building the customer centric enterprise

A Steria White Paper

Building the Customer Centric Financial Services Enterprise

è www.steria.com/uk

Prepared by: Sean Tomlinson, Head of Consulting, Financial Services Sector

Table of contents

Executive summary 3

Introduction – Good customers; poor suppliers? 4

4 Steps to a Customer Centric Enterprise 7

So what does a Customer Centric Enterprise look like? 12

Taking the model forward 14

Conclusion 14

Bibliography 15

02 | Building the Customer Centric Financial Services Enterprise è www.steria.com/uk

Steria canvassed the opinion of senior service engagement and customer experience personnel in the financial services sector. We asked them what customer centricity meant to them, what plan or programmes they had in place to deliver a customer centric experience and whether organisational silos were a barrier to customer service excellence.

Their opinions are used in this paper to examine the hypothesis that there is an appetite for building a customer-centric financial services organisation, but the enterprise operating model creates a structural barrier to bringing this to fruition This is reflected in the response to our survey by Anthony Thomson, Chairman and Co-founder of Metro Bank, who comments on existing bank staff: “There are some great people trapped in a broken model.”

The paper discusses our findings, identifies the problem and outlines a solution based on a new four-step model:

Step 1: Identify the customer purpose for each service

Step 2: Plan the customer journey to achieve the purpose

Step 3: Identify the services required along the customer journeys and build the supporting organisation accordingly

Step 4: Provide access to the service offerings by whatever channel the customer chooses.

It argues that until we translate our own experiences as customers into a new organisational structure realigned around delivering against the customer purpose, true customer centricity will not be achieved.

Executive summary

What’s going wrong with customer service? Why aren’t banks and insurers operating as true customer-centric financial services organisations when they know great customer service is a crucial differentiator?

Building the Customer Centric Financial Services Enterprise | 03è www.steria.com/uk

“ There are some great people trapped in a broken model.” Anthony Thomson, Chairman and Co-founder of Metro Bank

Why is it that when we act as the provider, given we know what makes for a good or poor experience ourselves, we are not always able to provide an excellent experience for the customers we serve? Is it because we have limited tools to hand, do we just not care, or is there something else at play which we simply can’t influence?

As customers, we get a real buzz from someone exceeding our expectations, yet time and again we feel let down by our service providers. Surely our collective experiences as customers ourselves should mean that we can consistently understand and meet customer requirements.

More typically, however, if you start a conversation about poor customer service, everyone has an opinion and a story to tell about an incredibly poor experience. And financial services organisations are often right at the heart of these conversations.

Identifying the problemSo what needs to be done to turn customer service around? How do you become more customer focused? How do you increase customer numbers and customer loyalty? First you need to identify the problem. Whether it is general banker bashing, concern over bonuses, or a feeling that the integrity of financial services organisations

has been damaged by a range of mis-selling ‘scandals’, the level of customer expectation is set low. However, even with such low expectations, time and again the message will come back that the service received is poor or very poor.

Customers punish poor service. We don’t have to look too far to see evidence of this inside and outside the financial services sector. The Institute of Customer Service reports in January 2012 on its analysis of customer satisfaction, sales and market share in the UK. “The four retailers with the lowest customer satisfaction all suffered a serious decline in sales. Comet posted the biggest sales fall (-14%) and scored lower customer satisfaction than most retailers in the survey (71.7)”1

In financial services, we are still counting the cost of damage to customer trust caused by PPI mis-selling. According to the FSA, “Redress paid to customers who complained about the sale of payment protection insurance (PPI) has now reached £3bn”2. And in a recent study aimed at financial services organisations, 55% of respondents said that despite our recessionary times, they would be more likely to switch their bank due to bad customer service than to get a slightly better deal.3

So if we know what makes for a great experience as customers, but still fail to deliver it as routine, it seems likely there is an inbuilt structural issue getting in the way of delivery. The hypothesis of this paper is that the enterprise operating model is a critical barrier to achieving customer centricity.

Introduction Good customers, poor suppliers? We are all customers. In day-to-day life we buy products and services that meet our needs and we make choices about the organisations we choose to spend our money with. Sometimes we have good experiences and sometimes they are poor – it is easy to tell which is which. But some of us are more than just customers; we are also part of organisations that deliver products or services.

Did you know… By and large it is big banks that take the top spot as the worst companies when it comes to looking after their customers. (Moneywise.co.uk June 2011)


“ American, which filed for bankruptcy-court reorganisation in November, has struggled with its operation for several years. For the past five years, American has been among the worst three airlines at on-time performance, a key measure of an airline’s operation since it impacts mishandled bags, bumped passengers and even cancelled”Wall Street Journal, 5 Jan 2012 reporting on American Airlines’ performance in the annual Middle Seat airline survey

1Institute of Customer Service – UK Customer Satisfaction Results January 20122FSA, February 20123Youbiquity Finance Research Summary 2012, Avaya and BT plc

Understanding the problemSo let’s look in more detail at this enterprise operating model. Financial services organisations provide services to customers, which they pay for directly or indirectly. Profit is made from these interactions. It’s a simple premise. Although these customers are the start of the business model, they can be seen, however, as just the means to an end, which is to return profit to shareholders and offer a financial reward (of salary, bonus, or shares) to the employees. At their heart all financial services organisations are retailing money or managing risk. These products are intangible and therefore the delivery of the promise to the customer is paramount. But this customer promise can be damaged in operation by the need to manage the investment or reward requirements of other stakeholders.

It’s all about the profit. Or is it? Everyone understands that this is a business and without the profit motive certain services will simply not get offered. However, since the banking crisis, financial services firms have been falling over themselves to regain the higher ground by claiming to be customer centric.

There are many examples which evidence the willingness to put the customer at the heart of everything and deliver on the customer promise. In reality, however, despite this willingness, financial institutions still appear to structure themselves in such a way as to immediately damage that customer promise. Perhaps one of the highest profile failings most recently has been at Santander, named the UK’s worst bank for the second year running.4 Long queues in branches, unhelpful call centres and untrained staff were cited as key customer service failings.

Also in financial services, the Financial Ombudsman Service reported that it received more than 5,000 enquiries and complaints a day concerning financial firms. In the 2011/2012 financial year, one in five of these enquiries went on to become a formal dispute requiring the involvement of adjudicators and ombudsmen– a record 264,375 new cases, up 28% on the previous year.5

The problem is clearly widespread, but it goes beyond just financial services. For example, according to the Institute of Customer Services in February 2012 “Cuts have damaged the quality of customer service in close to half of organisations (48%) with only a quarter preserving service levels through the recession.”6


“ For NEST the number of members and employers we sign up is the ultimate measure of success, but that measure doesn’t determine whether we are acting on the members best interests. We are working out how to do this.”Peter Halsor, NEST

“ When making difficult decisions the overriding decision is whether it is in the members’ best interests.” Peter Halsor, NEST

Customer Centric Offerings Organisation (Campaigns)

Aviva scoops award for putting customers at the heart Aviva (press release)

The goal of all of this work is to put our customers at the heart of everything we do

Co-operative Banking Group (Annual Report)

Satisfaction Guaranteed First Direct (Cash back promise)

We are building a sustainable future for our business by putting customers at the heart of everything we do

Lloyds Banking Group (Responsible Business Report)

Helpful Banking NatWest

Putting Customers First Standard Life (Sustainability Report)

“Understanding customers’ needs and building customer insight is crucial to any business success” At Zurich we place this cus-tomer ethos at the heart of our business too.

Zurich (Marketing Brochure)

4Moneywise May 20115Financial Ombudsman Annual Review 2011/126Institute of Consumer Services – 10 Ways to Win the Battle against Customer Churn February 2012

Efficient but ineffective?The enterprise operating model in financial services is currently designed for the efficient management of resources in delivering services. These are usually delineated by grouped skill sets and are often focused around groupings of these skills within product lines. The ‘powers that be’ have worked out constituent parts of the product delivery process then taken as much cost out of them as possible. However proficient management of resources is from the company perspective, it clearly doesn’t always deliver a rewarding customer experience. In short they may be efficient, but are they effective?

The following reinforces this point: “With the exception of American Express, which frequently earns accolades from its customer experience, the companies we see allocating the greatest amount of resources are widely recognised for providing disappointing customer experiences….We are seeing a large number of companies simply handing out new titles to operations staff without committing to customer experience management.”7

For some organisations, achieving effectiveness (in terms of customer purpose) and efficiency is a strategic imperative that requires a defined policy.

Rod Butcher, Group Head of Customer Experience and Insight at Aviva, concurs,

saying: “Aviva has embedded the customer principles into its formal risk policy and this has been incredibly effective in ensuring the voice of the customer is heard at executive level. The FSA regulated principles of ‘Treating the Customer Fairly’ have been the start point and modified to suit the global brand aspirations of Aviva. They have become entrenched in the policy making process. For example, if a particular area is seeing high levels of early product cancellation, the team has a remit to investigate and use the risk documents as a way of demonstrating that the product may have been developed to suit company need rather than customer need. This level of oversight is necessary to maintain the balance between achieving corporate ambition and customer requirement.”


Figure 1 - Customer Journey cuts across silos

Financial Services Organisations

BRANCH CONTACT CENTRE

WEB MOBILE

DEPOSITS/ SAVINGS

MORTGAGES CARDS INVESTMENTS

IDENTIFICATION AND VERIFICATION

CALL HANDLING

ACCOUNT OPENING

CARDS PRODUCTION

Silos by channel

Silos by product

Silos by function

7Walden, Beyond Philosophy 2011

?Customer

purpose achieved

Are these units collaborating to deliver a service across the customer journey?

Or getting in the way of achieving the customer purpose?



4CUSTOMER ACCESS TO SERVICES

CROSS CHANNEL , NOT MULTI CHANNEL


Step 1: Identify the “customer purpose” for each customer service offered. To ensure your success you need to have a very clear idea of who your customer is and what the customer requires.

Step 2: Plan the process for the customer (the customer journey) around the customer needs in support of the customer purpose.

Step 3: Identify the services required along each customer journey to deliver the most effective customer purpose and build the organisation around the effective delivery of these services.

Step 4: Provide access to the service offerings by whatever channel the customer chooses and allow them to swap channels mid-journey if that is what they require.

So that’s easy then. But what does this mean in practice?

4 Steps to a Customer Centric Enterprise

So what should the financial services sector be aiming to achieve? There are four key steps that can assist in truly putting the customer at the heart of everything a financial services enterprise does. This is a new model that aims to fix the ‘broken’ enterprise operating model, as follows:

Figure 2 - Customer Centric Enterprise Model

CUSTOMER - SEGMENTED IN LINE WITH

YOUR PRODUCT/ SERVICE

OFFERINGS

1 1CUSTOMER PURPOSE

2STEPS IN THE CUSTOMER JOURNEY

(FOCUSED ON ACHIEVING CUSTOMER PURPOSE)

SERVICES COLLABORATING ALONG THE CUSTOMER JOURNEY TO DELIVER

THE CUSTOMER PURPOSE

3

Step 1: Identify the customer purposeIn order to start this process you need to be really clear about the products and services you offer and how they are perceived by the current and target customer base. Your different customer segments will almost certainly have different outcomes or purposes in mind for the same service.

So the message here is to first really understand who makes up your customer base. You must ensure there is a clear alignment between the following three subsets:

• The actual customer base (which your customer service operation is serving)

• The target customer base (which your marketing and sales teams are addressing)

• The desired customer base (which your business strategy is pursuing).

Where this alignment is not clear, this should be resolved as soon as possible. Does this mean we can’t continue if there is no alignment? No, but a clear prioritisation of effort is required to ensure that you stay focused on getting the best return on your investment.

Once you have clarity on the customers and the services you are offering it is then possible to identify the customer purpose for each permutation. This should be a simple statement of what success looks like for that customer. It should also be framed in terms describing what the customer can now do based on having achieved their customer purpose. Understanding what the customer can now do is incredibly important. Why? It helps us to determine the end point of the service offering.

So let us clarify this to better understand what we mean by the customer purpose. Where, for example, a customer is looking to open a new online instant access savings account, the service doesn’t end when the customer has completed and submitted all the forms. Instead the end point is when the customer is able to achieve their purpose, which is to deposit money that is earning interest and to withdraw funds easily through all available channels.

So if the account provides access to use card withdrawals or make payments online, the purpose has not been achieved until a) the customer has made a deposit into the account, b) it is attracting interest, c) the card has been fully activated with the ability to withdraw funds from it, and d) the customer can make payments online. There should be a target timeline for achievement described within the customer purpose. Clear expectations should be set, not hidden within the small print. This will ensure the customer understands exactly when they will be able to achieve their purpose and that their provider is working to achieve these timelines.

Imagine the frustration if, having handed over cash in branch to open an instant access account, the customer has an urgent need to make a payment using that cash but is unable to. Why? Because despite recognising that the account is open (after all that process has been completed), the provider hasn’t completed arrangements to allow for funds to be withdrawn and the three-day service level target was hidden in the small print, if explained at all.


“ There is a clear distinction between being Customer Friendly and Customer Centric. If our customer service agents focus solely on what customers say they want, rather than what they need (to fulfil their purpose), this will ultimately lead to customer disappointment when some apparent wants can’t reasonably be satisfied’.”Peter Norris, RBS

“ We can already offer great service to our new customers, the next step is to recognise returning customers and offer them even better service.”Peter Kovari, Travelex

Step 2: Plan the customer journeyCustomer journey mapping is no longer a new discipline, but it has tended to be used in Web and mobile developments to assist in improving the customer experience at each touch point. Whilst valid, this tends to focus minds on the technology capabilities rather than the customer purpose, which should, unless clear expectations have been set up front, be channel agnostic.

This is exemplified at Metro Bank, which is, according to Anthony Thomson, “completely channel agnostic”. He explains: “We consider the customer experience, not the channel. It is not for us to define what the customer wants, but to give it to them in the right way.”

Once you have defined a set of customer purposes, developing the customer journey by putting yourself in your customers’ shoes can be a powerful experience for executives to go through. Focusing always on achieving the customer service, an experienced facilitator can help executives to appreciate the pain of customers who have been failed by the organisation in the past.

Too often strategy mandates the customer journey teams to find ways to make the journey more efficient without experiencing the reality of this efficiency for themselves. Once they do, the focus on efficiency can very soon turn into a focus on effectiveness, or in other words achieving the customer purpose. And after all, what could be more efficient than a process that is absolutely effective in doing exactly what it is supposed to do?

Step 3: Build the services-based organisation For ease of management, financial services companies have often developed organisation structures that are based around core competencies. This facilitates training and the easy identification of career paths. Resources can be applied to demand management models to drive efficiency of operation and reduce costs.

Another route has been to provide profit and loss (P&L) responsibility at the channel level. As new channels have been adopted and then entrenched, from branch to telephony to online, the channels have often become the budget owners.

Whether functionally aligned or channel based (and often both) the customer journeys typically flow across many of these silos. In one example in an Investment Management team the delivery of a contractual agreement to supply fund management services to a

pension fund requires action or authorisation from 17 different departments. The scope for error and delay in this instance is enormous.

A number of those executives canvassed by Steria conceded that organisational silos were a problem, with one commenting: “Yes we are siloed. We have a desire to break this down but there are no concrete actions as yet. The channels are in some respects competing so, for example, if there was an idea for the online channel to implement a programme that could help support the store channel or vice versa, they wouldn’t prioritise this. The lack of an overarching strategy to focus on customers means each P&L is effectively operating alone.”

There is another way. Build the organisation structure with the customer at the centre. As Peter Norris, Director of Group Lean and Service Management at RBS, explains: “Start with the customer in respect of the service they need. Understand the customer journey and moments of truth – and ignore the current organisation while doing that thinking.”

So it’s not a case of making it easy for the management of resources (however laudable the objective), but of ensuring that all the services required to deliver the customer journeys are aligned in the most effective way with the customer purpose.

The first step on this approach is to define the services required for each of the customer journeys, including all channel variations. After defining the services required to support just a few customer journeys, you will find that many services can be reused across journeys.


“ We are attempting to break siloes with a combination of Net Promoter Score (NPS) as our key measure; Customer Journey Mapping as a key cross functional approach and systems thinking. These things can only be achieved by working together and indeed we do not go into an area to start to develop an approach unless we have top level sponsorship and a cross functional team to work with.”

Rod Butcher, Aviva

Once you have clarity on all the services it is then possible to rebuild the organisation structure around these services, combining them to deliver the customer purpose in the most effective way.

The aim of this approach is to change the unit of work from a process or a process step into a delivered service. It is outcome focused and the key measure of success should be the achievement of the customer purpose, not a step on the journey.

In building this service model against the customer journeys the whole organisation will understand how it supports the achievement of the customer purpose. Everyone will see how each moving part can support or undermine the implicit customer promise of the brand.

The primary objective of this service-oriented approach is not to create centres of excellence, which themselves could become silos, but to create centres of service focused on delivering the customer purpose.

Handoffs and interfaces should be minimised to ensure delays and errors are removed. This will dramatically reduce the cost of process failure, which typically exhibits itself by customers having to reengage with the company, time and again to achieve their purpose. Alternatively, they simply take their business elsewhere.

Step 4: Provide cross channel access

When customers engage to achieve their customer purpose the channel is merely a means to an end, not an end in itself. There have been many channel initiatives where all the benefits are seen from the company point of view, rather than the customers. For example there was a trend at the turn of the century to make web sites ‘sticky’ – to provide a reason for the customer to return again and again. What this forgot entirely was the customer purpose in returning.

If the customer purpose is to research a product or service that may or may not lead to a purchase, then surely the focus of the design should be to ensure that the customer finds the information they need as quickly and easily as possible. The design should also ensure they have a clear understanding of exactly what they will be getting and that their expectations are set relating to important considerations (such as the service only being provided via the web channel). If the customer achieves this purpose and decides that the product or service is exactly what they need, or decides that it isn’t but the experience of finding this out was good, they will return to make the purchase or to research further.

Stickiness is achieved by giving the user of the site what they want, not by artificial gimmicks. Unless your purpose is to drive traffic for an advertising-led business model or you have a clear marketing strategy to drive brand awareness (anything other than a clear focus on achieving the core customer purpose is wasted effort.

This is really about ensuring that the primary mechanism and usage of the channel should be first and foremost about helping the customer to achieve their purpose. Other corporate goals should be secondary because by distracting from the customer purpose the overall efficiency of the process is compromised.

“ It is about the whole customer journey, not just one issue such as the call centre. Focus on what the customer wants, even if that means making it easy for customers to leave if that is what they want.”

So if the channel is a means to an end, from the customer’s perspective, unless they have had very clear expectations set about which channels they can use, all channels should be available and the customer journeys should accommodate each of these channels. It should also be possible, where appropriate, for the customer to switch channels at any point.


“ Where there is customer demand we would like to move from a transactional to a relationship mode, but we mustn’t damage the elements of the transactional model which customers value the most, e.g. speed of service.”Peter Kovari, Travelex


At this point in the argument for customer centricity the response is typically “I’d love to do that but our systems don’t support it”. Or it might be “I can see it would cost a fortune to do that, so where’s the business case?” Both are valid responses but both work from the assumption that the processes and organisation structure must always remain the same while the systems change. If the customer journeys can be managed in a way that the customers achieve either their purpose or a significant staging point on the journey, then the transfer between channels and often much more can be easily achieved. By building customer journeys with many steps, handoffs and interfaces in the first place, the structure of the organisation can work against the achievement of the customer purpose and create artificial barriers to cross channel access.

The biggest single barrier to multi-channel capability in most organisations is not the change to systems required (significant though this may be) but the ability to influence the delivery of the customer purpose across the whole customer journey. That’s because many elements, whether staff, locations or systems, lie outside remit or the budgetary responsibility of any one decision making body.

“ Whether spoken or unspoken the barriers to change are more often political. They are more about influence or perceived influence, than about a real business need.”

If you make access to services simple and easy to use, in the way which customers want to access them, the services are much more likely to be used. If the services which form part of the enterprises value proposition are used and the experience is good, the brand proposition (or customer promise) is reinforced. Customers are then more likely to recommend your business to others or use it again themselves. Conversely, if the services are complex and difficult to use, you risk losing customers and any new business opportunity coming from their recommendation. Many of our respondents cited the Apple model’s simplicity as an exemplar for product and service delivery.

A number of mechanisms are available for achieving seamless cross-channel access, such as loosely coupling the experience layer to the existing target architecture to deliver a cross-channel architecture with a world class customer experience. These will be discussed in future papers looking at different aspects of the customer-centric financial services enterprise.

“ We need to look outside of Financial Services for good models of Customer Centric organisations, for example, eBay or John Lewis.” Peter Halsor, NEST


Peter Halsor, Director of Customer Experience at NEST, describes the most important success factors for a customer centricity/experience programme as “having both qualitative and emotional measures in place to gauge not only whether a customer achieved their goal, but also the emotional journey they went through to achieve the goal.”

He adds that customer centricity begins with knowledge. “A customer centric organisation is one that is driven by user centred design and a research/fact based approach.”

In financial services American Express is among those that stand out.8 How has it achieved this? Most people talk about its customer-centric products and services with, for example enhanced benefits and rewards and ease of redeeming rewards points. Alongside American Express, our respondents cited First Direct, Metro Bank and USAA as exemplars of great customer service in financial services, with one commenting that it would be interesting to see how Virgin brings its brand to retail banking.

While new to the financial services scene, Metro Bank has caused a stir with its customer first philosophy and, importantly, simplicity. Customers know what they’re getting and there is no hard sell. Anthony Thomson says: “All our decisions are based around building the customer experience, not on the Return on Investment. When we were defining customer experiences, we kept testing ideas to ensure that we weren’t falling into the trap of being company centric – every time we suggested something we would test it again and again to ensure it was supporting the customer experience.”

Another theme amongst those deemed exemplary customer-focused organisations, both within and outside the industry, is that they don’t spread themselves too thinly. Take Apple, for example. It knows what it does; and does it brilliantly. First Direct does likewise. Conversely, Santander who have been heavily criticised for customer service recently have been accused of over extending themselves with frantic acquisitions.9

A key challenge within the context of customer centricity is how to achieve a reliable measure of success. It’s not easy.

As Peter Halsor, NEST commented “Whilst it’s often possible to identify whether a customer achieved their goal the real challenge comes in quantifying the emotional measures, for example how did the customer feel about the process he went through?”

Peter Kovari, Global Head of IT Architecture at Travelex, has a focus on customer and channels and notes: “We want to get to the point where we are an intrinsic part of the customer journey, literally as they plan to travel, whether they choose to do this online in advance or simply wait until they get to the airport.”

A number of our respondents felt that performance measures such as Net Promoter Score (NPS) were important, but their shortcomings recognised. Aviva’s Rod Butcher comments: “We don’t measure the achievement of the customer purpose, but instead have focused almost exclusively on NPS as a metaphor for all customer behaviour. We recognise this has its limitations, but in attempting to change mindsets a consistent focus on a single aim of increasing NPS since 2007 has been very effective.”

For Paul Schofield, Customer Advocacy Manager at The Co-Operative Banking Group, it is the customer journey that currently prescribes the company’s customer centricity. “The business has got sight of the entire customer journey and is working on the ones that customers value most. However, we don’t have a view yet on the customer purpose for all these journeys. We will use a Service Level Guarantee mechanism to measure the customer outcomes.”

So what does a Customer Centric Enterprise look like? Organisations that deliver an enhanced customer experience are thriving. It is no coincidence that industry leaders such as Apple, American Express, Amazon and US retailer Zappos are also leaders in customer service.

Did you know… American Express Ranks Highest in Credit Card Customer Satisfaction for a Fifth Consecutive Year

J.D. Power and Associates reports Aug 20118

8JD Power and Associates- Credit Card Satisfaction Survey August 20119Moneywise June 2011


“ Everyone lines up to deliver the required customer experience. They value what customers say about them and act on it. There are lots of customer recommendations: they plan, innovate and act for long term growth and success, not short term targets.”

What a Customer Centric Enterprise looks like - Paul Schofield, The Co-Operative Banking Group


The four-step model outlined in this paper was viewed by those taking part in our survey as accurate and appropriate at a general level. It establishes a way to fix what Metro Bank’s Anthony Thomson describes as “the broken model” in financial services.

Respondents see the four-step model as a building block that will evolve further with enhancements more specific to their industry or organisation. For example, The Co-Operative Banking Group, Paul Schofield comments that he would “Extend the model to include colleagues and organisational culture (human capital). It is important to get that bit right as our people will ultimately drive the customer experience.”

For Peter Kovari at Travelex, adapting the model might have a regional bias. He says: “In terms of adding to it we could describe the differing customer purpose and journey as they relate to different countries. Regulations and custom dictate that the expectations of customers are different around the world. For example, in Japan customers would naturally get their currency from the postman, which is a model that does not work in most countries. We are looking to optimise the model we use to introduce new services in new countries and trying to reduce the number of systems necessary to cater for the local differences, using a reference model that works across the regions. ”

Aviva’s Rod Butcher says: “The model describes a desired to-be state. The amount of change requirement needs a starting point, however, so the change and direction of travel can be accurately plotted. At Aviva we are using a model that starts with the customer and then moves back in to the company and forward to the financial outcomes. Each of the elements needs consideration.”

NEST’s Peter Halsor reinforces the need for the model to evolve our time “NEST will soon be moving from a zero customer base to hundreds of thousands, so evolving the model is crucial.”

Getting the structure rightThere will, of course, always be challenges in implementing any new business model and a recurrent theme amongst our respondents is the organisational structures and specifically silos. One respondent noted: “The corporate mindset looks to lock customers in when there is a retention problem rather than looking at the source of the problem ‘for example’ why customers are looking to leave.” While another commented: “Traditional profit and loss account structures create silos and barriers to customer centricity.”

In one organisation a customer programme has set an objective to break down silos, but according to our respondent, “It is hard, for example, there seems to be a lack of basic understanding across the company of how individuals’ jobs will have an impact on customer satisfaction. In an internal survey of 2,000 people 17% of them couldn’t articulate in any way how their role might have an impact on customer feedback.”

Taking the model forward

There is clearly no magic bullet when it comes to building a customer-centric financial services enterprise. Nonetheless, it is important to make a start with a focus on the customer purpose. From there everything else becomes much clearer.

“ We have accepted that we are in perpetual beta and continually learning.”Peter Halsor, NEST

ConclusionLooking to the future, it is clear that there is an ambition to build the customer-centric financial services enterprise. It is easy to see why: financial services are, by their nature, intangible; not something physical that can be picked up, handled, eaten or worn. As such, service becomes a vital differentiator.

The model outlined here provides a starter for 10 in how to develop a customer centric enterprise. There is energy and enthusiasm in meeting these customer requirements, but also a recognition that the challenge is not just structural but cultural. There needs to be real will power and drive from the top of organisations to harness the benefits which the approach can bring. Some are sceptical that this can happen, but the respondents to this paper have demonstrated that the kernel of customer centricity exists – and it needs room to grow.

Only once the structure and systems of the organisation have been realigned around delivering against the customer purpose will we be able to project our knowledge and experience as customers ourselves on to the business of delivering world class customer service.


Bibliography

Contributors

Rod Butcher, Aviva - Group Head of Customer Experience and InsightMartin Coppack, Financial Services Authority (FSA) - Technical Specialist: Consumer Engagement Peter Halsor, National Employment Savings Trust (NEST) - Director of Customer Experience Jed Hodgson, Financial Services Authority (FSA) - Manager of Consumer Affairs team Peter Kovari, Travelex - Global Head of IT Architecture Peter Norris, Royal Bank of Scotland (RBS) - Director of Group Lean and Service ManagementPaul Schofield, Co-Operative Banking Group (CBG) - Customer Advocacy ManagerAnthony Thomson, Metro Bank - Chairman and Co-Founder

References

Institute of Customer Service - UK Customer Satisfaction Results, January 2012FSA website, Consumer Information PPI February 2012Youbiquity Finance Research Summary 2012, Avaya and BT plcMoneywise May 2011 and June 2011Financial Ombudsman Annual Review 2011/12Institute of Consumer Services - 10 Ways to Win the Battle against Customer Churn, February 2012Walden, Beyond Philosophy 2011JD Power and Associates - Credit Card Satisfaction Survey August 2011

About Steria: www.steria.com/uk

Steria delivers IT enabled business services which help organisations in the public and private sectors operate more efficiently and profitably. By combining an in depth understanding of our clients’ businesses with expertise in IT and business process outsourcing, we take on our clients’ challenges and develop innovative solutions to address them. Through our highly collaborative consulting style, we work with our clients to transform their business, enabling them to focus on what they do best. Our 20,000 people, working across 16 countries, support the systems, services and processes that make today’s world turn, touching the lives of millions around the globe each day.

Founded in 1969, Steria has offices in Europe, India, North Africa and SE Asia and a 2011 revenue of €1.75 billion. 21 percent* of Steria’s capital is owned by its employees. Headquartered in Paris, Steria is listed on the Euronext Paris market.

*Including the Employees Shares Trust in the UK

Financial Services Sector

Steria has more than 40 years’ experience in the financial services sector. We are the European business and IT transformation partner for many of the world’s leading banks and insurers and have developed an in-depth understanding of how efficient business processes and effective IT can be used to build competitive advantage.

Customer Centric Domain of Excellence

Steria’s virtual Business Communities are essential to the fulfilment of Steria’s strategic business objectives on innovation, knowledge sharing and growth. Our Business Communities are defined by Domains of Excellence (DoEs) which address our customers’ burning issues. Customer Centric Management (CCM) is a key DoE within Financial Services.

Our DoE consultants across Europe share knowledge and collaborate to maintain our business leadership through the design and development of innovative solutions.

Our CCM clients include Barclays, BforBank, Commerzbank, Co-Operative Banking Group, Topdanmark, Volkswagen Financial Services.

Contact usSean Tomlinson, Head of Consulting, Financial Services Sector mobile: +44 (0)7850 795 839 tel: +44 (0)1442 884539 [email protected]

Steria Ltd Three Cherry Trees Lane, Hemel Hempstead, Hertfordshire, HP2 7AH

For further information about our services visit www.steria.com/uk

building the customer centric enterprise

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