thus, it is crucial for banks to attract professional agents, and one of the major differentiators is offering excellent services for them.

Business drivers - increasing the value of the existing customer base

One result of the increasing competition is that the utilization of the existing customer base is much more cost effective than the acquisition of new ones. "Only" complementary or higher value products ought to be sold to the well-known customers. Since defending the customer base and keeping them active is vital in matured markets, several methods should be implemented to increase the customer loyalty:

• Service excellence and easy-to-use self-service channels help to improve customer loyalty;
• Differentiated service levels can be implemented depending on the value of the customer;
• Customers who are likely to leave the bank can lure back with special retention offers;
• Personalized financial product offer and advisory help the bank to understand and meet the customers' needs better

Major IT key success factors on the front-line

In order to achieve the aims above, a customer centric approach has to be implemented through the entire organization from the product development to the data analysis. However, customer service and proactive sales are key elements and this area can be provided with powerful IT support.

All factors have their IT and business aspects and one cannot be successful without the other.

Unified front-end workplace

Today, banks usually have a three-digit number of financial products that can be processed in several systems. With the help of an ergonomic and easy-to-use front-end the officer's time can be released from the service to the sales activity. Product information and an integrated customer view are crucial to understand and serve the client's financial needs.

Since all transactions are entered in the same application, the performance of each customer advisor can be easily monitored.

Channel integration and management

A multichannel approach where the customer can change the banking channel during a business process is a must. As a next step, a consistent channel strategy should be implemented where each channel has got its importance and role in the bank's strategy. Bank should define if a particular channel has got sales or service focus, and the functionality of the IT systems should be designed according to the role of the channel.

Sales force automation

In the branch or in the call centre the extent of sales activity depends on the skills of the advisor, which can be improved by trainings; however, it still remains uncontrolled and incidental. In order to make sales processes more controlled IT based sales tools can be implemented in the front-line. These tools help the advisor in customer profiling, product reasoning and objection handling. Automated cross-sell offers can also be given to the clients by these means. These sales tools should be embedded in the customer servicing processes.

Process management

Bank wide process management should be implemented to speed up and automate procedures. The central workflow management makes all the processes transparent, however helps to detect bottlenecks. Process configuration ensures that customer service processes are controlled and orchestrated by the relevant customer indicators (e.g. customer value).

Operative CRM

Several marketing campaigns and active sales efforts are carried out throughout branches and call centers. Customer service also must be converted into effective sales activities. The operative CRM system provides support to plan, execute and control these sales efforts.

When the customer is identified in the branch or in the call centre, all interactions with him and all pending issues should be shown to the officer: campaigns where the customer is a target, complaints, channel interactions. Therefore issue tracking is also a number one key point of the customer centricity, where no customer interaction (enquiry, complaint, etc) can be lost or remain without follow-up.

Financial product management

Financial products are usually designed centrally by product development or marketing in the bank. Aligned with this approach the implementation of the financial products should also happen centrally in one system, and all the product information should be spread from this application to other IT systems: to the customer advisors. Financial products should be implemented by parameterization, so central application contains not only the financial but the marketing data (product description, product campaigns, product bundles etc.) as well.

Performance management

Despite of powerful IT support, 'human factor' still remains a key in sales activities. In order to motivate and control the sales activities, targets should be set to the customer advisor and the fulfillment of the targets should be continuously monitored.

The ideal vision of a customer centric banking front-office implementation

How can the above-mentioned business goals and IT requirements be supported by IT solutions? Is there a standard product approach for this purpose, or is custom development the way to meet these challenges?

Perfect fit into any kind of IT environment

Figure 1. IND Banking Front-Office (IND BFO)

The ideal integration or multichannel platform can be connected to any back-end systems, middleware or to the Enterprise Service Bus to access all core functionality and data necessary in the front-office activities. The platform should be able to deliver all the integrated business services onto any single or all delivery channels

This requires an open architecture, with loads of industry standard communication capabilities embedded aside from the centralized management and user interfaces allowing for all possible delivery channels to be implemented.

Perfect fit into any way of processing
Also, the processes designed in the best way are changing frequently, because of the continuous efficiency optimization need and the changes in the market environment. Processes are driven, managed and monitored by a centralized workflow engine, which implements the pre-designed workflow models. In the banking industry, the original specimen of hard copied or electronically signed documents should be available during the customer processes. The process efficiency can grow if the hard copies appear only once or not at all during the operation and in the rest of the process only electronic copies to be used.

This requires electronic document management and generation capabilities of the front-office platform.

Perfect fit for any kind of financial products
In sales, product application or transacting processes several (if not all) financial products are managed. There are hundreds of products with hundreds of parameters which are different in almost every country and every bank. Due to these enormous numbers, there should be different parameter views defined and available for the different end users, specialized for the delivery channel and the final service processes. The parameters are showing up on different user screens relying on dynamically built data structures.

This feature requires centralized product configuration, dynamic data modeling capabilities and dynamic generation of the customized user screens - based on these parameters.

Perfect fit into any kind of service delivery channels
Involving more and more customer service channels in optimized way, having all relevant services available everywhere and with the same business logic behind, will result in more banking activity, increase customer satisfaction and in the end - loyalty. Enabling transparent business services through all delivery channels requires having a centralized channel management solution in place. Channel independent business services, specific segments of sales or transacting processes should handle data from the same source of information, but content and presentation logic should optimized and depend on the channel it is delivered through.

Implementing industry standard best practices, like sales tools, algorithms and business logics of the front-line services on a fully tailor made way.

Industry standards or the most commonly used and well performing practices are always changing and improving. Implementing them as they are at a certain point of time will result in it shortly lagging behind the 'state-of-the-art'. Therefore, during the implementation the flexibility of these business logics should be taken strongly into consideration. IT product approach can hand this problem over to the software vendor whose primary duty is to keep its 'best practice' solutions up-to-date and deliver them as maintenance service to the clients' sites. The same customization tools, which were used during implementation on workflow, screens and data level, can assure flexibility.

From Vision to Product: IND Banking Front-Office

IND Banking Front-Office (see Figure 1.) is a highly customizable product approach that is aimed to get as close to these ideal objectives as possible by providing banking services that enable banks to build a comprehensive front-office system.

The two central features of IND BFO are the built-in "best practice" business logics and a multi-channel integration platform. IND BFO Business Components (IND BFO-BC) are predefined set of banking services, supporting complete banking business processes.

By selecting predefined IND BFO Business Components and delivery channels, and with the help of the efficient customization tools on workflow, screen and data level, banks can set up their unique, sales oriented customer interaction processes.

Beyond the IT implementation: how to successfully run a customer centric business

Analytical information must be managed, centralized and available
Bankers must be aware of the key indicators target segments, besides they should know the success criteria and profit factors the offered financial products possess. All these crucial information provided to the front-line should be simply to understand in order to effectively use during sales and in sales argumentations.

Therefore, the dedicated business competency centre continuously collects and analyzes the data from the DWH (data warehouse) to provide the up-to-date analytical results in a usable and simplified form directly to the front-line.

Front-office processes for sales, product application and issuing or transacting must have dedicated owners

The capability to improve efficiency without embedded learning curve is useless; it cannot serve the final objective. Owning a process means that an assigned key person is aware of all circumstances where different process statuses are born, knows the bottlenecks, measures the effectiveness, the KPI-s, and is continuously driving to improve in these factors. This also means that process players get support and advice from an authorized and well-trained person.

The process ownership can be defined together with the processes themselves, but measuring and managing these processes must be a daily recurring job which is best to be done by dedicated stuff within the organization.

Besides the IT department, the whole product and process designer organization should think in SOA way, i.e. in business services.

The need for SOA governance
The SOA (Service Oriented Architecture) concept is introduced to narrow the gap between business service categories and the IT services available at the end. Building front-office infrastructure on SOA is a must to reach optimal management and future development efficiency in the IT solutions for front-line activities. Therefore SOA services should reflect the real business activities and must be understood and managed by the business units of a bank.

Financial products should rely on the service assets available, and if there is no relevant service, the new design should be made by thinking through the future reusability as to the robustness of the services necessary to implement. The development and maintenance process runs through different organizations, through different levels and ways of understanding, therefore, a practical governance method and a governing organization should be showed up.

Financial product managers should design the offerings in a multichannel way
When the bank builds a real multichannel platform, which means it is possible to deliver the same business services, the specific parts of the same processes onto any sensible delivery channel, then it is a real benefit that should be capitalize. Taking this advantage can be realized through well-designed processes of selling and maintaining financial products. E.g. if a product can be applied for via the internet, but can be issued only after a face-to-face visit in one of the branches, then the application process should follow this route and all information gathered in various channels must be accessible and involved in each and every stage. Besides, every sales step should be done on the right, the most efficient and cost-effective channel. This is the question of product and process design.

Front-office advisors, agents and tellers must be motivated and the motivating capabilities should be available for them as a squarely designed process
It is never easy to change ones behaviour, attitude or at least the good old practice. When there is a new way of customer servicing or new requirements for the customer service time, it is hard to push it through the front-line officers. Efficient motivation is a tool for it. But motivation is efficient only when the ideas behind are clear for every player in the process, and when they can follow their personal performance quasi real-time.

A unique front-end is also a tool to implement motivation capabilities by combining sales performance indicators with transacting performance, or service time indicators.

Easy education, good usability and ergonomic user interface is a must to handle the constantly changing processes efficiently
The front-office means a large - and in a successful business environment - growing number of users: advisors, agents, operators, tellers, and the customers themselves. They have different levels of knowledge about financial products and processes. The friendly user interface, the ergonomic design should take into consideration these levels and these ways to introduce the proper layouts and presentation logics for these user groups.

This approach will make education and usage easier, and results in a better quality of service for the customer.

Conclusion

Becoming customer centric is a complex, continuously developing bunch of internal and external processes, attitude and company culture.

When designing IT solutions the analysis of the recent business is only the starting point: the decisive point between the successful and unsuccessful IT solutions is whether the applications are prepared for an effective operation and maintenance and whether they are easy to learn and adjustable to the changing business focuses.

Although the information technology can support the customer focus in the entire organization and can initiate or follow method changes required in the processes, it will not be successful without the necessary organizational improvement.

Contact:
Mr. Balazs Zentai
IND Group
Product Director
E: balazs.zentai@indgroup.eu
www.indgroup.eu

About IND Group

IND Group is a leading developer and provider of banking front-office products in the European e-finance market.

IND's flagship product, the IND Banking Front-Office (IND BFO), is a comprehensive range of solutions that empowers front-office operations. As IND BFO covers branch, internet, mobile and contact centre banking on the same platform, service quality and performance can significantly be improved.

The remarkable growth IND has made over the past years marks a true success story in the International financial IT market. We provide proficiency and state-of-the-art technology in more than 15 countries on three continents.

With a foundation of profitable growth since its inception in 1997, the Group is operating now from several European cities: London, Vienna, Stuttgart, Budapest, Miskolc, Barcelona and Jesi.

For more information about IND Group and its products please visit the website: www.indgroup.eu.