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What It Takes For A Bank To Go Digital — And Keep Its Customers

The financial services landscape is quickly evolving from a rivalry between traditional banks and FinTechs to one of collaboration, but this gradual shift hardly banks customers are going to pick one financial service provider and stick to it.

In fact, according to Rohit Mahna, Salesforce senior vice president and general manager of financial services, one-third of banking customers today are what is known as “hidden defectors.”

“If we think of what is happening in banking,” Mahna recently told PYMNTS, “there is a gap in the expectation a customer has, and what they’re being given from the bank.”

The gap causes customers to perhaps set up an initial saving and checking account with one bank, then follow their wandering eyes to that bank’s competitors for additional services.

“There is a drift occurring,” Mahna said. “The customer is drifting apart from [his or her] bank. [He or she is] going to a competitive bank, an incumbent or a FinTech, to open [a] second, third, fourth or fifth account. For the bank, that’s something you never want.”

For banks and providers of CRM technology alike, hidden defectors are causing a shift in the conversation about how banks should attract and hold onto their clientele. It’s the type of conversation Salesforce has been having, too, as it announced the rollout of its Financial Services cloud for Retail Banking — a tool that targets how banks interact with and meet the needs of their customers — on Wednesday (Oct. 4).

One of the largest turning points in the customer service conversation, Mahna explained, is going from talking about the products a bank has to offer to talking about what the customer needs and positioning products from there.

“How do you differentiate in this modern-day banking system?” he said. “The way you differentiate is by focusing on the customer journey. That’s your center point. And, when you think of it that way, you need to provide different capabilities to the bankers in order to get a different experience to the customer.”

Traditionally, customer-facing employees across banks may search for customers using Social Security numbers or account numbers. But, for various professionals at the bank, these are siloed solutions that fail to provide context about a customer — for example, which other professionals they have spoken with at the bank — and can stand in the way of understanding the unique goals of each customer, Mahna said.

Banks’ CRM tools must have a holistic view of the customer, he added, and that tool must be accessible from any touchpoint in the FI.

“You need to see a complete view of the customer, any conversation that has gone on across lines of business,” Mahna explained. “It’s a complete CRM view across lines of business, [so] no matter who you are at the bank — you’re seeing the data that is relevant for you.”

It’s a more “intelligent” approach to the problem of hidden defectors, and demands a boost from technologies like Big Data, APIs and artificial intelligence (AI), the executive said.

Building open architecture for banks is critical to unlocking the power of APIs and enabling various systems both within banks and across financial service providers to be able to gain a unified, contextualized view of a customer at any point. And, in this conversation about how to understand the customer’s needs and position a product from there, Mahna noted AI is a powerful tool.

“I think artificial intelligence — and intelligence overall — is going to play an incredible role,” he said. “That role is about making the employees, the banker, the teller [and] the call center agent as intelligent as possible. Most banks have so much information about their customers. What artificial intelligence is going to do is bring that to the forefront, to the banker, in the context of the conversation.”

CRM platforms with integrated AI solutions are able to learn what a customer may need and perhaps even predict their needs ahead of time.

All of this, combined with banks’ partnerships and integrations with other financial service providers, could help the financial services industry address hidden defectors and take the steps they need to evolve. According to Mahna, that evolution has to go deeper than some banks may think.

“Being a digital bank doesn’t mean you’re building a new app or a new way to communicate through marketing lenses,” he said. “It’s also about changing your business processes internally and connecting internal systems. It’s about unlocking data sitting in siloed systems so you can provide a more complete view of the customer. Technology is going to play a key role here.”

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