Breaking product silos in banking
Banks are organized in a way that takes away from the customer and gives special focus to the different products the bank has to offer.
Most banks currently have a product-focused approach in which they are divided by departments and each deals with a specific banking product.
Having separate departments, each specialized in its own product makes sense to a certain degree. It allows for a deeper and more accurate knowledge of the product being sold and monitored.
However, this strategy doesn’t account for the disadvantages in terms of customer service. A customer who has several different products within the bank, such as a mortgage and a savings account, for example, has his customer data spread out over several departments. And, because these departments don’t communicate properly with each other, clients are left to the care of a bunch of departments who only have knowledge of the customer data related to their own product.
Disconnected departments also tend to have their own goals, strategies, systems, etc. which makes for different ways of dealing with customers.
More and more, customers demand a seamless, attentive and personalized service which is difficult to achieve when their accounts are fragmented and distributed across different departments.
If a bank is unable to consolidate customer information and provide a quality overall customer service, what is to stop customers from purchasing different products from different banks?
Banks have a larger probability of gaining the loyalty of their customers and convincing them to consolidate all their accounts in one place if they are able to provide them with top of the line customer service based on integrated and communicative departments. This is how they will be able to derive more value from their customers, by having an overall view of each customer’s account. This will allow the bank to cross-sell and upsell more easily and increase customer profitability.
What can contribute to this switch from a product-focused approach to a customer-focused approach?
Usually each department has its own system, built specifically for that department’s needs and work process. This makes it hard to consolidate customer data as it is spread across several systems, different amongst themselves in the way in which they store that data. This leads to different databases across multiple departments.
Rearranging the bank’s data centers and centralizing all these databases into one place will be extremely beneficial in terms of customer service.
Due to the product-focused approach and the consequent lack of communication between departments, customers are forced to deal with an account manager in each department.
This leads to inefficiency in several ways. Not only is it a waste of resources to have more than one account manager responsible for each customer, but it also leads to poor customer management.
Having one account manager per customer would greatly increase customer service. However, because customers tend to own different banking products, it becomes important to train these account managers in every area of the bank so they can assist their customers regardless of the product.
So, once again, breaking the product silos still in place in the banking industry is extremely important to increase customer satisfaction and be able to derive more value from current customers.
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