Aligning front, middle, back office more important than number of banking channels

For the last two decades, banks have been extending their services to new channels, devices and touchpoints. The result: a 1,000% increase in the number of customer touchpoints. As customer interactions increase, bank executives tend to see revenue decrease due to the number of channels required for service. Under this scenario, the promise of reducing channel costs by adding digital services has not generally been realised.

To compete more effectively, capture the inherent value in digital channels, and reduce the cost-to-serve of traditional channels, banks could adapt by attempting to remove organisational silos and aim to align the entire organisation around the customer.

This goes far beyond front-office and customer-facing functions. It involves aligning six key stakeholder groups: customers; employees; partners; and alliances; front, middle, and back-office functions; and the broader digital ecosystem.

To align the front, middle and back office around the established customer agenda can be an enormous challenge without a properly structured and orchestrated approach. It starts with understanding the organisation’s most important customers and then building the business around them.

That means aligning core operations, policy administration, claims management, financial management and other back-office and support functions with the aim of creating the best experience for those customers.

The need for customer centricity is now being felt across the C-suite. KPMG International’s 2019 Survey of global CEOs in the banking sector found that less than half believe they are achieving ROI from their investment in customer experience. In a separate survey of more than 3,000 global CIOs and other IT executives conducted by KPMG and Harvey Nash in 2018, 55% cited enhancing customer experience as a top business priority.

Generally successful organisations are those that put their customers at the heart of their strategy, planning and execution and continually ask what does this mean to my customers, what is the impact on my customers and how will my customers respond

They are insight driven: these companies know their customers at a profound level; they know their physical and their psychological needs and, consequently, they are able to craft market-leading propositions. They are continually listening to customer feedback in real time and creating experiences that are inspirational and motivational.

They practice customer foresight to anticipate customer needs: generally, many are organised around the customer, with test and learn being a way of life. They are organised to respond quickly and to execute efficiently and effectively, so that in many cases they meet the need just as the customer realises they have one.

Banks should therefore strive to become distinguishable by the degree to which their customer experience efforts are integrated and connected. The boundaries between their front and back offices are blurring and they are intimately close to their customers and driven to innovate by the insights they gain.

Customer-centric corporates today are structuring their businesses in new and exciting ways. They are seeing customer experience as a source of commercial value; not just a differentiator versus competition.

Key takeaways

• Banks could adapt by removing silos to align the entire organisation around the customer.
• This goes far beyond front-office and customer-facing functions. It involves aligning six key stakeholder groups.
• To align front, middle, back office around customer agenda can be an enormous challenge.
• Successful organisations are those that put customers at the heart of their strategy.

By Farhan Syed, Partner, Head of Advisory, KPMG Lower Gulf.