I asked my colleague Danelle Faust—who leads our financial services business within Accenture Song across the Midwest—to be my co-author again. She’s the perfect person to help explore what middle market banks need to do to respond to the most complex consumer behaviors we’ve seen in years.
Middle market banks take pride in truly knowing their customers. Branches are part of the fabric of local communities, and employees build meaningful relationships with customers so they know what products and services are most relevant to them. There’s no other dynamic like it in banking.
Yet as strong as this relationship dynamic is—and as much as it has differentiated middle market banks for years—it’s not enough anymore. National banks are making massive investments in data, analytics and digital tools, and catching up on customer intimacy. Fast.
So fast, and so out of our control
At the same time, building customer relationships in banking is more complex than it has been before. New Accenture Song research reveals a disconnect between what people say they want and what companies, including banks, think they want. It’s a crisis of relevance rooted in changing consumer behaviors.
So much is changing so fast outside of consumers’ control—from inflation and rising interest rates to the energy and climate crises. In fact, 72% say external factors are impacting their lives more than ever. People are having to make trade-offs between wants and needs, and their decisions are often contradictory. This is the human paradox. We’ve all been here, haven’t we? Who hasn’t stopped for fast food on their way home from the gym or splurged on a credit card purchase while trying to save money for home improvement?
When needs shift moment to moment
Responding to the human paradox takes more than customer-centricity. For middle market banks, customer-centricity is old news anyway. It worked when customers stood still, and life seemed less uncertain. What’s needed now is life-centricity—serving customers as multi-dimensional people with shifting needs. While middle market banks have a head start on becoming truly life-centric, there’s more that they can do and must do. Here’s what we recommend as a starting point:
- Focus on people first, not products. When customers come into a branch, go online or call a contact center, interactions should be all about who they are and what they need, not what products banks want to sell. Rigid product mindsets simply have to disappear. Think of it like this. The “product” banks are selling today isn’t a checking account or a mortgage. It’s “how people pay their bills” or “how people purchase a new home.” The more that banks know about customers’ lives, the more they can truly serve them holistically. They can see the connections between (and consequences of) things like changes in employment or shifts in spending patterns, solving across them and adapting fast even if customers’ needs change unexpectedly.
- Activate data from one-on-one interactions. One of the challenges we see in middle market banks is that while an individual teller or advisor might have a 360-degree view of a customer, no other bank employee knows the information. So, it’s key for middle market banks to share customer insights from casual conversations and one-to-one interactions so the best customer insight doesn’t just sit in someone’s head. Instead, customer insight should be available across the branch network, call centers and service centers. This requires customer relationship management, master data management and cloud investments to mine data to understand customers and activate a “voice of customer” program.
- Simplify to be more relevant. Middle market banks have limited resources and make trade-offs themselves when it comes to the products and services they make available to customers. The more insights that banks have about these customers, the more they can simplify and tailor these offerings through a finely-tuned, life-centric lens. They can use their size to their advantage and simplify ways of working across marketing, sales and service to organize around customers instead of functional silos. By simplifying from within, middle market banks can simplify experiences.
There are some examples of larger banks that are taking these actions, and their stories are instructive for middle market banks. For instance, one bank centered its operating model transformation on “human data” in order to act on customer insights across all digital touchpoints and improve digital sales. The key was identifying “users” as humans, not patterns, by assessing a mix of first-, second- and third-party data. These insights are giving the bank its first-ever complete view of the customer journey and transforming relationships in the process.
A valued relationship
The more life-centric that middle market banks become, the more they can enhance customer relationships. That’s a win for banks and a win for customers. What’s especially powerful about life-centricity is that it’s adaptable by nature. It’s built for change. So while instability won’t magically disappear, middle market banks can be a valued resource for customers no matter what life brings.
This blog is a the first of a two-part series on how banks can adapt to changing consumer behaviors and expectations. Next, we’ll explore more specific strategies for doing that.
Learn more on “How middle market banks can play to win.”
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