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'Emerging tech key to better quality relationships between commercial banks and customers'

Fuseworks Media
Fuseworks Media

In the post-pandemic world, the battle for commercial banking customers will be won by those organisations who unite skilled human relationship managers with the best transformational technology. That’s according to leading multi-national consultancy Accenture.

In its recently published global report, Commercial Banking Top Trends in 2022, Accenture reveals that over 60% of small and medium sized businesses value the personal relationship they have with their banks.

"Our research finds that the role of the relationship manager in commercial banking is becoming even more important despite rapid digitisation of services," said Christopher Jaggard, Managing Director - Commercial Banking, Australia and New Zealand.

"Most notably business owners seek personalised interactions for the most critical, relationship defining moments. This is a key area where commercial banks can benefit from investments in a more digital, insight driven workplace.

"Bankers historically have spent a lot of time performing administrative tasks manually or in limited legacy tools. A digital-first approach removes much of this lower value effort, freeing up more time for bank managers to have better quality relationships with their customers.

"When used most effectively, technology complements high value frontline activity too. Leading financiers are harnessing the ever-increasing richness of data and the power of artificial intelligence to provide more proactive and forward-looking advice (a "crystal ball"). The applications are as broad as they are exciting; including identifying business client growth opportunities and financial challenges, comparison against industry benchmarks, client supply chain review, client customer insights and more."

Mr Jaggard said the pandemic had thrown up a lot of challenges in commercial banks’ relationships with their customers, with New Zealand’s agriculture sector a good example.

"Farmers face difficult financial circumstances arising from their sector. Current record dairy pay-outs provide an opportunity to pay down debt but simultaneously they are dealing with increased costs of fertiliser, feed and wages. Tailored advice, products and services to support critical business decisions are crucial.

"Access to working capital through credit at the right time and at the right rate is imperative for farming operations yet can be easily disrupted. Empowering the relationship manager with insights on the farm’s cashflow, commodity pricing, local benchmarking and supply chain sensitivity helps to elevate any customer interaction to one that truly makes a difference to the way the farm operates.

"The ‘kitchen table conversation’ is still where many farmers prefer to consult on their business. As such, bankers need to be able to share data driven insights on the road. To enable this, these insights need to be delivered in a highly accessible format and seamlessly integrated into the existing work patterns. Commercial banks who put customer experience at their core will aggregate data across multiple external and internal sources and surface into their Customer Relationship Management (CRM) tools.

"Advances in the availability and accessibility of data can provide a simplified, customer centric process for obtaining credit; optimising revenue streams, winning cross-sell business, reducing administrative overhead and maximising the return on CRM investment."

"Ultimately, Accenture believes that firms will be able to better identify customer spoken and unspoken needs if they equip their Relationship Managers (RM) with the right insights, tools, processes, incentives and training.

"We call this the empowered RM: a strategic and insightful advisor who is able to forge differentiated and more profitable relationships which extend far beyond the traditional "product flogging" approach to financial services.

Mr Jaggard said that Accenture’s research found banks that put these insights directly into the CRM tool and other daily-used applications are seeing a 3% to 5% increase in cross-selling but also a 2% to 3% increase in new client acquisition.

Even more encouraging, early adopters of the empowered RM are already seeing significant benefits, with top line revenue growth of 5% to 8%.

"Historically, commercial banks have taken a piecemeal approach to building customer experiences whilst satisfying the many obligations faced by financial institutions. That’s changing now, with leaders in industry adopting a more strategic and transformational approach to win the war for customers and the war for talent. It’s not just about overcoming administrative tasks and leveraging data, it’s about using these initiatives as a catalyst for broader change in the way Relationship Managers operate and add value," Jaggard said.

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