The capability to integrate two or more delivery channels through shared technology has only recently been deployed in any significant way. Today, a handful of retail banks can boast of globally integrated delivery channels that are built on standard technology principles. These channels can, for example, deliver consistent balances regardless of the customer's location because of the consistent architecture. No institution, however, can claim to have all channels working on a common platform or claim even to share information or process across all channels.
IT managers within the bank, as well as business managers that rely on the delivery channels to service their products, know deep down that integrating the channels is the right thing to do because some benefits of channel integration are intuitive if not scientifically provable. The example of inconsistent account balance information is one that integrated delivery channels can solve and that most bankers agree is a source of frustration for the customer. Quantifying the effects of fixing this problem proves to be tricky, however.
Service and sales processes made more predictable
Still, many banks have implemented, or are in the process of designing, integrated delivery channel architectures based on these soft benefits as well as on the goal of maintaining and deepening the customer relationship in the face of competitive pressures. The implementation of integrated delivery channels has to date focused on the service side of the relationship equation.
On the sales side, marketing and product line managers have benefited greatly from a relatively plentiful source of analytics systems in the market. Bankers are getting better at knowing how to calculate customer profitability, predict propensity to buy, and even recognize attrition behaviors thanks to the segmentation and focus of solution providers in the analytics markets.
Customer knowledge databases and analytics engines have made the selling process more predictable then ever before. But the actual use of the information from these systems has been limited to mail campaigns and outbound telemarketing, both of which traditionally have had low response rates. Although, these rates have improved somewhat with the improved customer knowledge in hand.
Thus, for banks, neither the chicken nor the egg came first. Both arrived at the same time. The opportunities to combine these powerful capabilities are built-in to the very systems that enable them individually. But the marriage of integrated delivery channels and customer knowledge is not a trivial arrangement. For once, perhaps, technology is not the problem.
Effective use of information builds key customer benefits
The issues surrounding the collaboration of knowledge and delivery have to do with the management of the data and processes involved as well as some very emotional aspects of the customer's relationship with the bank and the extent to which individual customers perceive the bank as a threat to their privacy. To build on the full strength of this collaboration, banks need to completely understand the issues surrounding the use of knowledge, and then tread lightly.
Data acquisition through customer interaction is determined by the delivery channels, themselves, or through some integrated channel management architecture. Institutions are already collecting most of the available information today such as customer identity, accounts, channels, transactions performed, time of day, and all the pieces of information that have some value to the institution. Such basic information is included in the transactions that are sent to the core banking system or to some external system such as a credit processor. For now, there seems to be no need to collect additional information that is not currently acquired. What is required is the use of the data in managing the relationship with the customer in a more fulfilling way.
The shift to the existing use of data comes in the form of the centralized acquisition (or processing) of this information outside of the transactional sense. Along with the use of transactional information by the systems that perform the basic units of work, specialized applications collect and analyze information about the customer interaction, itself, to give insight into customer behavior. Banks can also collect and store information about nontrivial transactions to provide continuity among customer contacts. So if a customer has an unresolved problem, that information is available at all appropriate channels (see Exhibit).
While many institutions are currently performing such analysis within a given channel (online banking navigation behavior, for example), the next step includes analysis of the customer's behavior across all delivery channels in the network. This enables gauging behavior in a broader context, analysis of all external providers of service, and analysis of how the customer uses these products.
The following list presents a few examples of this information management strategy:
• Using channel analysis to model and predict demand at the delivery channels after marketing campaigns or to gauge the impact of channel downtime on service or revenue, tying downtime to a quantified loss.
• Using customer preference to understand the individual customer's favorite channels for specific transactions.
• Keeping certain transactions open-ended to maintain continuity of service. This is done by having recent problem reports or unresolved account applications available at all delivery channels to present the agent with what may be peripheral yet important information about the current state of the customer relationship. This information can also be made available to the automated channels to keep the customer aware of the status of problems or account applications.
By itself, this management of information from the delivery channels offers many benefits to the institution and the customer. But the real value in the effective use of customer information at the point of interaction comes from the customer knowledge systems that are becoming pervasive in most retail banks.
Powerful customer knowledge systems for the future
The pace of implementation of integrated delivery channel architectures will quicken and eventually prevail at top banks. The deployment of powerful customer knowledge systems will also increase as more and more useful information can be distilled from the myriad of resources in the bank IT network.
As these two infrastructures evolve, the integration between them will also increase. Already, many institutions use information gleaned from customer knowledge systems to suggest new products to customers at the branch teller. Nonetheless, TowerGroup believes that much of the use of information between the knowledge systems and the delivery channels has yet to be fully realized. With most of the technology in place, banks must begin to form strategies around the use of information in the day-to-day contact with its customers.
As the capability to build on this flow of information grows, it has the potential to outpace the customer's acceptance of the bank's knowledge. Privacy is an emotional issue and, so, not entirely rational. Technology and policy can only go so far in ensuring that the use of information at the point of contact is not intrusive to the customer's comfortable level of privacy. Relationship training is more important than before as banks begin to learn more about their customers and use that information to bring financial value to them.
Ultimately, the management of customer information at the point of interaction is about service, about keeping the customer happy, and, simply put, about keeping the customer. It's about strengthening the relationship and showing the customer that the bank's knowledge can lead to real benefit. It's about increasing the bank's benefit as well, and doing it in a way that does not sacrifice the customer's long-term well-being. Finally, it's about trust as a result of knowing the customer and not as an excuse for misusing information.
IT managers within the bank, as well as business managers that rely on the delivery channels to service their products, know deep down that integrating the channels is the right thing to do because some benefits of channel integration are intuitive if not scientifically provable. The example of inconsistent account balance information is one that integrated delivery channels can solve and that most bankers agree is a source of frustration for the customer. Quantifying the effects of fixing this problem proves to be tricky, however.
Service and sales processes made more predictable
Still, many banks have implemented, or are in the process of designing, integrated delivery channel architectures based on these soft benefits as well as on the goal of maintaining and deepening the customer relationship in the face of competitive pressures. The implementation of integrated delivery channels has to date focused on the service side of the relationship equation.
On the sales side, marketing and product line managers have benefited greatly from a relatively plentiful source of analytics systems in the market. Bankers are getting better at knowing how to calculate customer profitability, predict propensity to buy, and even recognize attrition behaviors thanks to the segmentation and focus of solution providers in the analytics markets.
Customer knowledge databases and analytics engines have made the selling process more predictable then ever before. But the actual use of the information from these systems has been limited to mail campaigns and outbound telemarketing, both of which traditionally have had low response rates. Although, these rates have improved somewhat with the improved customer knowledge in hand.
Thus, for banks, neither the chicken nor the egg came first. Both arrived at the same time. The opportunities to combine these powerful capabilities are built-in to the very systems that enable them individually. But the marriage of integrated delivery channels and customer knowledge is not a trivial arrangement. For once, perhaps, technology is not the problem.
Effective use of information builds key customer benefits
The issues surrounding the collaboration of knowledge and delivery have to do with the management of the data and processes involved as well as some very emotional aspects of the customer's relationship with the bank and the extent to which individual customers perceive the bank as a threat to their privacy. To build on the full strength of this collaboration, banks need to completely understand the issues surrounding the use of knowledge, and then tread lightly.
Data acquisition through customer interaction is determined by the delivery channels, themselves, or through some integrated channel management architecture. Institutions are already collecting most of the available information today such as customer identity, accounts, channels, transactions performed, time of day, and all the pieces of information that have some value to the institution. Such basic information is included in the transactions that are sent to the core banking system or to some external system such as a credit processor. For now, there seems to be no need to collect additional information that is not currently acquired. What is required is the use of the data in managing the relationship with the customer in a more fulfilling way.
The shift to the existing use of data comes in the form of the centralized acquisition (or processing) of this information outside of the transactional sense. Along with the use of transactional information by the systems that perform the basic units of work, specialized applications collect and analyze information about the customer interaction, itself, to give insight into customer behavior. Banks can also collect and store information about nontrivial transactions to provide continuity among customer contacts. So if a customer has an unresolved problem, that information is available at all appropriate channels (see Exhibit).
While many institutions are currently performing such analysis within a given channel (online banking navigation behavior, for example), the next step includes analysis of the customer's behavior across all delivery channels in the network. This enables gauging behavior in a broader context, analysis of all external providers of service, and analysis of how the customer uses these products.
The following list presents a few examples of this information management strategy:
• Using channel analysis to model and predict demand at the delivery channels after marketing campaigns or to gauge the impact of channel downtime on service or revenue, tying downtime to a quantified loss.
• Using customer preference to understand the individual customer's favorite channels for specific transactions.
• Keeping certain transactions open-ended to maintain continuity of service. This is done by having recent problem reports or unresolved account applications available at all delivery channels to present the agent with what may be peripheral yet important information about the current state of the customer relationship. This information can also be made available to the automated channels to keep the customer aware of the status of problems or account applications.
By itself, this management of information from the delivery channels offers many benefits to the institution and the customer. But the real value in the effective use of customer information at the point of interaction comes from the customer knowledge systems that are becoming pervasive in most retail banks.
Powerful customer knowledge systems for the future
The pace of implementation of integrated delivery channel architectures will quicken and eventually prevail at top banks. The deployment of powerful customer knowledge systems will also increase as more and more useful information can be distilled from the myriad of resources in the bank IT network.
As these two infrastructures evolve, the integration between them will also increase. Already, many institutions use information gleaned from customer knowledge systems to suggest new products to customers at the branch teller. Nonetheless, TowerGroup believes that much of the use of information between the knowledge systems and the delivery channels has yet to be fully realized. With most of the technology in place, banks must begin to form strategies around the use of information in the day-to-day contact with its customers.
As the capability to build on this flow of information grows, it has the potential to outpace the customer's acceptance of the bank's knowledge. Privacy is an emotional issue and, so, not entirely rational. Technology and policy can only go so far in ensuring that the use of information at the point of contact is not intrusive to the customer's comfortable level of privacy. Relationship training is more important than before as banks begin to learn more about their customers and use that information to bring financial value to them.
Ultimately, the management of customer information at the point of interaction is about service, about keeping the customer happy, and, simply put, about keeping the customer. It's about strengthening the relationship and showing the customer that the bank's knowledge can lead to real benefit. It's about increasing the bank's benefit as well, and doing it in a way that does not sacrifice the customer's long-term well-being. Finally, it's about trust as a result of knowing the customer and not as an excuse for misusing information.
Technorati Profile
