by Craig Hannabus (@crayg) Recent research by the Mercator Advisory Group shows that the average American has 5.3 bank accounts. While the picture is slightly different here (estimates say that around 20% of our population is unbanked), those of us who are banked have signed up to at least three different financial institutions (including store cards).
Many financial institutions are currently in the midst of a very interesting problem. For the longest time, they’ve been unbundling their services, offering them as separate products completely independent of one another. Their various services are spread across multiple apps, websites, call centres, and databases. It’s become quite feasible for someone to have an insurance product with one bank, a credit card with another, a savings account with a third, and a home loan with a fourth.
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The unbundling problem
Unbundling is problematic on several fronts. It would seem that someone using several banks would have a fragmented customer experience. Instead of doing banking in one environment, with one institution, the customer has to roam across several apps and websites. This is true but most customers just don’t care. These customers are quite happy to work across different platforms because of the perceived benefits. They’ve either had poor experiences with their primary bank when applying for a secondary service (such as a home loan or a credit card) or they’ve simply been offered a better deal elsewhere. This creates a rift in data.
Institutions often notice when there’s a gap in their customer’s product sets, and will often campaign to fill those gaps. This may often lead to unwanted communications and phone calls as agents try to sell you products you have elsewhere. These marketing efforts cost money, and are often wasteful.
To counter this unbundling, many banks have made a move to helping customers re-bundle by offering preferential rates, rewards, and services to customers who use more features within that bank.
But what caused this unbundling in the first place? There are several factors at play.
First, most banks (and many large corporates) are internally unbundled. This may even go as far as databases, where getting a single customer view may be almost impossible. Once again, there are people working tirelessly to rectify this problem, which is partly a legacy issue and partly an internal fragmentation issue. Where it hits the customer the most is with comms. Since services have their own teams that don’t communicate with each other, creating a bundled experience for the customer becomes difficult. Many corporates have also introduced the idea of internal competitiveness, making teams compete with each other for financial reward. For the most part, internal competition is seen as a discouragement to cooperation.
It’s assumed that most customers are looking for this unbundled experience. They’re not, though. Once a customer understands the benefits of keeping everything at one financial institution, that becomes their choice. To be clear, unbundling hasn’t been driven by the customer; it’s been driven by corporates and adopted by customers as a new norm.
Fixing all of these problems costs money, it costs time, and it requires fundamental changes in how a business thinks about itself. While I’ve used the examples of massive financial institutions, no business is immune to unbundling and the accompanying defragmentation of customer experience.
Poor communication is the core problem and it’s not just a scourge for large institutions; it may be so for smaller businesses, too. It’s a problem that could very well get worse if the work-from-home (WFH) culture stays as pervasive as it’s been since lockdown started. WFH might seem nice but the old adage “out of sight, out of mind” may come into play. Without constantly seeing your colleagues, will you remember to talk to them?
There are two key ways to improve internal communication:
#1. Establish a protocol
Communication protocols aren’t just for computer networks. Having a good baseline of information-sharing with key decision-makers is vital. While initially this may lead to overshare, as time progresses and communication gets better, the normalisation of sharing practices will also occur.
#2. Accountability (RACI)
Using the RACI model for every project, service, and product can fundamentally change the way the business operates. I won’t unpack RACI here but you can read more about it at this helpful resource.
It’s a brave new world; let’s try not make the same mistakes that we made in the old one.
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Currently the strategic director at Rogerwilco, Craig Hannabus (@crayg) has spent his adult life in the tech and marketing industry, exploring both the development and the content creation aspects. Through the years, he’s developed a strong interest in exploring the world of customer experience and has worked on brands including Standard Bank, Nedbank, General Motors, Nestle, and Caxton.
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