While embarking with the Digital Transformation, it is crucial to figure out what business model is at work for financial services companies. Is it based on Operational Excellence, Product Leadership or Customer Intimacy?
These questions are key to understand what is expected by customers when driving the Digital Transformation.
A usual way to segregate business models is displayed below. What do you think financial services companies belong to?
This is a key foundation - all Services companies belong to the “Customer Intimacy” stream. It doesn’t mean that Product offerings and Process streamlining are not important. They are — but when addressing to Services companies, customers expect primarily to be served according to their specific needs.
Why is it so? Financial Services companies propose to take care of a critical element - the customers' financial future. They hold their money, protect their families, prepare their retirement, take care when they'll have health problem. These are both very intimate and emotional needs.
Knowing your customers well and serving them in a personalized way is the essence of Services companies. This includes providing personalized solutions but also interacting with them in a personalized manner.
In step 1 of the Methodology ("Define the Customer Promise"), we'll see how to align this with the Customer Journey we want to deliver.
“Financial Services deal with very intimate and emotional customer needs: the future financial security for them and their family.”
When I ask my banker friends what their company’s business is about, they use to reply “we deliver financing solutions” or “we sell banking and insurance products to selected customers”. Conversely, when I ask customers why they are happy with their bank, they rarely say “they have the best banking products”, they often say “they make my life easier because they know my specific needs” or “they helped me quickly and efficiently last time I got a problem”.
Think about a restaurant you like and the main reason why you go back there with pleasure on a regular basis. It might be because of the food (the product) or because the order-to-delivery turnaround time is very short (the operational excellence). However the key reason is more likely that they welcome you well, they recognize you when you reserve a table or when you enter the restaurant, and they provide you appropriate recommendations on food and drinks — all of that because they know you well.
A famous quote from Howard Schultz, Founder and CEO of Starbucks, highlights the same idea.
