For the past few years, there have been significant concerns at various levels over how global economy is going to revive. There has been considerable pressure on the financial institutions to enhance their revenue growth and ensure sustainability in the
market. However, as always, customer expectations are amplifying. While multiple service providers compete for the same pie, customer gets more switching options. This leaves financial institutions in a dilemma of finding revenue growth while spending on managing
customer experience! Well... what gets compromised is mostly the latter!
Many financial institutions are exerting unhealthy pressure on customers, to meet short term revenue objectives. This, in turn, will cannibalize on their in long term. Financial institutions, when they go with wrong practices for being terrorized by revenue
pressure, are confronted with far reaching effects like brand erosion, customer attrition and revenue loss. All these will eventually lead to losing market share. Several studies, including a recent one by Forrester, show that excessive fees can be one of
the key drivers for customers leaving the bank. In a recent survey by a leading website, 88% of the respondents felt that the banks don't explain its charges properly and impose fair fees. This sum up the edgy relationship most customers have with their banks.
The banks are incurring revenue losses as they are paying billions as refunds. According to latest figures, nearly 3.8 million customers claimed back GBP 2.6 billion from British banks.
Money comes in for financial institutions through new customers who, and through upselling to existing and new services. The latter is far more profitable than the former! One can say that the system works best when loyal customers make it a practice to
increase their wallet share, and there is a regular inflow of new customers.
Ensuring easy upsurge in the above factors take a holistic and innovative approach in the way business is been done. Financial institutions across the globe need to revisit their operations, pricing and customer centricity initiatives, in order to be in
the boat, which will sail smooth across the volatile markets.