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As pressures mount on UK banks, their focus is shifting towards the acquisition of new customers (and the retention of existing business) by improving customer experience (CX).
81% of bankers believe CX will be a key differentiator in the next four years, according to 2021 research from The Economist Intelligence Unit. Additionally, a wealth of recent research shows how investing in CX benefits commercial banking relationship management and can even double revenue.
A key part of this shift towards a better customer experience ecosystem is recognising that pure technological solutions are not enough when it comes to customer acquisition in the banking sector, especially in the current climate. To truly differentiate their CX and stand out amongst competitors, banks need to improve their digital and human services, and the ways in which they blend the two.
Why it is important to respond to challenging times with better CX
The last three years have brought multiple new stresses on business banking relationship management and customer acquisition models - with the pandemic, inflation, rising interest rates, and recessions leading to more vulnerable clients. These pressures compound the longer-term challenges of increased competition from digital disruptors, rising consumer expectations and increasing regulation.
With higher interest rates, more businesses are struggling with debt and avoiding new borrowing. Net lending is down and corporate insolvencies are spiking, significantly threatening banks’ revenues and profits. In this environment, banks cannot simply wait for the economic downturn to end. Commercial banking firms need to compete even harder and continue to find new ways to optimise their existing relationship management and customer acquisition processes.
Increasing customer acquisition in banking
With the aforementioned challenges in mind, how do banks fine-tune their customer acquisition strategies and onboarding processes?
Digital solutions can streamline the provision of less complex products, such as simple deposit accounts; however, FullCircl’s customers are finding that more complex services, such as business loans, need a blend of technology and humans to improve customer experience, especially when it comes to smarter onboarding.
Smart onboarding
To support smart onboarding, banks need better customer lifecycle intelligence with enriched, super-connected data and insights on companies, updated daily to enhance conversations with clients. They should have a rules-based decision engine to screen and onboard B2B customers in seconds, based on their risk profile, but with the flexibility to make human decisions built in.
Banks also need a holistic view of risk, connecting dots across real-time financial and credit information to identify quality customers. With a mass of instantly accessible information in one place, banks can have a much more detailed picture of each customer’s situation. This supports front-line team members, freeing them to put their
focus even more on delivering superior customer outcomes and frictionless onboarding.
Assessing risk
Superior customer lifecycle intelligence also helps banking institutions build trust with new customers by finding out more about each businesses’ goals and pain points and how they can help. For example, having better initial data about a specific client’s risk can help frontline teams make faster lending decisions but may also show that there are good reasons for a human decision to go outside standard policy and provide a more flexible service. Both will lead to better customer satisfaction scores.
One of FullCircl’s customers, a funding platform, uses the same holistic view to accurately assess its customers’ risk and fine-tune the matching of customers with the right funder. Such risk monitoring helps the funding platform avoid lots of unnecessary manpower and means that they can service customers much better.
Forward-thinking banks are also using data and automated, tailored cost-benefit analyses to look for financially sound customers with few signs of vulnerability. Having that detail available at the earliest opportunity in customer acquisition can help them make better-informed decisions about new clients, saving time and trouble later.
Turning complex banking regulations into opportunity
Many of our commercial banking customers are talking about combining human and digital solutions to support compliance with increasingly onerous regulations. This increased regulation includes the incoming Consumer Duty rules, which set higher consumer protection standards across financial services and require firms to put customers’ needs first. Other examples are anti-money-laundering (AML) and know your customer (KYC) regulations, which have grown increasingly complex.
To respond to this increased workload, banks need to automate tasks that will enable fast, frictionless and automated onboarding during the customer acquisition process. Using enriched information to pre-populate forms and identify Ultimate Beneficial Owners in seconds saves valuable time (and money) and reduces friction.
If your bank can advertise faster onboarding times and better outcomes generally, it will turn compliance into an opportunity - increasing customer satisfaction scores and becoming another important selling point for new customers.
Relationship management of existing commercial banking customers
As we’ve established, it’s not just about new customer acquisition. Many businesses need more help from their banks in times of economic stress, even if they are an established customer. To meet this demand, banks need actionable intelligence at all relevant points of the customer lifecycle, allowing for more structured and valuable communication at each step and helping to improve customer profitability.
Early detection of potential problems
Data insights can provide early warning indicators that an existing customer has financial difficulties; this allows the bank to intervene and potentially help, rather than responding too late. Such early indicators of financial difficulty might include a change in credit risk, extending payment terms with customers, or holding lower cash reserves. Many of these data insights are made possible by open banking technology and application program interfaces (APIs).
Early detection of potential problems
As well as providing banks with the information they need to be able to help their customers, these data insights also allow banking staff to show empathy and build customer trust and confidence, vital components of commercial banking relationship management.
As well as this, increased data insight can help staff offer more positive support, such as identifying when the time is right for the customer to expand, acquire, or exit - and proactively notifying and advising them accordingly.
WTW, a FullCircl customer, uses up-to-the-minute data insights to build a 360° view of each customer, driving best practice sales behaviours, and achieving a 98% adoption rate.
Where other institutions may be relying on static CRM data to keep tabs on their contacts and customers, financial companies using data insight tools can react better to changes within the market, and with the customer individually, in order to offer a better partnership and retain the business.
Customer acquisition and relationship management - How FullCircl can help
FullCircl is a Customer Lifecycle Intelligence platform that helps commercial banks and other B2B companies do better business, faster. It allows front and middle office teams to acquire the right customers, accelerate B2B customer onboarding, and keep them for life.
The open banking APIs on our platform access 270 million connections - the richest and most up-to-date insight available on UK and Irish companies - allowing for highly detailed analysis and insights on potential and existing customers. Our APIs can also push data changes and events directly into customers’ CRM systems to allow an account to be opened almost instantly.
Our platform is used by over 600 customers - including many traditional and challenger banks - to meet increasing customer expectations, navigate the complexities of changing regulation, succeed in customer acquisition, and stay ahead of competition when it comes to client relationship management. View our case studies to see how.
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