Challenges in Banking Customer Lifecycle and How to Overcome Them

Banking has always been about carrying out the primary functions of accepting deposits and processing loans. The digitisation of banking has made banks go through many changes. Modern-day banking must be more customer-centric and provide various services to ensure customer satisfaction.

Your customer's journey, from choosing your services to becoming your loyal customer, is known as the customer lifecycle. It is important to stay informed about your customers to avoid them switching to another service provider. This might not be an easy task. However, this blog will help you tackle all the challenges to ensure effective customer lifecycle management.

Understanding the Customer Lifecycle Management

Understanding customer lifecycle management is a necessity these days. The customer life cycle helps you to acknowledge the needs of your consumers. Not only should you be providing basic banking services to your customers, but there also should be a relationship built to last.

According to the World Retail Banking Report 2022^[1], banks struggle to onboard and retain their customers. 82% struggle to identify new customer segments, while 55% struggle to provide a seamless onboarding experience.

Let us see why these challenges prevail.

• Customer service is key to preventing customers from switching banks. Many customers tend to change their service providers after a bad experience.

• Unresolved queries may also be another factor in making the customers move away.

• Customers hate to be in a queue, and the long wait time for customer service will also make them think about searching for a new service provider.

• Often, poor internet servers are a reason behind failures in providing proper customer service.

• Difficulty communicating new plans with customers will tend to create a gap between banks and their clients.

Tackling the Challenges of Customer Lifecycle

It is difficult to be ready with all the solutions before the problem arises. But there, indeed, are some ways to tackle the challenges mentioned above.

Know Your Customer

Banking companies should be well equipped with all the information about their customers. It is necessary to keep track of your customers. Following KYC procedures and maintaining your customers' records should be a priority. With these records, you can directly communicate your upcoming services with your existing consumers. KYC is an excellent way to keep a record of your customers. These records can be used to craft a strategy according to customers' needs. KYC records will let the banks know about the demography of their customers to decide which plans shall work with which group of clients. It will also allow you to determine what client base needs more focus.

Provide Better Customer Service

It is well-known that customer service is the key to retaining customers nowadays. A good service-providing enterprise will automatically have the best customer turnaround. It is not just about attaining sales and onboarding customers; making them your loyal customers is necessary. Providing better customer service will help you tackle the situation of customers switching their service provider. It will ensure a satisfied customer base, invoking a good word among their peers.

Resolve Queries Instantly

Customers like it when their queries are taken up immediately. Providing an instant resolution to your consumer queries is a must. Queries can be of any sort, ranging from balance enquiries to bank statements and loan applications to card queries. Digitised banking is a roadblock for some customers. The consumers might turn to other banks to try to resolve the problem.

Minimise the Waiting Time

Most banks rely on third-party customer relations services. These might take time due to their negligence. Banks should opt for new technology to speed up the process. Conversational AI, like a chatbot, is a better way to communicate with customers and resolve their problems immediately, thus minimizing the turnaround time.

Developing User-Friendly Apps

The most used device nowadays is the smartphone. People are used to getting things done using a smartphone app. Investing in easy-to-use mobile applications is necessary to deliver customers a good quality user experience. Making the app bug-free and updating it from time to time is necessary to maintain the customer lifecycle. A better customer experience is ensured if you implement designs from a professional UI or UX designer.

Personalisation

Every individual has different preferences and needs from their banks. To address these needs, banks must provide a personalised experience to other customers. Banks cater to people of various age ranges, and every person is looking for something according to their needs. The banking experience should be optimised to meet their needs. This is where personalisation plays an important role.

Applying the above methods shall help you tackle the challenges related to the customer lifecycle. It will open new opportunities for banking and other financial institutions.

Opportunities in Customer Lifecycle

The growth of banking companies depends upon customer satisfaction. Keeping your customers content with the services that banks provide has become necessary. Customer satisfaction helps banks retain their customers, making them loyal to the brand. Let us see what opportunities open up when the customer lifecycle is taken care of.

Globalisation

Banks and Financial Institutions (FIs) tend to grow more in a global environment. Customers worldwide shall opt for you if your services are more helpful. Banks should focus on providing services with ease rather than putting hurdles. A global approach will help the banks and FIs to spread their channels across borders.

No Threats of New Entrants

Established bankers face many issues in maintaining their customer base. New banks and FIs enter with all the necessary tools to tackle every situation. The existing institutions must implement a diversified strategy to encounter customer acquisition and retention problems. A strategic approach towards proper CLM shall help the existing banks gain an edge over the new entrants.

Better Customer Knowledge

A thorough KYC is key to achieving a customer-centric approach. Knowing your customers will help you understand the diversity in your consumer base. Once your consumer base is known, strategies can be implemented to cater to the specific needs of those customers. It is also helpful in knowing which sector to target the most. For instance, understanding the age range of your customers will help you adjust to the technical difficulties on your platform.

Easy for Compliance

Banking companies and FIs must undergo stringent compliance procedures with the authority. Increasing a more digitised system will help them easily cover all the processes. Digitised banking has ensured less paperwork for the banks and increased productivity.

Customer Satisfaction

A customer-centric approach of a banking company will result in customer satisfaction. Providing better services and quick responses to consumer queries maximises the onboarding of new clients. Word of mouth can only be created if the customers are satisfied.

Conclusion

There can be a lot of challenges in implementing a sound CLM system, but it can be achieved. You can implement the best CLM strategy with the right approach, from knowing your customers to understanding what will be provided.

Customer satisfaction is the key to a good customer lifecycle. A proper customer-centric approach is all that is needed. Gauge your customer demography and strive to implement a personalisation strategy for them.

You can consult industry experts like GrowthJockey as solution providers in these cases. GrowthJockey excels in providing automation and digital transformation services to the Banking and Fintech industry. The experts understand the potential of AI and can help you with AI-driven technologies to reshape your brand.

FAQs

1. How do we retain the existing customer base?

Having a proper KYC policy will help you know your customer base. Implement strategies that shall be useful for your customers according to the demography. Communicate with your customers from time to time.

2. Is customer satisfaction necessary in the banking sector?

Yes, modern-day banking is all about onboarding and retaining your customers. It is necessary to stay in business in the long run. Banks tend to provide various facilities to their customers to keep up with the increasing competition.

3. How do you build a digitised platform for banking?

Engaging with various third parties to develop a system that will digitise the entire banking process is necessary. Digital banking helps bring the bank to the fingertips of the clients. It ensures a hassle-free banking experience.

4. How can we decrease the response time regarding customer queries?

Conversational AI, like chatbots, is one of the best options to ensure a quick response to customer queries. Customers feel satisfied if their queries are listened to and taken care of immediately.

5. What challenges do banks face while implementing a customer lifecycle management system?

Banks often go through turmoil while handling regular finances along with digital innovations. Back, mid, and front-end offices are created to look at various tasks. It becomes a challenge to take everything at once.

1. World Retail Banking Report 2022 - Link ↑