http://www.infosys.com/finacle Winning customers is only half the battle won,the task is not only to win the customer but also to keep them for lifetime, this is achieved by gaining their loyalty Customers are more likely to be loyal in a customer oriented climate, one in which products are designed to satisfy their genuine needs. This applies even more to high-value customers requiring personalized services. Recognizing their likes and dislikes and catering to their requirements will go a long way in retaining them

1. Winning and Keeping Customers’ Trust
Universal Banking Solution System Integration Consulting Business Process Outsourcing

2. IT'S SOMETHING that makes a serious is more important than getting new ones. An
difference to building and maintaining customer equally compelling argument in support of
relationships. It is part of every organization’s this statement is the fact that the cost of
priority list. It’s the glue without which any retaining a customer is only one-tenth that of
relationship would fall apart. acquiring a new one.
We’re talking about trust, the bedrock of all From the above, it seems self evident that banks
relationships, especially those involving money. should try to satisfy their customers. Satisfied
customers usually stay longer and buy more; they
Different organizations have taken different tell other people about their experiences; and
approaches to building trust. Some have they may well pay a premium for the reassurance
intensified their customer focus, taking greater of doing business with a bank they trust.
care to see things from their customers’
perspective, understand their needs, and work Therefore, besides launching innovative measures
in partnership with them. Others have improved to acquire new customers, banks must direct
communication by developing practical skills their efforts at retaining existing customers and
such as listening, probing, summarizing, and reclaiming those that have gone away.
rapport building.
Winning Customers
Historically, banks have thrived on the implicit
Although banks do recognize the importance of
trust of their customers. That changed dramatically
winning loyal customers, they find it difficult to
in the recent financial crisis. A recent report
earn their trust, which takes deep understanding
confirmed what we already knew - that despite
of customer needs and attitudes. There are four
banks’ attempts at building public confidence, it
pivotal steps that banks can take to address
was at a low, particularly in those countries that
customer-related challenges and channelize their
had been most impacted by the economic crisis.
efforts to garner customer trust:
Specifically, the report highlighted that:
1. Assess customers’ perception of the bank
• Globally, 44% of customers felt less confident
and set a plan of action
about the banking industry in 2010
• Within Europe, the UK (63%), Germany Banks must act quickly to understand the
(61%) and Spain (58%) saw the largest fall reasons behind customer churn and
in customer confidence demonstrate their ability to recognize
changing behaviors and meet new needs.
• Globally, 36% of customers had changed their By developing a more accurate picture of
main bank, and 7% were planning to do so various customer relationships, banks can
determine those most at risk and accordingly
• Indian and Chinese customers were
align retention strategies to those “priority”
most likely to switch, with 11% and 13%
segments. This is possible through various
respectively, declaring their intention to do so
statistical modeling tools, which perform
This leads us to ask an obvious question, namely, predictive analysis to indicate which
what can banks do to rebuild customer trust? customers are likely to attrite and why, and
suggest possible strategies for retaining them.
Customer Satisfaction
Customers’ attitudes are not static. The
Few things are more important than the customer relationship lifecycle is punctuated
customer, to any industry. The business of by “moments of truth” when customers may
banking cannot function without customers, nor change their attitudes or behaviors on
can it sustain without constantly acquiring more. account of a shifting context or need. Banks
However, because a long-term banker-customer must set up a proactive Customer Relationship
relationship evolves over many years and many Management System to capture such
transactions, keeping existing customers happy opportunities when they arise.
Winning and Keeping Customers’ Trust

3. 2. Identify priority customer needs and mobilize it is the branches that nurture it. Therefore, it
to meet them is important to bring the human touch even to
electronic channels, by providing a facility to
Once a bank has developed a stronger connect customers to relationship managers
understanding of their customers, it can over video calls or soft phones, and improving
respond to their changed needs with innovative service by responding quickly over email to
measures, such as product and service customer queries and complaints.
solutions or pricing and marketing campaigns,
coordinated across the organization. 4. Establish ways to measure and monitor
customer satisfaction metrics.
A proactive move by banks to offer
products based on customer need awakens Banks should continuously monitor customer
trust as customers acknowledge these satisfaction metrics to gauge whether
efforts. Intuitive, relevant and compelling their action plan is achieving its intended
offers can not only boost the loyalty of result in terms of improved trust and
existing customers, but also increase the customer satisfaction.
effectiveness of marketing activities targeted
at prospective ones. To ensure that new customer initiatives
achieve the desired effect, banks must
Two factors are crucial to the creation of implement comparable metrics to track other
the most profitable offerings. The first is the key parameters, such as customer attrition,
enablement of customer-facing sales and revenue velocity and revenue volume. When
service representatives such that they can a bank invests in a more customer-centric
identify customer needs and attitudes. The approach, it needs to know which elements
second is the provision of sophisticated of customer experience are making the
pricing tools. Advanced pricing capabilities greatest impact on loyalty, satisfaction,
can help banks steer clear of simplistic and profitability and growth. As it implements
costly incentives, such as fee discounts and improved metrics, the bank must determine
waivers, reduced lending interest rates or whether to use them at the individual
higher deposit rates. customer level or the broader segment
level — a decision that largely hinges on
3. Execute across the right channel mix its resources and competitive situation. It
must then decide how frequently to measure
Banks must focus on delivering their results — for example, quarterly or monthly —
innovative solutions through the right mix and to what degree of detail. By doing so, it
of channels – targeting the right offering to can alter course quickly in response to rapid
the right customer over the right channel – changes in market conditions, segments or
to maximize customer convenience and customer demands.
improve their own profitability. For some
customers, the branch will always be the Customer Loyalty
primary banking channel; however, the
proportion of consumers who prefer the Winning customers is only half the battle won,
Internet for most interactions is growing. By the task is not only to win the customer but also
understanding how each person wants to to keep them for lifetime, this is achieved by
transact, and tailoring interactions accordingly, gaining their loyalty Customers are more likely
banks can not only strengthen customer to be loyal in a customer oriented climate, one in
loyalty and trust but also reduce product and which products are designed to satisfy their
service delivery costs. genuine needs. This applies even more to
high-value customers requiring personalized
That being said, banks must realize that services. Recognizing their likes and dislikes
the human element is the key to winning and catering to their requirements will go a long
customer trust; in most countries, even today, way in retaining them.
Winning and Keeping Customers’ Trust

4. Customer acquisition is a costly exercise that retain customer goodwill. Service recovery effort
can turn highly unprofitable when not integrated plays a crucial role in achieving or restoring
with Retention Marketing. Retention marketing customer satisfaction. In every organization,
ensures that the bank generates profit from certain events may negatively impact customer
existing customers while keeping them happy. relationship. A bank’s commitment to satisfaction
Some of the major benefits of customer retention and service quality is reflected in the way it
include greater customer predictability and insight responds when things go wrong for customers.
which allows the bank to target their offers better Effective service recovery requires thoughtful
and increases customers’ trust in them. procedures for resolving problems and handling
disgruntled customers. It is critical for banks to
Keeping Customers have effective recovery strategies, as even a
single service problem can destroy customers’
To retain more customers and gain their loyalty, confidence in them. In case of service failure, they
banks should do the following: may have to apologize, repeat the service to
achieve the desired solution, or offer some other
1. Begin to track customer retention as a
form of compensation to retain customers.
key performance indicator. The ability to
accurately measure customer retention on What more can be DONE?
a regular basis quantifies its ROI.
The banks should maintain transparency in
2. Get regular context specific feedback from their transaction with customers. For instance, at
their customers on the services consumed. times, banks collect “junk fees” from their
Feedback is all the more important in cases customers in the form of hidden charges, thus
where the bank feels that a particular product making the customer feel cheated. Banks should
or service did not perform well with the avoid any steps that might confuse customers or
customer. Upon receipt of feedback, banks raise doubts about their credibility.
must respond with a thank you letter citing
how they will implement the suggestions. Paying close attention to Compliance and
Risk Management is another way to improve
3. Understand how customer retention rates customer confidence. Banks are now required
vary by vertical to determine which ones are to meet a number of regulatory requirements
not being effectively addressed. More and follow contractual obligations such as
importantly, vertical analysis allows banks TCPC (Tele-marketing and Telephone Consumer
to appropriately allocate resources to their Protection Act), Basel II and the Sarbanes-Oxley
most valuable customers. Act. Basel II requires organizations to collect
and store a minimum of three years’ worth of
It is not possible to attain high levels historical data. The Sarbanes-Oxley legislation
of retention overnight. Institutionalizing (SOX) aims to make companies’ accounting
customer retention as a key means procedures more transparent to investors and
to measuring and improving business regulators. It also requires stricter disclosure
performance takes time and energy. The within company financial statements and sets out
best way is to establish customer retention ethical guidelines to which senior financial
as a goal, define relevant metrics and track officers must adhere.
performance against the same.
This helps banks to collect better information on
What to do when things go WRONG? their customers, improve internal processes and
identify new revenue streams as an extension of
Service recovery is an umbrella term for their strategies for addressing risk, money
systematic efforts by an organization to correct laundering, and fraud, in addition to helping them
a problem following a service failure, in order to garner the trust of their customers.
Winning and Keeping Customers’ Trust

5. References: Performance Of Commercial Banks: Egypt
Case/ HebaSadek, Amr Youssef, Ahmad
1. Justice Oriented Recovery Strategies and Ghoneim, Passent Tantawi,
Customer Retention in The Retail Banking
Industry in Malaysia by Nek Kamal 4. A New Era of Customer Expectation, by Ernst &
YeopYunus/International Review of Business Young Report 2010
Research Papers Vol. 5 No. 5 September
2009 Pp. 212-228 5. Banking On Intelligence/sascom
2. Accenture Banking The Point Customer
Author
Imperative Full Report
Hema Singh
3. Measuring The Effect Of Customer Associate Consultant
Relationship Management (CRM) Infosys Limited
Components On The Non Financial
Winning and Keeping Customers’ Trust