The Wisdom of Relationship Centricity
By linking product, pricing and billing to CRM or other sales portals, customers can use self-service banking channels to pick the right products at the right price based on their transactional and account activity.
Why managing AI risk presents new challenges
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The difficult of using AI to improve risk management
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How to bring AI into managing risk
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Pros and cons of using AI to manage risks
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Benefits and opportunities for risk managers applying AI
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Confucius may have been born around 551 BC, but his famous quotations live on to this day. Here’s one about priorities that makes a lot of sense:
“To put the world in order, we must first put the nation in order; to put the nation in order, we must first put the family in order; to put the family in order; we must first cultivate our personal life; we must first set our hearts right.”
For years banks of been talking about shifting their focus from being product centric to being relationship centric. That involves making organizational, cultural and IT changes – none of which are simple or quick.
We’re talking about:
- Breaking down silos;
- Re-training the salesforce; and
- Leveraging self-service channels to improve customer satisfaction.
However, banks that have gone through the process successfully may reap a considerable return on investment. The Watermark Consulting Customer Experience ROI Study of the top 10 and bottom 10 publicly traded companies reveals the potential. Customer Experience Leaders generated a total return that was three times higher on average than the S&P 500 Index. Meanwhile, the Laggards trailed it by a wide margin.
Silos are deeply entrenched in banks for a couple reasons. Banks have to separate some business units to prevent conflicts of interest. But in most cases, the business units can’t talk to each other even if they wanted to because they can’t share data because they have disparate systems spread throughout the enterprise.
Lack of training is another major obstacle. Salespeople don’t know how to price a portfolio of offerings for a particular customer, and they don’t have the command and control in place to re-price when it comes to conducting service charge reviews. If banks can’t price it, how can they sell it?
Salespeople would be a lot more effective if they were trained and equipped to gain insight into customer behavior. For example, they may be able to win business from their customers’ suppliers by offering a discount. They can also increase profitability by incentivizing customers to move from one product to another.
The benefits flow upstream. Instead of setting price points and reacting to information daily, product managers can determine what makes the most profit, identify the best performing salespeople and make them product champions.
By using EPM from ArcOne, banks can link product, pricing and billing to Salesforce, or other sales portals, customers can use self-service channels to pick the right products at the right price based on their transactional and account activity. This is clearly an imperative for the Retail Banks who must move more quickly towards self-service to remain competitive.
The benefits are clear:
- Improve customer retention by offering the next best action to customers who don’t accept the price quote.
- Reduce branch and regional managers’ overheads by allowing customers to review their invoices and pay plans online with a direct link back to source transactional activity.
- Reduce the amount of time the operations team spends on resolving service-related issues down to one billing cycle.
ArcOne is currently working with a tier 1 US bank who wants to differentiate its offering by increasing and improving its customer relationships using pricing as the key to remaining competitive. ArcOne are working with them to design and deliver a customer-centric pricing and modeling system. It is early days, but it is hoped that this will:
- Increase new business and commercial customers based on its pricing capability
- Track every cost unit back to each individual customer, allowing the bank to identify unprofitable customers and tailor product and service offerings to restore their profitability.
- Achieve more than $50 million of incremental revenue uplift and profit.
The bank will accomplish its goals by setting the objective of customer centricity at its heart; cultivating the salespeople; and putting the salespeople, product managers, operations, IT and the bank’s overall strategy in order – just like Confucius said.
