Three biggest mistakes in Retail Banking… and how to fix them

As the evolution of financial services accelerates at a relatively rapid pace, retail bankers are challenged to understand that the banking practices and performance that have been satisfactory for decades will not be acceptable going forward.  Customers know more, expect more and are far less loyal to a particular bank brand than ever before.  Driven by these facts, virtually every bank is assessing how they need to change and are in varying stages of developing and executing revised growth strategies.

However, there are three big mistakes that almost all banks are making right now that will need to be addressed if they are to thrive.

1. Counting on beginners to do an expert’s job.

There will be fewer and fewer transactions at branches as banking activity moves to mobile. This means that there will be fewer opportunities to differentiate your bank with customers and prospects through personal service. Yet, who do banks count on to engage with customers?  Many hire younger people that do not have a background in financial services. Well, that’s a bit of an understatement.  Much of the time banks are competing with n

on-bank retail stores or rental car companies for inexpensive labor to meet their very dynamic staffing needs. Consider that for banks on average, the turnover rate for fulltime employees is 35% and 52% for part time employees. So now imagine the training challenge that banks have in trying to make these employees consistently capable of addressing the financial needs of a customer or prospect.  What a difficult challenge! And it doesn’t look like the labor pool will be getting any bigger or more educated anytime soon.

THE FIX – What can banks do to change the dynamic so that every one of their frontline bankers can address the needs of retail customers with confidence and competence? Long term, the answer will be artificial intelligence driven self-serve kiosks.  Short term, the answer is to support every branch banker with dynamic digital conversation guides that allow them to perform consistently like experts in discovering customer needs and meeting those needs precisely with the right product and service.

2. Counting on the “Matrix” to sell your products and services on-line

In the movie, the “Matrix” is a complex, dynamic, computer program that drives the running of a simulated world.  On the other end of the scale, in a bank the “matrix” is a static map of financial products arranged on the bank website that is supposed to help a prospective customer decide which products are best for them to use. Almost every bank has this matrix in some form. The more products, the bigger and more confusing the matrix gets.  Interestingly, both the movie series viewer and the bank customer will more than likely be a bit confused after viewing the respective “matrix”.

The key words here are “static” and “product”.  As more transactions take place via mobile banking, the level of excellence with which the customers are engaged will be the key differentiator to acquire and keep customers.  Customers will stay engaged on-line with dynamic interaction that is needs driven rather than a static interaction that is product driven.

THE FIX – How do we know this is true? The results speak for themselves.  When a dynamic interactive dialogue is used on-line to help customers and prospects determine which products and services are best for them, conversion rates climb from an average of 2% to an average of 50%.

3. Counting on your CRM system to grow sales.

You have heard the saying “you can lead a horse to water but you can’t make him drink”, which is, interestingly enough, the same dynamic that occurs with CRM systems at banks. Many bankers are under the false impression that if they have a great CRM system that it will improve their sales. To be clear, a great CRM system will improve the organization and focus of the sales team but it does not improve the actual sales engagement with customers.  Today unless the individual sales people can improve the effectiveness of the actual sales dialogue with clients and prospects, the improvement to the overall sales and marketing process has the potential to run out of steam the second the sale person starts the dialogue with the customer.

THE FIX – So, in order to achieve the promise of increased sales that is often used to justify the purchase of a CRM system, it should be augmented with a digital guided sales technology that will improve the effectiveness of every personal sales interaction but will also monitor, track and send the conversations to CRM.

Count on a clear customer dialogue

In conclusion, it is clear that in order for banks to continue to grow and be relevant to an evolving demographic base they must engage every customer and prospect in a consistent, dynamic and customer focused way within every channel.  In order to accomplish this, banks must develop a sales enablement ecosystem that provides all the digital tools necessary for an engaging customer experience on-line and in person.  The missing link has consistently been an effective customer engagement technology. That missing puzzle piece is now available. This is an obvious, easy to implement technology that should be a standard for all banks going forward.

Give us a call to explore how you can fix these three issues and more. Schedule a time to speak to an expert or email us.

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