Retail banking is clearly at an inflection point. Banks are under historical threats from non-financial institutions such as Paypal and Walmart and customer expectations are changing. Customers are demanding seamless, multi-channel sales and service experiences just like they are experiencing when they buy non-banking products in the retail sector. This means banks have to transform to remain competitive or be left behind.
As we enter the New Year, we believe that the sales organization, including the branch, online, and customer service center will be the first to experience transformative changes. Here are four trends in 2014 that will act as catalysts for these changes.
- Banks will try to recapture fee income: 95% of non-interest, fee generating products are opened in the branch. Due to increased regulation, banks have seen a decline in revenue from these products and need to find ways to recoup fee income that was generated prior to regulation.
- Branches will become measureable profit centers, not just expense centers: Banks are facing many challenges managing profitability across their branch network – which happens to be their biggest expense. They haven’t had the insight they needed to manage and measure for potential, captured and untapped profits from their branch network. The branch needs to evolve and embrace new business processes as well as technology to remain competitive.
- Banks will adopt a more competitive sales culture: Because of lucrative profits from margin, loans and fees, banks have historically shied away from efforts focused on proven sales methods found in other industries. However, now that the market has become competitive, the lack of sales infrastructure hurts. More progressive banks have begun to hire sales management from other industries that bring the expertise and experience needed to change this culture. They are beginning to implement sales best practices and execution strategies that have been successful in other industries and are using technology to help them. These banks are implementing sales and CRM applications to automate these new processes and synchronize sales, marketing, and customer service activities across all channels.
- Banks will invest in omnichannel initiatives: Banks recognize their omnichannel challenge as mobile banking moves to the forefront. The consultative nature of banking entails a high-touch approach with customers and makes it challenging to deliver consistent services and recommendations across all channels. With more than 100 products and multiple channels including online, branches and the customer service center, it is very difficult to create a seamless experience for the customer. The omnichannel initiative has extensive IT implications that could take years and millions of dollars to implement.
Ignite believes that Guided Selling and Analytics is an economical first step to begin the sales transformation process. Most of our customers see an ROI with the 30 days, all see an ROI within the first 90 days.
