There is no doubt about the inflection in banking going on right now. McKinsey’s Global Banking Annual Review 2021 addresses this by highlighting broader themes and trends worldwide. Some may not directly impact you today, but you can likely hear echoes in the distance.
Two key questions the report poses are relevant no matter the size of the institution:
Do we have highly differentiated customer relationships? In which cross-industry journey can we claim true customer ownership?
A successful digital strategy is no longer just a matter of migrating sales and servicing from branches to an app. As customers move toward life goals such as buying a home, planning for retirement, or opening a new business, banks need to move from a product-centric perspective to an end-to-end view of customer journeys, both within and outside of banking (say, housing or SME short-term financing). This broader view can build deep relationships and unique access to target segments.
And more to the how of this:
Do we have privileged data and insights on customers, beyond what our banking and nonbanking competitors have?
The coin of the realm in today’s financial-services environment is proprietary data on customers. Leveraging data and insights with real-time, continuously updated A/B testing supported by artificial intelligence will allow banks to build nano-segmentation models and provide significant advantages. It is no longer enough to isolate broad segments such as “affluent” or “SME” customers; financial institutions must identify the needs of so-called segments of one.
Can you confidently answer yes to these challenging questions? Do you have plans and contingencies in place to address some of these significant trends? Does this seem overwhelming?
Providing relevant, personal, and differentiated experiences for your customers is imperative to continued success. Leveraging your 1st party data, which you alone possess, is a foundation for competition in this diverging market. A 10-minute call to get answers to your questions can make all the difference.