Forward-thinking financial services organizations are increasingly using sophisticated tools to upgrade the end customer experience at various points in the customer journey.
Banks and insurers have focused most often on lifecycle touchpoints such as new customer acquisition, account remediation, and promoting add-on products and services.
In order to capture the full business value of their efforts, financial services firms need to take a more holistic view of transformation. They need to ensure that they are covering the entire customer lifecycle, and that the effort encompasses the entire organization. Only then can they become truly connected, agile, and resilient.
We often see two key errors that need to be addressed in order to move forward and make dynamic decisioning and analytics the force for change that can drive true organizational excellence.
Incremental Improvements to Old-School Decisioning
Customer decisioning has evolved but not made quantum advances for several decades, relying on a mix of credit scoring, other analytical and statistical methodologies, and proprietary algorithms.
Insurers and banks are tempted to incrementally adjust or tweak these standardized methodologies, in the hopes of gaining significant improvements with minimal investment. In the end, though, they all fall far short of the personalization and timely offer-making capabilities that consumers have come to expect from other modern businesses, such as online retail.
Segmenting the Customer Lifecycle
When many insurers and banks first moved beyond the practices prevalent in the late 20th century, they typically chose a portion of the consumer lifecycle that they deemed to be of the highest strategic value.
For example, an insurer focused on consumer acquisition may choose to automate the rating and pricing functions first. Banks focused on cleaning up their loan portfolios may implement analytics in account monitoring and collections.
These moves represent positive first steps toward improving internal operations and consumer engagement.
However, these efforts often become mired in difficulties with unruly, siloed data and disconnected operations. Different functions across the organization may be at odds about priorities, such as what portion of the consumer lifecycle deserves the most attention first.
By focusing efforts on discrete events or phases in the customer lifecycle, financial services organizations are not capturing the full potential of consumer engagement, and are not providing the holistic, connected experience consumers expect. In fact, by segmenting the customer lifecycle, they often perpetuate the disconnected consumer experience they set out to improve.
Related: Advanced Analytics for Insurance and Banks
