In the highly competitive banking industry, banks and financial institutions (FIs) strive to provide greater financial products and services to remain competitive and increase customer retention and loyalty. In order to achieve this, most of the banks and FIs have started to transform digitally as they recognise the imperative to adapt to technological advancements. However, recent EY research on bank transformation reveals various failure factors, including insufficient commitment to customer centricity. Customer centricity is not just a buzzword; it is a strategic approach that shapes the way banks and FIs interact with their customers. But what exactly does it mean, and why is it crucial for the industry? Let’s delve into the heart of customer centricity and explore its impact on modern banking.

Understanding Customer Centricity in Banking

Customer centricity in the banking context refers to a strategy where banks and FIs prioritise the needs, preferences, and experiences of their customers above all else. Instead of forcing customers to adapt to what the bank offers, the idea is to build financial products, services, and experiences around what customers really want. Historically, banks and FIs have been product-centric, focusing on designing and pushing financial products without necessarily considering the unique needs and preferences of their customers. However, as technology advances and competition intensifies, it is crucial for banks and FIs to shift towards a more customer-centric model, where the customer experience takes centre stage. 

With that being said, customer centricity revolves around comprehending and fulfilling the requirements and anticipations of customers. This entails going beyond merely delivering financial products or services, instead, it involves actively listening to customer feedback, analysing their behaviour, and adapting offerings to suit their preferences. By prioritising customer needs, banks and FIs can tailor their strategies, products, and services to create meaningful and personalised experiences that foster loyalty and satisfaction. Embracing customer centricity not only enhances customer relationships but also drives innovation and long-term business success. This spontaneously raises the most crucial question: How to achieve customer centricity in banking?

How to Achieve Customer Centricity in Banking?

Hyper-personalisation

Hyper-personalised banking experiences are a critical component of achieving customer centricity in the banking industry. Deloitte’s analysis emphasises that in a digital economy, hyper-personalisation is not merely an option but a crucial imperative. By leveraging advanced data analytics, artificial intelligence (AI), and machine learning (ML), banks and FIs can provide hyper-personalised customer experiences that cater to their unique financial situations and preferences. In particular, this approach requires the utilisation and integration of predictive analytics and recommendation engines to deliver personalised recommendations in real-time. With JurisTech’s digital customer onboarding platform, banks and FIs can impress their customers with tailored financial content and product suggestions perfectly aligned with their profiles during the onboarding journey. 

Furthermore, banks and FIs can also deliver hyper-personalised customer experiences through the integration of AI-driven chatbots. Customers often have specific questions or needs when it comes to banking services, but traditional support channels may be limited after business hours. AI-driven chatbots, on the other hand, are 24/7 and can provide tailored assistance in real-time, answering queries, providing account information, assisting with transactions, and guiding customers through financial processes. This underscores the importance for banks and FIs to adopt AI-driven technologies to provide hyper-personalised customer experiences, reflecting their customer-centric approach. Other than that, leveraging technology like Generative Al (Gen AI), banks and FIs can adopt a hyper-personalised content assistant to deliver highly customised and tailored content and services to banking customers. Particularly, the hyper-personalised content assistant can generate a myriad of personalised financial literacy content that can benefit their customers, potentially increasing the likelihood of customers purchasing the offered financial products. 

Omnichannel Experience

Omnichannel experience is paramount for banks and FIs aiming to achieve customer centricity. The omnichannel experience focuses on providing a cohesive and consistent customer journey across all touchpoints, whether it is through mobile banking apps, online platforms, or traditional brick-and-mortar branches. With that being said, digital transformation plays a significant role in creating an omnichannel experience. By integrating digital technologies into all aspects of the banking process, banks and FIs can provide a seamless and consistent experience across various channels. This integration enables customers to transition smoothly between channels, ensuring that their journey with the bank or financial institution (FI) is efficient, frictionless, and enjoyable. 

Additionally, to create a more wholesome omnichannel experience, more is needed than just looking at the front-end technologies. An intuitive and user-friendly backend portal is crucial for your users to access to increase your business workflow flexibility. For instance, being able to edit forms on the fly, having a no-code backend system for non-technical users, having highly configurable fields to meet your unique business process, or having powerful visual dashboards and analytics to aid your decision-making process. Specifically, banks and FIs can strategically implement JurisTech’s digital customer onboarding platform that enables customers to apply for loans and financing products at their convenience, regardless of time or location.

Customer Feedback and Communication

Customer feedback is invaluable for achieving customer centricity. By actively soliciting and analysing customer feedback, banks and FIs can identify areas for improvement, address pain points, and enhance the overall customer experience. Effective communication strategies between banks and FIs and customers are also crucial for building trust, fostering transparency, and ensuring timely and accurate information exchange. 

For example, the implementation of  a Gen AI-powered dynamic FAQ generation systemGenAI can assist banks and FIs to dynamically generate, analyse and update FAQs for banking services and products. This allows the banks and FIs to analyse customer inquiries, feedback, and interaction data in real-time. Moreover, by leveraging machine learning algorithms and natural language processing techniques, these technologies are able to further identify common customer queries, trends, and preferences, and automatically generate and update FAQs accordingly.

​Another classic example would be the utilisation of AI-driven chatbots for banks and FIs to listen attentively to customer concerns and provide them the ability to respond promptly. By establishing open channels of communication, banks and FIs are able to demonstrate their commitment to understanding and meeting the needs of their customers. This proactive approach not only fosters customer loyalty and satisfaction but also positions the banks and FIs for long-term success in a competitive market landscape.

Key Challenges in Achieving Customer Centricity in Banking

Inefficient and Manual Workflows

Inefficient and manual workflows pose a significant challenge for banks and FIs striving to achieve customer centricity. These outdated processes often rely heavily on manual data entry, paper-based documentation, and disjointed systems. As a result, customer interactions can be marred by delays, errors, and inconsistencies, leading to frustration and dissatisfaction among customers. Moreover, such workflows hinder agility and responsiveness, making it difficult for banks and FIs to adapt quickly to evolving customer needs. Consequently, banks and FIs that continue adopting inefficient and manual workflows will find it increasingly challenging to achieve customer centricity over time.

Cultural Resistance

But what keeps banks and FIs stuck in the aforementioned challenge? Cultural resistance represents another formidable obstacle to achieving customer centricity in banking. Understandably, many banks and FIs may encounter internal resistance to change, especially in traditional organisations with deeply ingrained processes. This resistance often stems from fear of the unknown, reluctance to deviate from familiar practices, and concerns about disruption or loss of control. However, failure to adapt to evolving customer expectations and industry trends may result in a loss of competitive edge and market share. As competitors embrace transformation and adopt customer-centric strategies, banks and FIs that resist change risk falling behind and missing out on opportunities for growth and success.

Technological Limitations

On the other hand, technological limitations can also be one of the key challenges that hinder banks and FIs in achieving customer centricity. Integration issues and data silos hinder their ability to implement customer-centric strategies effectively. Integration problems arise when systems within a bank’s and FI’s infrastructure struggle to communicate due to the adoption of outdated technology. Many banks and FIs operate on outdated systems that lack flexibility and scalability, leading to siloed data and disjointed customer experiences. This fragmentation inhibits banks from gaining a holistic view of their customers and providing seamless services across channels. Therefore, this will ultimately hinder their ability to personalise interactions and tailor offerings to individual customer needs.

Best Practices to Overcome These Challenges

Automated and Streamlined Workflow

To overcome the initial challenge, banks and FIs must prioritise digitalisation efforts by incorporating advanced technologies into their operations. By prioritising digitalisation, banks and FIs can effectively automate and streamline their workflow. For instance, JurisTech’s digital customer onboarding platform, robust loan origination system, and debt collection system can effectively assist banks and FIs to automate and streamline their end-to-end lending processes. Through the implementation of the solutions, banks and FIs can seamlessly automate their complex lending processes, reduce manual intervention, and notably enhance operational efficiency. This shift towards automation not only improves the speed and accuracy of customer interactions but also frees up valuable resources to focus on delivering exceptional service. As a result, banks and FIs can achieve customer centricity and enhance their profitability. 

Cultural Transformation Initiatives

Frank Elderson, Member of the Executive Board of the European Central Bank (ECB) and Vice-Chair of the Supervisory Board of the ECB, asserted that culture can deeply influence the behaviour within a bank or FI, ultimately determining their destiny. Thus, banks and FIs must embark on cultural transformation initiatives that foster a customer-centric mindset among employees. This involves investing in comprehensive training programs that emphasise the importance of customer focus, open communication channels that encourage feedback and collaboration, and leadership support that champions customer-centric values. According to Forrester’s State of Customer Obsession Survey 2023, 100% of customer-centric companies prioritise educating their employees on their roles. This means that it is essential for banks and FIs to provide internal training programs that can foster a company culture where customer centricity thrives.

Technological Advancement

To address integration issues and data silos that due to outdated technologies, banks and FIs must embrace technological advancements that enable seamless integration and data accessibility. For example, JurisTech’s digital customer onboarding platform, equipped with Web API integration capabilities, is able to facilitate the swift integration of a wide range of core banking systems and third-party systems such as leading credit bureaus in Malaysia like Credit Tip Off Service (CTOS), Credit Bureau Malaysia (CBM), Central Credit Reference Information System (CCRIS), and Suruhanjaya Syarikat Malaysia (SSM). By investing in modern technology infrastructure, banks and FIs can effectively overcome technological barriers like integration issues and data silos. 

In addition, to resolve the issue of data silos, banks and FIs can even improve search functionalities within banking databases to facilitate more efficient and intuitive information retrieval for employees. To be more specific, banks and FIs can integrate Gen AI-powered intelligent search algorithms into the bank’s and FI’s database systems to enhance search capabilities by understanding natural language queries and context. By leveraging semantic search techniques and machine learning models, these systems can deliver more accurate and contextually relevant search results.​ In other words, if banks and FIs can address the integration issues and data silos, they can definitely be more customer-centric and competitive in the banking industry.

Conclusion

Customer centricity is not a one-time project; it’s an ongoing commitment. As banks and FIs experience digital disruption and evolving customer expectations, prioritising the customer experience emerges as a key differentiator for success. In other words, banks and FIs must prioritise understanding and fulfilling customer needs, leveraging advanced technologies, and fostering a culture of innovation and responsiveness. By embracing these principles, banks can not only enhance customer relationships but also drive long-term growth and success in an increasingly competitive industry. Ultimately, the future of banking lies in recognising that each transaction represents an opportunity to build trust, deliver value, and create meaningful connections with customers.

About JurisTech

JurisTech is a global leading lending and recovery software solutions provider, specialising in enterprise-class software for banks, financial institutions, telecommunications, and automobile companies worldwide.

We power economies by reimagining financial services with cutting-edge software solutions, leveraging composable architecture and generative AI. Our offerings include artificial intelligence (AI), auto-decisioning, digital customer onboarding, loan origination, credit scoring, loan documentation, litigation, and debt collection.

Our solutions have enabled businesses across a broad array of industries to undergo digital transformation, providing enhanced customer experiences and, most importantly, achieving their business goals.