Customer centricity: A proven source of revenue

Customer centricity might seem like a secondary concern for banks – but it isn’t.

Some firms may view customer experience (CX) initiatives as a trade-off and prioritize other outcomes that they see as having a clearer link to value, such as cost reduction or revenue growth. This may lead to customer experience initiatives being deprioritized or underfunded during budget season.

However, studies have shown that businesses that prioritize CX outperform their competitors in terms of revenue growth, customer loyalty, and brand reputation. Investing in CX initiatives can lead to a range of benefits, such as increased customer satisfaction, reduced customer churn, and improved brand perception. These benefits can ultimately lead to increased revenue and profitability, as well as reduced costs associated with customer acquisition and retention.

Prioritizing revenue growth and cost savings without embedding a customer-centric approach and culture into the firm is tantamount to leaving a well of resources untapped; it is important for firms to recognize that CX is a critical factor in achieving long-term success and sustained growth.

In recent years, many banks have recognized the importance of putting customers at the center of their business strategies and operations and have taken steps to translate this recognition into meaningful action. But the level of preparedness of banks to leverage CX varies depending on the specific bank, its culture, leadership, and resources.

Some banks have implemented customer feedback mechanisms, such as surveys and focus groups, to understand customer needs, preferences, and pain points. They have also invested in predictive analytics and data management systems to gain insights into customer behavior and preferences, and to personalize their customer journey. Banks have also made efforts to improve CX by simplifying their processes, providing digital solutions, and creating more responsive and empathetic customer service.

However, despite these efforts, some banks still struggle to truly prioritize customer centricity and embed it into their culture and operations. This can be due to a variety of factors, such as resistance to change, legacy systems, lack of resources or expertise, or conflicting priorities. Additionally, some banks may have a fragmented view of their customers across different business lines, which can hinder their ability to provide a truly seamless and personalized experience.

While many banks have taken steps to translate customer centricity into meaningful action, there is still room for improvement. To be truly customer centric, banks must continue to listen to their customers, leverage data and analytics, simplify processes, and align their entire organization around the goal of delivering an exceptional customer experience.

To do this, organizations need to have a customer-centric mindset and approach that extends beyond just their digital services. CX work is interdisciplinary and requires expertise in strategy, design, development, and organizational structure to effectively improve the experiences of both internal and external customers. This may involve redesigning internal processes, the target operating model (ToM), and policies to support better customer experiences.

Overall, improving the customer experience is an ongoing process that requires a collaborative effort from all parts of an organization, and a commitment to continuous improvement based on feedback and data.

Therefore, firms should not view CX initiatives as a trade-off, but rather as an essential component of their overall strategy. By investing in CX, firms can create a sustainable competitive advantage and drive long-term growth and success.

How to gauge your CX maturity level?

Banks can gain valuable insights into their CX maturity by assessing five essential components – people, process, data, technology and business strategy. Below is a comprehensive framework which banks can leverage as guiding principles to measure their CX maturity against these five pillars: