“We are living in the age of the empowered customer”
Banks and financial institutions across the different business models, be it universal banking, small to large banks and financial institutions, or shadow banks, are putting increasing amounts of energy and investments towards retaining existing customers and aggressively pursuing new ones. This customer chase is primarily to grow revenues by offering incremental product and services to ‘happy’ customers. It has also become common to see a variety of loyalty programs in the industry that aim at the same goal of engaging ‘happy’ customers – a trend which was relatively uncommon in the industry. The global regulatory requirements on capital adequacy in the banks for risk mitigation on financial stability and investor protection, such as the Basel accords, further made a lot more sense for banks and financial institutions to ensure long-term customer retention that leads to better capital and reserves.
In a broader sense all such customer initiatives and programs with the singular objective of boosting customer loyalty and thereby revenues and reserves, could be termed as customer engagement. While undertaking customer engagement initiatives it is very important to satisfy the following two requirements:
First, the customer engagement strategy should understand the customer expectations. It is to be built on two-way interactions, transparency and using relevant channels. Industry players must remain cognizant of the fact that while it is a necessity for them to hold on to customers, they now have more options than before. In addition, since customer finances are a sensitive and important, the offerings should be open and informative, allowing easy comparisons as to pros and cons. With deep penetration of internet and digital platforms, the customer engagement programs need to empower the customer with easy access to relevant information, anytime, anywhere and virtually free of cost.
Second, the customer engagement strategy should make business sense to the banks and financial institutions themselves as well. It should cost much less than the projected profitability of the resultant incremental revenue. Many customer engagement initiatives in the early days, for instance serving the high net-worth individuals (HNWIs), incurred such high costs that it quickly transpired to be too much of a drag for banks and hence they could not sustain them. One can see such situations occurring globally. Technology came to the rescue here in helping bring such recurring costs down. However, the capital expenditure for technology investment remained high – almost at par with projected business benefits. Therefore, the customer engagement platform can reap most benefits when it leverages what the banks have already invested in and when it builds on economies of scale to realize the same customer engagement objectives, such as revenue maximization and profitability with a much more justifiable investment.
The power of the Investrack Suite
Globacom has been a new generation pioneer in providing cutting-edge platform to help banks and financial institutions jump start with a low risk, robust, scalable and a just right platform with an ability to further build up diverse customer engagement programs, depending on the permitting business priorities of different environments and scales that these banks operate in globally. Helpful predominantly in the investment and portfolio management function, Investrack presents an integrated and seamless solutions suite and prowess to empower banks and financial institutions to build their own customer engagement strategy and programs that enables harnessing the benefits in line with the essence of their strategy baseline.