By Manish Grover, Program Director, MindTree Digital Solutions Group

Banking and financial services today are at an inflection point. As consumer interactions and behavior become more integrally connected across industries, it is extremely important for banks to continue evolving their view of the consumers and embed themselves deeper into the entire experience cycle.

One of the primary ways to achieve this vision is via community development and management. This statement implies that we understand and act upon customer and partner perspectives throughout their experience lifecycle and life-stages, taking into consideration both direct and indirect customers. The premise is that effective community development can directly drive key parameters such as acquisitions, account growth, cross selling, and retention. Proposed in this article is a framework that provides actionable insights into a longer term maturity model view of the essential capabilities needed. The focus is to assess and define an ecosystem that will expand the boundaries for relationship management.

Defining "community"

In this context, a community is a coming together of consumers and service providers to satisfy mutual needs. For this article's purposes, a community is not defined as a group characterized by its sharing common values or even collaborating with or helping each other. To do that would be to limit it to a partial dimension. A community is a coming together of people with different motivations. The structure of what we do with the community defines the context of what it is.

It is important to note that an organization as diverse as a financial services organization has not one target segment but many. Indeed, the product, marketing, and service models are numerous as required to serve and satisfy these segments. Further, banking being an integral part of society, and an area that is being addressed by several nontraditional players, must develop a product and services partner ecosystem. Only that will allow the customers to truly interact and engage across their needs spectrum while minimizing the mediums over which they interact.

The key question for the emerging marketplace is: Which banks will retain their traditional customer-facing dominance and which will be relegated to being back-end "essential" service providers?

Creating the community vision and objectives

The social face of the bank can be viewed as a set of core capabilities focused on creating an ecosystem of customers and partners and enabled through a set of supported capabilities including marketing, technology, and operations.

As described above, the ecosystem will be characterized by minimizing external reinforcement, encouraging the users (consumers, customers and partners) to promote the community as a destination for needs definition and solution analysis, and allowing all participants to have a targeted, personalized experience backed by the power of local community connection. Personalization and targeting in the community will be brought about by segmentation based on type (e.g. commercial, personal) and level (e.g. premium) of products held aided by social, regional, and demographic intelligence.

In its simplest form-along an ecosystem maturity curve-the "social face" of the bank can be viewed as a combination of web and mobile toolkits that bring together the most common activities of the consumer. For example, segment A may access their social causes and campaigns at both local and national levels, meet as a group, and review their upcoming travel and holiday purchases, seamlessly monitor their social networks while reviewing their accounts to plan and review their financial goals for education, retirement, or other similar end goals. In such an ecosystem, third parties like health and fitness providers, nonprofits, professional, or family organizations will be connected through a fitment of their product offerings and transactional needs, thus boosting the payments and loyalty verticals of the bank.

How does this help engagement and financial drivers?

First, switching costs, one of the primary methods to increase retention, will raise a notch above common tools such as bill pay. The premise is that as customers work off checklists, computations, wish-lists, and plans within the ecosystem, the threshold to switch is reduced. Of course, the threshold to enter into the ecosystem is similarly high and must be created with care in an incremental fashion.

Second, the partnership, which is based on the customers' trust of the bank for advice, will be enhanced through the arrangement of offerings around customers' needs, backed by the views and opinions of the community itself. In other words, the aim of all but eliminating external reinforcement-the most deadly cause for loss of customer engagement today-will be fulfilled. 

Third, a self-sustaining ecosystem will gradually be built as both individuals and other third parties in the ecosystem will try to maximize their own returns. These are through campaigns, social leadership aspirational ladders, integrated banking and related nonbanking products, and a myriad of other ways limited only by imagination and the sanctity of the ecosystem. A little initial push in the right direction will set this off. 

These are but a few of the characteristics of community development which focus on the goal of putting the bank at the forefront of the channel war, addressing the full spectrum of use cases and needs through a partner ecosystem, thus minimizing the threat of being relegated as a commodity service provider. One may, of course, visit more than one community as banks and partners compete, but the share of wallet will go to the one that wins by keeping the user's (customers, consumers, and partners) needs in the forefront while constantly aligning and positioning its offerings to both expressed as well as latent needs discovered through the community interaction. In other words, once you're in, you're family.

Building the capability support system

The supporting capabilities indicated in the model are based on a common principle-an outside-in view of the business. Starting with the core product offerings and customer transaction, this principle progressively leads to the surrounding use cases, of which many are of equally high priority to the customer once we lose our banking lens and look to regaining the position at the top of the food chain.

How do we support the goal of high and sustained customer engagement-this space has been wrought with difficult to quantify ROI for marketing and operational investments?  The six core supporting pillars are outlined below:

• Cross product integration: Engagement with multiple business lines and product hierarchies is a prerequisite to creating a coherent front to the customer community. Knitting together benefits of bundles and marketing as per needs, instead of individual products, will be the foundational capability. This is more difficult to achieve than it sounds. Stewardship of a holistic balanced scorecard will mean aligning incentives and short-term targets in pursuit of the larger goal as well as organizational initiatives that bring cross-functional expertise together. For example, the simple practice of selling credit cards to banking customers who have debit cards has been an epic internal struggle as the P&L drivers and measurements have remained focused on individual verticals. This cause was helped a little by the recent debit card regulations, but the sources of historical conflict cannot be ignored.

• Multi-channel interaction: With new technology and communication paradigms developing every day, the applicability is not limited to mobile/web or to popular sites like Facebook alone. The desire of people to contribute to society and form communities is forcing firms to rethink their own platforms. In fact, the new social face of a banking firm may well be a platform by itself within the larger ecosystem. A bank's web and mobile presence will have to maintain live connections to the customers' loyalty platforms, online retailers, travel agencies, social campaigns, daily deal sites, and, of course, Facebook, Twitter and Pinterest. This paradigm is way beyond the "log in and check your account" positioning of today. Further, integration of promotions and offerings will mature across not only traditional channels such as mobile, paper, email, phone, and web, but also across customer touch points such as travel, shopping, and entertainment.

• Partner management: A thriving ecosystem will be successful if it is backed by the partners that can meet broad-based customer goals which in turn align with the bank's goals of higher spend and balances, multiple accounts, and redemption of higher margin rewards. As the battle for channel ownership wages, the right level of partner offerings that make a seamless user experience possible will be important. For example big-ticket spending such as travel, as well as high frequency and reliable spending on everyday items; both will be supported by their own segments and type of partner ecosystems. There is a need to move beyond the traditional affiliate programs and create deeper engagement based on context awareness and transparency.

• Content management: A self-sustaining community still needs the right direction and curation from time to time, perhaps more frequently in the initial stages. As the community evolves, the content will mature to a co-creation model based on user-generated themes and needs. In either case, a strong governance support structure to publish, respond, and react to user opinions will have to be set up. This will also provide unique opportunities in the servicing space with an increased emphasis on customer partnership.

• Analytics and business intelligence: In order to establish and sustain the customer ecosystem, the collection of additional data elements such as social and multichannel behavior and then acting upon them to derive the right personalization and targeting, will be crucial. Advances in Big Data technology will be one factor in leveraging the data, while processes to collect the right data will be the other primary factor.

• Operations and technology integration: The emerging social face requires significant investment to cut across product and even geography verticals. Developing service-oriented architectures for internal systems as well as building interfaces with external entities, operational processes will also require significant overhaul to maintain the desired customer experience.

Conclusion

With emerging interactive marketing technology, the means are at once easier and also more complicated. We can reach customers quickly and everywhere, but the key question is: Are we starting this encounter with an offer of short-term gratification value or are we engaging in a slow dance for a longer term ecosystem?

[Mindtree is a global information technology solutions company. www.mindtree.com]

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