Banking’s Wake Up Call

How to Adapt to the New Reality of Retail Banking Sales Practices


Rebuilding Trust

Over the past decade, many banks have relied on the practice of cross-selling financial products to achieve growth in a slow-growing economy. Bank employees were incentivized to cross-sell and up-sell additional products and services to existing customers. Too often, cross-selling involves selling products and services that are not aligned with customer needs. This has led to a crisis of trust, with EY finding that only 33% of customers trust their bank to provide them with unbiased advice.

of customers trust their bank to provide them with unbiased advice.

Source: EY1

But this lack of trust provides banks with an unprecedented opportunity to change and set themselves apart from the competition.

Banks that can successfully bridge the trust gap have the opportunity to transform customer relationships—and become the bank that customers love.

Powered by the right mix of technology, accountability and process simplification, banks can respond to the massive troubles they face and move toward a model that puts the customer at the center of their business. By focusing on their customers, banks can drive growth and change perceptions, becoming the bank that customers trust.

The model is based on embracing the right combination of needs-based and actionable customer processes, real-time and transparent reporting, and data that turns patterns into insights and insights into action. This combination may meet the needs of customers, bankers, management, internal compliance and audit, and regulators.

Having the ability to deliver personalized needs-based consultations at scale will be an essential first step in the aftermath of this dramatic shift in selling practices. To achieve that, however, banks must undertake a digital transformation and develop techniques to target customer channels, simplify operations and processes, offer mobile service anywhere and through all devices—while maintaining the stability that their customers depend on. It means creating a culture of innovation—and they must do it fast, before competitors get there first.

Learn firsthand what your bank can do to stay ahead of the competition, build personalized customer relationships that engender trust, and be the bank that customers love.

Chapter One

Tapping Digital Innovation to Unlock Customer-First Banking

Tapping into the digital innovation that is happening across the industry is key to bridging the gap from the traditional banks of yesterday to the nimble banks of tomorrow.

Banks face a pivotal moment: The industry is confronting the greatest period of disruption in its history. Banks are in the midst of a multi-wave trend of digital innovation that has presented them with unprecedented challenges and opportunities.

But becoming the bank that customers love begins with innovation. Why is innovation so important to banking? Innovation is recognized as essential to and the key driver of growth, success, and customer satisfaction in all industries. But it is of particular importance to the banking industry. Financial services is ripe for disruption, ranking fourth out of 12 industries most vulnerable to digital disruption in five years, according to a study by the Global Center for Digital Transformation.

Source: Global Center For Digital Business Transformation2

And yet only 10% of bank CEOs see their companies as innovation leaders, according to a survey conducted by PwC.

of bank CEOs see their companies as innovation leaders.

Source: PwC3

The truth is it’s easier for a technology company to become a bank than for a bank to become a tech company. Banks have seen new entrants to the industry from technology giants like Apple, Google, PayPal, and others. And looking forward, the outlook is more grim: 73% of Millennials would be more excited about a new offering in financial services from Google, Amazon, Apple, PayPal, or Square than from their own nationwide bank, according to a recent Millennial Disruption Index survey from researcher Scratch. Nearly half are counting on tech startups to change the way banks work, and believe innovation will come from the outside.

of Millennials say they would be more excited about a new offering in financial services from Google, Amazon, Apple, PayPal or Square than from their own bank.

Source: Scratch4

Technology giants have transformed the expectations of consumers everywhere and in every industry, but nowhere more so than in banking. Increasingly, consumers view banks as just another service provider, albeit one dealing in money. To meet their expectations, banks must be agile and know their customers in the way that Google, Amazon, Facebook, and Apple do. Banks must provide the same seamless customer experience across multiple devices, whether it’s a smartphone, tablet, laptop, or desktop. And banks’ responses must be in real time—a capability that will become particularly critical after the customer account scandal as regulators scrutinize sales practices at other retail banks.

The issue of bridging the digital innovation gap is especially acute; consumers across the U.S. and the world are adopting digital and mobile banking. In a recent report, the Federal Reserve found more than half of all smartphone owners use mobile banking and more than a quarter were using their devices to make mobile payments.

of smartphone owners said they used mobile banking.
said they used their smartphones for mobile payments.

Source: Federal Reserve5

Most importantly, by taking what has long been a fragmented, disjointed financial process and making it into one that meets customer needs at the back and front end of bank operations, digital technology can enable banks to come out on top with a differentiated experience customers will love.

To do that will require banks to become innovative, nimble, and customer-centric.

And that means banks will need to take a cue not only from the tech giants, but also from the financial technology startups—those small, nimble competitors who are not afraid of failing and who have made speed, ease of use, and customer centricity their defining mission.

Nimbleness, agility, speed, and innovation are not qualities typically associated with banks. Banks’ strengths lie in their scale, product range, customer data and knowledge, and distribution reach.

To meet the challenges of innovation, speed, and agility, banks may want to partner with fintechs that have developed key digital technologies. In addition to their nimble and innovative approach, many fintechs are pursuing the same needs-based personalized engagements that banks are seeking. And while some fintechs are direct competitors to banks, others are collaborators. In 2015, the level of investment into fintechs wishing to collaborate with the industry increased by 138%, now representing 44% of all fintech investment, up from 29% last year, according to Accenture.

Source: Accenture6

But to collaborate with fintechs and gain access to innovation will require engagement, a new platform, and a common ecosystem.

Incumbent banks have only a small window of between three to five years in which to transform themselves. Indeed, McKinsey & Co. recently predicted that digital banking has reached a tipping point. In the next five years, digital sales may account for more than 40% of new revenue in the advanced economies and customer segments. Banks that succeed in bridging that digital divide will see the lion’s share of revenues and profits fall to them. The leaders may realize a profit upside of 40%, according to McKinsey, while laggards could see their profits shrink as much as 35%.

profit upside growth is expected for bank leaders that undergo a digital transformation.
profit shrinkage is expected for banks that don’t bridge the digital divide.

Source: McKinsey & Company7

For the winners, digital platform integration, resources, and contextual experiences will transform and drive value in all aspects of their operations—from the back office operations, to creating simple and easy-to-understand products, to implementing and ensuring regulatory compliance. The winners will harness their trove of digital data to meet the needs of the customer—providing solutions, not just products.

Here is what PwC believes banks should focus on:

Develop a customer-centric business model that connects customer satisfaction and engagement metrics to compensation structure
Optimize distribution, offering mobile-first banking services anytime, anywhere
Simplify the business and operating model
Obtain an information advantage
Enable innovation and the capabilities required to foster it
Proactively manage risk, regulations, and capital

To those six priorities, we would add four more:

Learn from the nimbleness of fintech startups
Design for customer relationships, not transactions
Break down the barriers and bring transparency across lines of business
Create a mobile-first sales organization

Accomplishing these priorities will help you be the bank that customers love.

Chapter Two

Establishing a Needs-Based, Customer-Centric Business Model

Banks need to establish a personalized, needs-based approach in engaging with their customers.

Banks in the past could simply focus on selling products to customers. Their view of the customer was a simple one defined by transactions and accounts, and the customer was often unsophisticated and uneducated about the banking process and financial products.

But that is no longer the case. Today’s banking customers are more sophisticated—and expect more from their bank. They expect it to be able to deliver an omni-channel, simplified, and connected service at every touch point. They expect customer satisfaction to be the goal of every interaction, from marketing, to service, to the call center. They believe that there’s only one type of service: first-class service. And they expect solutions and a deep understanding of where they are on their financial life journey.

Banks have long been aware of the necessity to move away from a product-centric approach toward establishing a needs-based customer model—even before the recent banking scandal. But banks have struggled for many reasons.

Establishing a needs-based model that is both highly personalized and customer-centric calls for a significant commitment and investment. It is an effort that combines technology with a bank’s culture and values. In a survey of banks, PwC highlighted the following six areas that will require effort:


Better and more enhanced customer data collection

Banks have often struggled to connect the dots in their data. Advanced analytics are at the heart of understanding customers and differentiating between them.


Evaluating bank performance and compensation from the customer POV

If a bank is truly attempting to transform itself into a needs-based, customer-centric organization, it needs to develop metrics that deliver those key measures. Banks should learn from the open customer evaluations of products that are a feature of the digital world and sharing economy, and include evaluations from customers of a banker’s or business group’s performance. A good review on the bank’s website goes far: Two-thirds of people trust recommendations and opinions posted online, according to the Nielsen Global Online Consumer Survey.

Source: Nielsen8


Segmenting customers so they can be served better by a dedicated group of bankers

Banks can serve the needs of people by offering tailored products based on distinct customer segments and analytics.


Social media as way of understanding and engaging customers

Social media can become a powerful tool for banks to serve their customers in a bespoke manner. It allows the bank to reach out in a non-threatening way to engage and aid customers in their financial journey.


A mix of self-directed and interactive channels

Banks must be ready to meet the needs of customers on their own terms—whether that means customers who are DIY or ones who enjoy greater interactivity (either in person or via online assistance).


People and culture

Finally, a customer-centric, needs-based culture must be at the heart of the organization. Ultimately, the long-term view and lifetime value of the customer must take precedence over any short-term gains.

Chapter Three

Personalizing Relationships at Scale with a CRM

Innovation is critical to establishing a needs-based, personalized customer relationship. Banks, however, are hindered by outmoded tools and systems and a lack of visibility and insights into their customers. To reach the needed level of innovation calls for a 360-degree view of the customer and household; anywhere, anytime connectivity to service; tools for nurturing and personalizing the customer journey across multiple channels; and providing speed and agility across sales, services, and marketing.

In order to transform themselves, banks must put significant effort and resources into areas such as enhanced data collection, evaluating performance from the customer’s viewpoint, enabling configurable product features that customers choose, building out social media capabilities, reaching customers across all channels, and creating agile, adaptable products and services.

54% of bankers believe innovation in enhanced customer data collection is key to growth.
53% of bankers believe bank performance metrics from the customer’s POV will be critical.
50% of bankers say allowing for configurable product features customers can choose will attract growth.
48% of bankers believe using social media to learn customer preferences will drive growth.
41% of bankers believe a mix of self-directed customizable interaction channels will drive growth.
38% of bankers believe creating adaptable and agile products is key.

Source: PwC3

Banks must pivot from a disconnected, product-centric sales model, to an approach that incentivizes sales based on customer needs. To do this, banks need to implement a platform that allows them to have a whole view of the customer. The platform would enable enforced processes such as manager review and customer consent.

The solution can be thought of essentially as a “CRM Customer Interaction Journal,” which provides a record of every interaction the bank has ever had with a customer—similar to the way an electronic transaction journal serves as a storehouse and central record of transactions. The CRM Customer Interaction Journal enables a bank to break down silos to leverage the data needed for the customer-centric model. It offers full visibility and accountability across the processes of customer acquisition, growth in wallet share, needs assessment, consent management, and account originations.

The platform that this CRM Customer Interaction Journal sits on must be able to provide management with a 360-degree view into the state of the business organized by key activities, tasks, opportunities, customer contacts, goals, and objectives. The platform solution should be organized into key tables and dashboards to manage priority daily events. It should also provide an actionable customer view to understand all aspects of the customer relationship.

To be effective, the platform solution must satisfy these criteria:

Compliance should be embedded into the platform solution, providing direct, real-time visibility into key customer-banker communications and interactions, and delivering activity management reporting and accountability.

Finally, the platform solution should deliver a complete array of reporting and data insights through reports and dashboards that display and highlight critical data around growth, activities, needs, and compliance controls. The insights include opportunity management reporting, needs assessment reporting, activity management reports, and contact reporting to provide context into growth and customer satisfaction metrics.


Our Path Forward

Retail banking faces a new competitive landscape and must embrace digital transformation. To transform, banks need to pivot from a disconnected, product-centric model of selling, to a connected, holistic, and needs-oriented approach. To accomplish this, banks will need a digital technology platform that enables standardization, transparency, and accountability. Additionally, banks will need to be empowered with the right tools to deliver personalized engagements during key moments throughout the customer lifecycle.

The solution is essentially a CRM Customer Interaction Journal: A solution that allows for full accountability across the processes of customer acquisition, needs assessment, consent management, and account originations.

This is the path forward to drive growth, engender trust and become the bank your customers love.

Watch the Salesforce Banking Demo now and learn more about our banking solutions today.