It just got competitive: The retail banking shake-up

Back in July when I wrote a piece on how retail banking customers continue to be underwhelmed, the Competition and Markets Authority were on the verge of suggesting new proposals that would shake-up the industry.

And well, they have done just that. The package of measures set to be imposed over the next two years by the body are based on the findings that older and larger banks do not have to compete hard enough for customers’ business.

The new initiatives will demand transparency, as banks will be required to publish trustworthy and objective information on quality of service not only in their branches but on their websites. This will allow customers to see how their own bank shapes up. Furthermore, a core measure will be whether a personal customer or small business is willing to recommend their bank to friends, family and colleagues.

In terms of how worried banks should be, within the first nine days of the Vickers Accounting Switching Legislation coming into force – which provides consumers with a quicker and simpler way to switch their accounts from one bank to another – over 35,000 consumers switched their current account to a different bank.

In days gone by, this customer infidelity might not have left a scratch on their ego or cast a shadow of doubt on whether a large bank truly understood their customers. However, the world we live in today is very different. Now, customers expect the same level of service from their banks as they do their shops, restaurants and couriers. No longer do customers discriminate, they form their expectations through comparing and contrasting brands – irrespective of the industry. This means the banking customer experience is pitched against the greats of services from the likes of Amazon, Waitrose and John Lewis.

The companies that win in this era of empowered, intelligent customers do so because they create better experiences and better relationships with their customers. If banks are to optimise customer relationships and loyalty in this new environment, they need to integrate processes and technologies that enable them to build − and then act upon − a detailed view of what each customer wants. This all starts with achieving a single view of the customer.

The right Customer Relationship Management technology can provide just that, offering an individualised service based on a 360-degree view of the customer. However, today’s successful companies know that they need to differentiate themselves based on the quality of their customer experience.  But if your customer experience is powered by the same CRM technology as your competitors, how will you be different? To differentiate yourself, businesses need to choose a CRM that will transform customer relationships, re-energize your customer-facing employees, and help you to provide a truly exceptional customer experience.

With the introduction of the new measures meeting customer expectations will require total commitment and focus from businesses.  Having the correct processes and systems in place which separate your businesses from your competitor’s, will put companies in a position to attract and retain customers in this new retail banking world.