5 Barriers to Achieving Customer-Centric Transformation in Financial Services

Over the last decade, traditional financial services organisations have taken big strides by investing in modern technology methods, simplifying their operations and product set. They have made good progress in mobile and inter-banking services, and invested significantly in using data and analytics to drive end-user personalisation and cross-selling experiences.

With the closure of many high street branches and physical touchpoints, they have invested in remote customer service technology, data and analytics to enable customers to self-serve and provide seamless experiences. However, the latest CMA Survey on Customer Satisfaction in Banking demonstrated that many financial organisations still fared poorly when it comes to the overall quality of service and experience for end customers.

Over the years many of them have started large-scale digital transformation programmes that have resulted in a few good outcomes for customers and internal stakeholders. Yet many of these transformation programmes achieved limited success in creating a truly customer-centric culture. A few have failed altogether.

The reasons are many, but I believe there are five common and significant barriers to achieving an organisation-wide, customer-centric transformation.

1. C-level vision struggles to become vocabulary

For transformation initiatives to truly be successful, they need to start right at the very top with sponsorship from the CEO and boardroom. The clarity of vision and measurements of success have to align with business strategy and marketplace goals. 

Many initiatives start this way and are set up well. But they achieve limited success because the vision does not become vocabulary on the ground across the employee and talent base. 

Every department, function and team has its own interpretation of how it applies to them and what needs to be done. Without clear articulation from the board, there’s nothing to counter the spread of those individual interpretations. The true intention of the initiative is lost and diluted. And in a hybrid working environment, engaging with the talent base has become even more challenging.

Unless consistent efforts are made to clarify, reinforce, contextualise and simplify C-level vision, transformation initiatives will see limited success. 

Innovative internal communication programmes that ensure the strategy and vision are simplified, understood, internalised and institutionalised across the organisation need to become a corporate priority.

2. Bottom-up transformation initiatives without exec sponsorship 

You’ll often find immense ground-up momentum created by small teams that achieve significant success in their own functional areas. An example of these is ‘tech agility’ initiatives in the CIO organisation. 
A few of them achieve significant improvements in their disciplines, but without a business sponsor and C-suite alignment, they hit a ceiling. Organisational silos and bureaucracy stifle progress and cause frustration, and the momentum peters out. 

3. Innovation or transformation in a bubble 

Often, customer-centric innovation ventures are set up on the periphery of an organisation. These seldom achieve scale. 

‘Innovation in a bubble’ is a common anti-pattern of transformation programmes that attempts to bring about customer-centric change in small pockets without a clear strategy for how these initiatives will become mainstream and create a wider enterprise impact.

4. Missing link between business strategy & execution 

For true transformational success, the execution of initiatives needs to fully align with business strategy.  Many business and commercial leaders do not fully appreciate all aspects of digital and technology, so they can’t engage strategically with each other. That creates a ‘chasm’ that becomes difficult to cross.  KPIs and incentives are often framed on the basis of digital or technological capabilities without linking back to business outcomes.

5. Inability to bring the voice of the customer into the organisation

Perhaps the biggest challenge faced by customer-centric transformation initiatives is their inability in bringing an ‘outside-in’ approach.

Vertical leadership as opposed to "vertical slice" thinking is a common pattern in most financial services organisations.

.In the face of organisational siloes and missing direct interactions with customers, many initiatives make decisions based on customer insights that are not representative of the market and the needs of the real customer.

To bring about real change and unlock real value for customers, transformation initiatives need to directly link back to end users who create real value, not just internal customers. Organisations need to create cross-functional teams that enable direct and frequent interaction with customers. They should have mechanisms to validate and experiment often. They should be empowered to pivot. These are the key enablers for succeeding in customer-centric transformation initiatives.

Achieving your breakthrough

Transformation initiatives in financial services organisations are complex and long-lasting. In order for them to sustain and have an enterprise-wide impact they need organisational buy-in. They need to truly align with business objectives. They need to capture the true voice of the customer.

But there’s one thing more that financial organisations need to galvanise transformation. They need a breakthrough moment – an initial point at which the potential of transformation is seen clearly, even if only in a small way. A breakthrough moment convinces doubters. It builds momentum. It plants a marker for the benefits to come.

Contact Amol Punekar, Technology Executive at AND Digital on Linkedin to discuss further and share your thoughts.

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