COMMENT
IBS Journal July 2017
19
Strong product management must underpin any push toward client centricity
Nancy Langer, President and Chief Operating Officer, Zafin examines how the once-staid industry of banking is changing as older players are tasked with navigating increasingly onerous regulations and disruptive competitors
and Revolut trumpeting their digital-first, client-friendly approach, many pundits criticise incumbent banks for being purely product-centric rather than client-centric. In response, many banks are moving beyond product centricity to focus on improved client service.
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However, it could be argued that many large banks still struggle with their initial goal of “being product-centric.” Moving on to client service before getting product offerings right is a sure-fire way to set the project up for failure. One cannot be done without the other. The truth is that once the product management function is properly equipped, the bank can focus on its clients and sell products at the same time. A bank’s most compelling value proposition is to provide the right product to the right client through the right channel at the right time and at the right price. This is what compels and keeps clients. So prioritising products doesn’t have to mean a pushy sales approach. It’s about adding value by matching needs to products and services on the client’s terms.
We’ve been publishing for over a year about the
implications of PSD2 on incumbent banks – namely, that they risk being relegated to becoming mere providers of capital if they don’t adapt both their thinking and their technology. While large banks might struggle under the
ith new challenger banks like Monzo
weight of age-old infrastructure, all hope is not lost. Their primary asset – massive amounts of client data – presents an opportunity to extract deeper insights to inform their product offerings at scale. Compared to their nimbler, but data-starved, competitors, this is a potential source of competitive advantage if used correctly.
The win-win of product-matched personalisation
By understanding the needs of individual clients and making a clear and personalised offer that is both relevant to them and profitable for the bank, banks can enhance the client experience while boosting their own margins. This isn’t exactly rocket science, but it’s this client-focused approach, and the resulting win-win situation for both parties, that remains so elusive.
While fun digital interfaces are nice, the ability to match clients to the right product will always be more highly valued. Consider a broadband client choosing between providers. If the package options aren’t clear on the website or are too limited, a shiny app that gamifies your bill payment can quickly appear frivolous.
Flashy tech is not a silver bullet
Investing in digital capabilities to improve client service can have a positive impact on satisfaction scores, net promoter scores and retention. However, investing in client service while retaining a legacy product paradigm is like building a house on sand. Without a solid foundation, problems lurk.
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