4 Ways Customer Centric Banks Should Respond to Recent Market Events

A lot of digital ink has been spilled in the last two weeks expounding, discussing, and analyzing the steps that lead to the unraveling of Silicon Valley Bank and Signature Bank .? The bankers I know have spent many a long day (and sleepless night) examining their own balance sheets & risk practices to ensure they have the liquidity to respond as these events continue to play-out.

With the dust beginning to settle from these bank failures, I’ve steered conversations with my clients and network toward what other steps banks should take to ensure they are well prepared to respond during this crisis and beyond. In addition to increasing bank resiliency - from the balance sheet to the tech stack, banks should be responding by investing in mining their first-party customer data and delivering a superior experience at scale.

What shocked me most was the speed of the sequence of events that led to SVB’s collapse. Looking back at the TickTock of events that culminated with regulators shuttering the bank on March 10th, the flashpoint - when the well-capitalized and highly regarded bank sought to raise funds - took place a mere 48 hours earlier.? In contrast, the last major bank failure, IndyBank in 2009, took about 8 months.?

The rapid pace of the proliferation of news and opinions about SVB’s liquidity, coupled with the ability for customers to instantaneously request their funds be transferred to another institution, left the bank with a narrow window to identify depositors most at risk to leave and reach out to share why they should stick with the bank. Taking a proactive stance to address customer concerns in a crisis may be the difference between surviving or being shut-down.?

Use data such as relationship strength, transaction patterns, and wallet share to identify your customers that are most likely to move.

The first step is to identify who should be at the front of the line for outreach. Now is the time to examine your customer base for customers who are giving signals they might leave. When doing this analysis don't only think of the immediate effect, but also the possible reverberations of losing other bank depositors in your customer’s networks. At SVB, the VC leaders were basically über-COIs. Much of the speed of the run on deposits can be attributed to the network effect.

Determine who are the big influencers among your bank’s depositor base. Start with looking at who has referred in a lot of business and might exert similar influence when your other customers are considering leaving?

Then, create a plan to reach out and reinforce your institution's strength.

Develop systems to create and deliver personalized communications to your customers at scale.?

One of my favorite responses to customer uncertainty and anxiety after this month’s bank failures was from VeraBank ’s CEO Brad Tidwell . In order to spur confidence in his institution, Brad shared his personal cellphone number to each of the bank’s 70,000 depositors - several dozen took him up on the offer to discuss the bank’s position and hear from him that their money was safe.?

In times of uncertainty, customers want to hear what is going on and that they are going to be ok. Giving out the personal cell phone of your bank’s senior leaders is a powerful way to send that message. But does it scale?

How do you build trust and communicate the right message to your customers when that number tops 250,000 or one million or ten million?

Delivering the right communications in times of crisis requires prioritization and personalization. At IBM , we have leveraged Salesforce ’s #DataCloud to bring all our client's customer data together in real-time to create customer segments-of-one which can then each receive the right message in the right channel - all at scale.?

Evaluate and improve digital account opening, including retargeting, to provide potential new depositors an easy path to transition.?

Customers who make the decision to change their banking relationship want to make that process as quick and painless as possible. How does your digital account opening solution stack up?? A good benchmark is? for new customers to be able to complete an end-to-end digital retail deposit account opening process, including funding, entirely on a mobile device in under three minutes.?

Does getting there sound daunting?? It doesn't have to be.??

At IBM, we have developed a Digital Account Opening framework that we can use to benchmark our client’s current process and uncover opportunities to improve both efficiency and experience while maintaining appropriate risk and compliance controls.?

There are several pre-built solutions with predefined business process templates, integrations, and automations which reduce the time it takes to implement. We also have developed an end-to-end account opening process entirely on Salesforce using Financial Services Cloud, Omnistudio, and Experience Cloud that enables our clients to implement a digital banking platform that lets them rapidly develop, introduce, and iterate on new and innovative baking products.

Enhance your client onboarding to include individually tailored outreach and checks for new customer activity and engagement.

The average American keeps the same primary checking account for 17 years. Now that they have chosen to move their business to your bank and have navigated your account opening process, you have only done half the job.?

20% - 40% of new accounts are abandoned in the first year; why are your customers ghosting you??

Think of all the steps your customers need to take after picking your bank: switching direct deposit, setting up bill-pays, and updating recurring debit card payments. What is the experience you have created for your customers to make these steps easier?? Does it feel like work?

According to BAI research, 75% of cross-selling takes place in the first few months of new customer acquisition. Unfortunately this is the timeframe when loyalty can be at its lowest as customers are working through a confusing and time consuming process.?

Do you want to turn this around?? One successful approach is to build an intuitive guided onboarding process with Salesforce Omnistudio using MuleSoft to integrate to middle and back office systems, eliminating manual steps.

Personalization in your customer onboarding communications is also key.? You don’t want to deliver the same messages to a net new customer as you would a five-year customer who just opened an additional account.? Nor would you want to deliver the same message to a 55 year old customer who is moving a portfolio of business to your bank as you would a college student opening their first account.?

Salesforce’s Data Cloud lets you create a ‘digital twin’ of your customers. Bringing together all your data points in real time to create a robust profile that can be used to target the exact right message every time.?

********************************************

? Reach out if you’d like to talk about how we can help your bank respond to recent market events with a customer centric approach

? Follow me to stay current on the banking industry, #Salesforce, and other cool tech trends