With central banks not yet backing off of rate hikes and a largely expected economic slowdown, this year will be different than 2022. The high-level goals for your FI are going to be different as well. Your playbook for this year has also likely shifted. Trends like credit unions in aggregate seeing a 14% decline in Net Income for the first nine months of 2022 are top of mind for many banking leaders.
A change in direction and focus may be hard, but it doesn’t have to be impossible. It does require focus. A good first step is breaking down your team’s contribution to the 2-3 top priorities for the year that will make or break your FI and your year.
Pick the specific measures to focus on for the foundation of the year. Next, look to reduce the risk and cost of execution. Asking the following questions will help expose where the hard part will be.
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Do you have the right skills on board? Would you hire your current team to tackle the challenge you have before you?
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Do you have the right tools? (10/90 rule here). Tech is not the silver bullet. Identify the gaps you have in capabilities and experiment with the right approach. It’s never been easier to pilot an approach, tool, or SaaS platform and ensure it’s a fit.
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What customer behavior do you need to succeed? What metrics and leading KPIs can you rely on to assure yourself you’re on the right track?
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Improved conversion rates: Your first focus should be on increasing the clarity and relevance of your messaging and offers. Working in personalized experience and recommendation can drive CTR and entire funnel yields well into the double digits.
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Increased customer lifetime value: Look beyond the initial or cross-sell transaction and measure customer loyalty and retention. Knowing which customers drive the most revenue across their entire lifetime with you can revolutionize your approach to segmentation and how you look at ROI.
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Higher engagement rates: Like conversion rate, a focus on customer experience can be a quantitative measure of engagement. Indicators like click-through rates, time spent on website/apps, and the number of interactions with your FI can point to success and areas/segments in need of attention.
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Better targeting: Driven by lifetime value segments, more meaningful and actionable targeting is essential to best-in-class performance. Getting the right message to the right person at the right time results in a higher return on investment and bottom line.
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To quote Eisenhower, “Plans are worthless, but planning is everything”. To make commitments, you need a plan and options to fall back on when that first plan falls apart in the face of reality. This year will present many challenges, many that no one saw coming. Spending time now to build a course of action to meet your goals will pay off over the next 12 months. And if improved customer experience is on your agenda, check out our guide to overcome the five most common obstacles to implementing personalization in your FI.