By James Lewis, management consultant & Eleni Houhoulis, a consultant at Elixirr
If you keep up with the latest in the financial services industry, it’s fair to believe that the future of commercial banking is digital-only. The terms are all around us… ‘Banking-as-a-Service, ‘AI & Machine Learning, ‘Digital-first banks’. Customers only want to self-serve, technology can automate and do everything better and the future of the banker as the centre of the client relationship is coming to a close. But is that really the case?
It goes without saying that the direction of banking is digital – and this change is happening quickly. In 2021, Citi Group reported that commercial digital account openings increased by 80%, seeing a further 150% increase in instant payment volumes. However, in times of uncertainty, much like the COVID-19 pandemic, recent market instability, and when making critical business decisions, people are reassured by a human connection. Relationship managers (RMs) play a critical role in creating psychological safety, driving client engagement, and ultimately growth for commercial banks. Whilst technology is an enabler to these activities, it fails to replace the centricity of client relationships fostered by the human.
Keeping the banker in banking
Over the past 10 years, large banks have focused their investment on delivering change to core business services to stay competitive with digital-only entrants. From mobile business banking apps to digital client onboarding in minutes not days, technology and digital innovation has been at the centre of all material investment. Meanwhile, RMs continue to be reliant on Excel and Google and are hindered by an unconnected web of systems that they need to do their jobs. This begs the question: what opportunities can be created by maximising value through the RMs?
The harsh truth of being a relationship manager in commercial banking
- At times of uncertainty, customers need a strategic advisor. RMs currently don’t have the time, capacity, or timely data-led customer insights at their fingertips to play that role.
- Day-to-day performance management focuses on activity metrics (e.g., number of prospects called), not outcomes. Scorecards are overly complex and/or drive the wrong corporate behaviours.
- RMs are frustrated with frontline tooling (e.g., CRM systems, Client Planning tools and AML workflows). As well as creating inefficiencies, this can lead to management not trusting the performance data they receive and struggling to get the insights needed to run their business.
- Innovation is inevitable. In the case of relationship managers & management, innovation is happening at them, not with them.
Seize the opportunity
Commercial banks find themselves in the exciting intersection between challenge and opportunity. One they can seize by empowering and enabling their RM to do what they do best – foster strong customer relationships and drive growth. Commercial banks need to keep the banker in banking to remain competitive – but how?
Management, listen up
Here are some key considerations to keep in mind to further tap into this value of your relationship managers.
Are you providing a self-checkout experience to those who would pay for a personal shopper?
- How are you identifying, segmenting and implementing a customer needs-based coverage strategy (digital-only versus relationship managed)?
- Do you have the customer research and insights to correctly target and optimise your coverage model? What can be learnt from other industries?
- Are your frontline teams correctly set up to meet the needs of the client, or are you losing out due to lack of relevant sectorial and industry knowledge?
Are you tracking regular attendance in the office or at the latest corporate-values workshop, and losing focus on quality pipeline & revenue management?
- What KPIs are you currently using to assess the performance of your RMs? What impact do those KPIs have on the culture and behaviours of the community?
- Have you created a people development agenda that will maximise the value of RMs and ensure top talent is retained?
- Are you clear on what extent of an RMs day-to-day activities are spent on value-add activities, rather than administrative tasks?
Are your RMs trying to win a Formula 1 race with the family Skoda?
- Are you doing enough to equip RMs with timely data-led insights and knowledge to maximise the value created by each client?
- Are you providing RMs with the technology needed to automate manual and non-value add activities, provide better servicing & allow them to focus on client relationships?
- Is there clear responsibility to ensure that frontline tooling and insights meets the needs of customers and RMs, and deliver a simple and connected ecosystem?
In a world of uncertain economic conditions, continuous emergence of new technology and ever-increasing customer expectations, commercial banks need to differentiate themselves and deliver growth. How? By investing in a future-proof frontline that will attract and retain their clients.
Our team are experts in the interaction point between evolving customer expectations, industry leading innovation and UX, customer segmentation models and leveraging data, analytics and insights to help deliver growth in banking. We see the emergence of a hybrid model for the RM experience between human and digital assistance, which seamlessly integrates with customer channels. So, ask yourself: if you are not going digital-only, and are keeping the banker in banking, are you making the most of your RMs?