Analytics has barely got going Analytical prowess is a key factor in customer engagement. For this reason, the survey asked respondents how far they used descriptive, diagnostic, predictive and prescriptive insights to engage with customers. Once again, the results were underwhelming, even in the case of descriptive analytics – the first stage in a linear evolution that is followed, in that order, by diagnostic, predictive and finally, prescriptive analytics – the proportion of banks who claimed they were very successful was only 5 percent. So, when it comes to leveraging insights from data and analytics to help customers spend, borrow, save or invest better, it seems that banks are at the earliest stage of the (typically long and multi-stage) customer engagement journey.
Engagement services are grossly underutilised How well a bank exploits various engagement services, such as personal
integration with accounting or other third-party applications (13 percent), and personalised relationship-based pricing (10 percent) were the only other services to record double-digit results. Banks have every reason to be concerned because in an undifferentiated products and services market, engagement or engagement-led selling is their only way to stand out.
BANKS HAVE EVERY REASON TO BE CONCERNED BECAUSE IN AN UNDIFFERENTIATED PRODUCTS AND SERVICES MARKET, ENGAGEMENT OR ENGAGEMENT-LED SELLING IS THEIR ONLY WAY TO STAND OUT financial management (PFM) tools or relationship-based pricing, is another key driver of customer engagement. Here too, the performance of the surveyed banks was disappointing. PFM or budgeting tools was the only service where they reported moderate results, with 20 percent of respondents agreeing it had been successfully deployed at scale. Account aggregation (17 percent),
The fourth element in engagement, one that the study does not cover, is unique products. New-age players have led the way in engaging customers with innovative products such as Buy Now Pay Later and Smart Deposits. In contrast, incumbents have let the opportunity slip, allowing fintech companies, neo banks and ecommerce platforms to seize the advantage.
How to achieve Golden Engagement Given the importance of engagement in every area – from customer retention to differentiation –banks need to quickly close the gap to the leaders. However, customer engagement is a long, systematic journey with no shortcuts. Based on our experience, we have devised a three-tier framework called the “Golden Engagement Circle” which can help banks navigate this journey to strengthen engagement across all dimensions. In brief, the Golden Engagement Circle is a holistic model of customer engagement encompassing the different layers of organisational maturity. The model envisages putting people, processes and technology at the centre to improve banks’ ability to sell, onboard, converse and serve. Seamless integration across channels and platforms further enhances engagement. Done right, with each interaction the bank will help drive financial well-being and empower customers to save, pay, borrow, insure and invest better. We hope you will find the survey results and the Golden Engagement Circle framework useful to benchmark your organisation’s progress versus peers and take corrective measures where necessary. mea-finance.com
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