The first-annual SPARK! Financial Services Executive Summit used an unexpected approach to collaboration to generate unconventional ideas about the future of financial services. The ideas came from enthusiastic and engaged senior executives from across the financial services industry who are all committed to improving the industry’s image in the eyes of their customers and the public at-large.
As I reflect on the summit sessions, I am reminded of the many threads of change that have occurred in banking during my time in the industry, which made me think of the saying “Everything old is new again”. Here are two examples, using headlines from American Banker, which has been chronicling banking since 1835. A new customer relationship?
Throughout the 1990s the banking industry was abuzz with terms like “360o view of the customer”, “customer intimacy”, and “branch of the future” among many, many others. As you can see in the title article, Cross-Selling Is Still About Knowing the Customer (American Banker, 1999. note: subscription required), banks were busy at the time acquiring non-bank financial services firms to cross-sell and up-sell to a larger pool of customers. Today, the need to grow share-of-wallet with each and every customer (and retain them) is even more important. The panel discussion on customer analytics really brought home the importance of knowing and understanding customers in the post-crisis era where banking growth and profits are constrained by the slow economic recovery and increased regulations.
What is the key?
The answer is customer analytics – mining the mass of customer-related data for segmentation, contact preferences, next best product offer, etc. The panelists stated that “analytics have to be front and center” with a focus on optimization, which in the marketing realm I would define as using mathematical techniques to maximize the return on each and every customer interaction. As one panelist put it, “use the data, make it real for customers”, or in the words of another panelist “marketing [that is]relevant to you as an individual, through [your]preferred channel”. When one panelist commented about “spending more time talking about customer analytics in the last 12 months than in the last 24 years”, it is to me a reflection that banks are really focused on connecting all of the back-office marketing processes formerly used in the ‘90s for statement flyers and campaign letters to the point (and time) of each and every interaction. It is that mission to create a culture in banking that says, “we will do the right thing for customers every time” (quoting a panelist) that will allow banks to have a positive answer to the question posed here – Can banking regain its lost market share? (American Banker, 1994).
This summit allowed financial services industry executives to get together in a collegial environment and collaborate on topics that are pivotal to their continued success in the marketplace. These leaders can accomplish more together than separately. Read more about what they discussed on the SPARK! Resources page.