Customer Experience—Focus on Customer-Centric Approach

Traditional organizations, up to now, have not created close relationships with their customers. This is both the symptom and the cause of a “disease” that has been affecting the financial services industry for a long time. In the last few years, things have radically changed, and not surprisingly. Customers are now choosing differently due to their new needs and, especially, expectations. A new group of customers, named millennials (those born between 1980 and 2000), is causing radical shifts to customer demographics (Howe and Strauss 2009).

It is important to create comprehensive customer delight surveys and feedback. Most financial services organizations perform customer surveys using a relatively small customer sample size. New solutions enable financial institutions to survey their entire customer base (and possibly prospects through social media) and process the survey results in a fast and cost-effective way. In this way, they can obtain a truer picture of what would be available from their customer service responses.

The consequence of this process of “disintermediation” implies two critical points for traditional organizations:

  • • losing market shares in favor of new entrants; and
  • • testifying that their approach needs to change in the face of such

changed environment.

Table 3.2 Fintech's impact on customer centricity (PwC 2016)

Area of most impacts from fintech

Percentage of respondents (%)

Meet changing customer needs with new offerings


Leverage existing data and analytics


Enhance interactions and build trusted relationships


Enhance business with sophisticated operational



All fintech initiatives have a “customer-centric” approach, meaning that, whichever the plan they choose to pursue, customers must play a pivotal role: “The future belongs to banks that give the customer center stage in their business model” (Auerbach et al. 2012).

The path toward a customer-centric organization is full of hurdles and obstacles (Sheth et al. 2000). For traditional companies that are willing to start this journey, there will definitively be resistances that are complex, whenever internal and old routines may become unmanageable bottlenecks.

It is then useful to analyze how fintech initiatives have sped up the whole process by fostering customer centricity in traditional organization’s strategies.[1] A survey done by PricewaterhouseCoopers asked the question: “In which areas do you see the most important impact to your business from Fintech?” Table 3.2 shows the result of the survey.

According to PricewaterhouseCoopers, only 53% of the financial institutions believe that they are fully customer centric, while for fintech startup respondents this share exceeds 80%.[2]

McKinsey’s suggestions (2012) for designing a customer-centric organization define a clear, effective process:

  • • Vision and positioning: “Create an institution that customers want to bank with and employees feel proud of.”
  • • Customer engagement model: “Design an organization that delivers exceptional customer service where customers expect it, and excites them where they do not.”
  • • Development agenda: “Define an integrated development agenda to drive short-term gains and long-term growth.”
  • • Organization, capabilities, and insights: “Build the insights engine, organizational capabilities, and governance needed to sustain momentum.”

Fintech companies should recognize and shape customer touch points in order to ensure the right customer experience and to instill the desired brand image. Satisfaction and loyalty are primary parameters of an organization’s success as they increase sales and attract new customers (Keisidou et al. 2013). A structured approach is strongly suggested, where customer insight units may be part of each line of business with the aim of enabling customer centricity in all the decision-making processes. Customer cen- tricity should not be lived by organizations as something to “show” to their customers, but rather as something to “live” during daily operations. Organizations should design their internal functions to represent customer focus with the aim of allowing themselves to implement immediate solutions for the satisfaction of their customers (Shah et al. 2006).

It is important to build and shape a company culture that supports customer centricity; in addition, anchoring customer centricity in employees’ hearts and minds is critical (McKinsey 2012). McKinsey defined a test for traditional organizations to diagnose their customer centricity. Three sets of questions compose the test (McKinsey 2012):

  • • Vision and positioning
  • - The brand and the vision are built around a specific customer “promise”.
  • - Brand and vision are visible for everyone and fundamentally guide behavior.
  • • Development agenda
  • - The bank has a clear understanding of customer insights across lines of business.
  • - The bank invests intelligently in superior customer experience in a systematic and economically viable manner.
  • - The customer experience is centered around a few key touch points of superior customer experience.
  • - All customer-oriented activities are rooted in economic goals, not just satisfaction.
  • - The bank targets “hearts and minds” to drive attitudinal loyalty, as well as wallet to drive share.
  • - The bank coordinates revenue initiatives across functions and leverages the full marketing and sales toolkit.
  • • Organization, capabilities, and insights
  • - The bank has an organizational structure in place that enables customer centricity in business decisions.
  • - Employees have developed the mindsets and capabilities behind the customer-centric agenda.

Organizations should take into full consideration the changed nature of their customers, putting them at the center of their plans and strategies. These statements should be adapted to the specific situation of the company, as detailed later in this book.

  • [1] PwC (2016), Blurred Lines, How Fintech Is Shaping Financial Services., Accessed 31 July 2016.
  • [2] PwC (2016), ibid.
< Prev   CONTENTS   Source   Next >