One size does not fit all

Doesn't it strike you as odd that apparently every bank in the UK offers great customer service? It's right there. You can see it on the television and web. All the daily papers have hordes of advertising proclaiming it. In between the 'here for you' and the 'for the journey' slogans, they claim to exist as some form of modern day financial fairy godmother. But do they really care? And do they really know who you are? As banking has become more and more centralised, the banking industry's knowledge of its customers has become increasingly distanced. So what is the impact?, writes Michael Nuciforo

Michael Nuciforo is a global mobile thought leader and futurist who was previously the head of mobile banking at RBS. Prior to setting up his own business, Keatan, Nuciforo was responsible for delivering the UK’s Number 1 mobile banking service for iPhone, iPad, Android and BlackBerry across both RBS and NatWest brands. He now advises to some of Europe’s largest banks and retailers on mobile strategy.

Before moving to London in 2010, Nuciforo was responsible for the mobile banking service at the ANZ bank in Australia. During his time in the company he oversaw a number of strategic developments including the world renowned ANZ goMoney application that delivered a unique mobile number based person-to-person payments proposition.
The winner of six major industry awards and prolific author with popular industry publications and his own blog theboldwar.com, Nuciforo is a regular speaker around Europe and the Middle East regarding the opportunities and threats of mobile technology.

 

Doesn’t it strike you as odd that apparently every bank in the UK offers great customer service? It’s right there. You can see it on the television and web. All the daily papers have hordes of advertising proclaiming it. In between the ‘here for you’ and the ‘for the journey’ slogans, they claim to exist as some form of modern day financial fairy godmother. But do they really care? And do they really know who you are? As banking has become more and more centralised, the banking industry’s knowledge of its customers has become increasingly distanced. So what is the impact?

Banks are difficult places to deliver anything innovative. We all know that. But what often gets overlooked when deciphering why banks suck at innovation is the fact that they so often aim to please everyone. There is a palpable fear factor that seems to grip most Senior Executives when presented a proposition that does not cater to all customers. The issue here is that all of the major UK banks have such a large breadth of customers, that waiting to identify a proposition that is compelling to all, is nigh on impossible. There are too many younger customers to focus on branch reforms, and there are too many older customers to invest totally in mobile banking services.

If anything, trying to define new propositions in the context of making all customers happy does anything but. With limited clarity on end user needs, most propositions become a concoction of missed features and misplaced ambition. It becomes frustrating for product managers and in turn diminishes the creativity required for stand out ideas. I have seen countless fantastic propositions halted by the fear of bad breadth (almost as bad as bad breath). The naysayers are the first to highlight the customers who won’t adopt it, instead of focusing on the customers that will. They see the glass as half empty. However, anything truly innovative or different is not suited to the masses by definition. Simply refer to the laws of diffusion.

This is the challenge that the big UK banks have. Because of the size of their customer bases, most banks struggle to look below the surface. They can only focus on the big numbers; the 10 million cardholders; the 5 million internet banking users; and the 2 million mobile banking users. Banks are treating their customer base as one giant herd of cattle and a decline in customer experience has become the core result. By looking at the vanity numbers on the surface, they miss all the insight and context that sits underneath it. For simplicity, banks have assumed that their customers are all the same. They have ignored the major differences.

This conundrum reminds of a story told by Guy de Maupassant, a famous 19th-century French writer. Guy was a struggling writer who was just learning his trade when he was pulled up by an older peer. It was some advice that would change his perspective on writing forever. ‘Go out into the streets of Paris,’ he was told, ‘pick out a cab driver. He will look to you very much like every other cab driver. But study him until you can describe him so that he is seen in your description to be an individual, different from every other cab driver in the world.’ The banking industry could learn a lot from this approach.

As they say from knowledge comes power, and in the case of banking, from customer insight, comes the power to make the right choices about what to deliver. With the richness of data available to banks it is nothing short of shameful that they don’t have a better understanding of end user needs. If banks can go deeper they will find that between every product and some consumers there is an individuality of need which may lead to an idea. Banks also have the opportunity now to validate ideas and receive feedback at a one-to-one, real time level through the power of social media and mobile.

Instead of focusing on 10 million cardholders, it could be how many single mums, how many bike riders, how many full-time teenage workers. It can then go even deeper. How many fathers who overseas more than twice a month. Within this context, truly innovative propositions can be defined.

It is also important to focus this insight on who your customers are, not what they want. The ‘what they want’ will come later. This is important because asking customers ‘what they want’, limits your propositions to what is already known. Ask what they want and they will say longer branch opening hours and more ATM’s. Sure this is useful, but we want to take this further. By mapping out these customers and their journeys the fun begins. The father, who travels twice a month, could find it useful to set up an automated message to his wife when he pays a bill. He often doesn’t’ have the chance to speak to her until he returns from Dubai. The single mum could do with an app that tells her the traffic and the best petrol prices during her daily commute.

There are various tools and resources that can be used. It can start with diary studies, ethnographic research and general market trends. Interview as many customers as you can. Do a survey when they log into Internet Banking. Look as deep as you can into your existing data sets. Can you identify customers transacting twice a week from overseas? Can you see parents who get child benefit payments? During the process of gathering this insight you will be forced to connect with a broader set of your customers than ever before. You will also be forced to establish new processes and communications channels to power your thirst for knowledge.

Ultimately, the future success of your bank is intrinsically linked to your knowledge of your customer base. Quality customer service starts with knowing who your customers are, not what they want. A one size fits all model will no longer work and you further risk financial services start-ups stealing your customers from around the edges. Take the advice Guy de Maupassant took. Can you describe the key differences in your customer base? If you can, then the innovation should come. If you can’t, I would start hitting the streets straight away.