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A bank in New Zealand allows customers to park their savings in customized buckets named after goals, such as a “Machu Pichu”, “Prada Bag” or “Rainy Day”. In the United States, USAA provides not just housing loans, but also third-party assistance to help military families find homes and related services catering to their unique needs.

These are examples of banks that are beginning to view their relationship with customers from the latter’s point of view. Customers rarely view banking as an end in itself; to them it is a means that serves a larger purpose, a process embedded within daily activities or life events. The bank is simply a transit point for customers on different journeys.

Mapping the customer journey is therefore an essential (and rewarding) part of experience transformation. Recent research shows that 85 percent of those who practice it have experienced a positive or very positive impact. Benefits include higher customer satisfaction, fewer customer complaints and lower churn. New-age organizations, and especially big-tech firms like Google, Amazon and Apple, are living examples of businesses that owe much of their success to their beautiful customer journeys. Banks seeking to reimagine their journeys and customer experiences to big-tech standards should look at doing the following:

Given that banks are awash in information today, it is very important to identify the data sets of relevance.

Do more with data: Most banks already use their data to personalize the customer journey by customer segment. (For instance, a high net worth customer is ushered quickly past the queue to the branch manager). The next step is to personalize the journey (or communication or experience) to the individual customer, much like Netflix or Amazon does through targeted recommendations. Once a bank is past this stage, it can look at exploiting data further for things such as improving its pricing model. Here, the dynamic pricing model of companies such as Uber could provide food for thought.

A word of caution. Given that banks are awash in information today, it is very important to identify the data sets of relevance. For instance, Amazon’s personalization engine considers a customer’s purchase history, reviewed products, and other purchases made by buyers who bought the same item as this customer, ahead of other information. In the case of a retail bank, point of sale data or purchases made by customers who behave the same way, enjoy a similar lifestyle or are at the same life-stage must inform customer journey personalization.

Think tech: A bank might have the right ideas and data for improving the customer journey but the wrong technology could let it down. It must therefore choose its platform judiciously – in terms of technology, scalability, reliability and support – and also employ the right algorithms. Spanish bank BBVA is doing it right with an algorithm that uses a customer’s product portfolio, geographic location and other factors to personalize in-app experiences.

Chinese insurer, Ping An, has gone a step ahead to recast itself as a technology company with a license to conduct a financial service business. It is using technology to insert its presence into customers’ everyday journeys.

A better approach is to think about technology the way the best technology companies do – as something that is embedded within every process, application, innovation, idea or customer journey. It is not enough to merely onboard the best-known customer journey mapping vendor or use the most suitable digital banking solution; the bank must think about its impact and integration with surrounding processes and applications.

Chinese insurer, Ping An, has gone a step ahead to recast itself as a technology company with a license to conduct a financial service business. It is using technology to insert its presence into customers’ everyday journeys. Whether it is a quest for better health, better transport, or even better entertainment, Ping An has a platform business and ecosystem connections (and of course an insurance product!) to facilitate the journey.

Journey by design: Onboarding, transaction, service and resolution are all parts of banking journeys. However, customers view banking as a part of the broader life journeys they take to fulfill various needs. Banks must reciprocate that thinking by participating in these larger journeys by being present right from the time the customer acts on a primary need (need for wellness rather than medical insurance; need for vacation rather than travel card etc.). Banks like DBS are already doing this by setting up a marketplace platform for buying and selling pre-owned cars.

As is clear from above, primary needs and significant life-stage events – marriage, parenthood, home buying – make for the most obvious customer journeys. However, by employing techniques, such as Design Thinking, a bank can become more empathetic to customers and discover new journeys. The presence of ecosystem partnerships is key to this, of course, but so is a well-timed intervention.

For instance, when a bank is already facilitating a customer’s house purchase through partnerships, it can initiate more journeys with recommendations for legal services, packers and movers, utility companies and interior decorators at the precise time they are needed.

Reimagining a customer journey is not a one-time activity. It calls for constant innovation and several iterations. When there are competing ideas, it is wise to test them in parallel (using A/B testing etc.) before choosing one. Amazon is one example of a company that tests its shopping experience processes constantly to eliminate friction.

Open up to opportunities: The move towards open banking is forcing the universal bank – one that manufactures, owns and distributes products and services through its own channels – to adopt a platform business model where it sources, aggregates and distributes a variety of financial and non-financial offerings using a network of partners from an ecosystem that it might even help to build.

Banks must embrace this trend by working with partners to innovate and expand their range of offerings, and by leveraging those tie-ups to expand, fulfill and enhance their customers’ life journeys.

The last word

As the customer journey becomes more crucial in the banking relationship, non-banking players, especially bigtech companies and FinTech challengers, might seem to have an edge. But while these new-age entities may have mastered the customer journey, banking incumbents must draw comfort from their own inherent strengths, including but not limited to, vast financial resources, loyal user base, expertise in regulatory compliance, reputation, and customer trust. By reimagining their customer journeys, banks can mitigate both friction in customer experience and the advantage of their young rivals to reclaim their supremacy in the market.

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