Can You Be the Friend Bank Customers Need?

By Tyson Nargassans

Product-centered selling can be a powerful urge in banking. Whatever the product might be—HELOCs, savings accounts, money markets, checking—when the pressure comes down from the top to nail the goals for that quarter, the race is on.  What’s the next best product? Who’s going to buy it?

Make no mistake: consumers immediately recognize that these types of sales pitches make no attempt to understand who they are as individuals or how to fulfill their specific needs. But what if you could change the script?

What does it look like when bankers show the same interest in the customer’s financial well-being that a friend would?

Friends don’t try to sell to you. They listen to you, understand you, and try to help you find solutions. For that reason, even a monster-sized operation like Amazon can feel to some consumers more like a friend than the local bank.

A recent Accenture survey showed that even though 75 percent of consumers are very cautious about sharing their personal data, six out of ten would be willing to share significant personal information with their bank in exchange for better services and deals.

Consumers may not realize the potential banks have to identify their individual needs. But the fact is, banks already have the data they need to behave like a friend. They have all the bits and bytes necessary to create relevant, valued communications that solve customer needs. And they can do it without being the creepy friend.

To accomplish this, bank leaders need to change their sales machine to focus on growing relationships. Some key players have already begun. Bank of America’s recent announcement of its automated financial coach Life Plan is a testament to the bank recognizing the importance of building trust and sustaining lifelong relationships.

Building trust

While customers trust banks more than any other industry to keep their money safe, they also need concrete experiences that drive home the belief that their bank is there to look out for their best interests. And every mis-targeted sales pitch risks having the opposite effect. Customers don’t want to be sold. They want the kind of guidance that a trusted friend offers. Done right, that’s what personalization can offer bank customers today.

Anticipating customer needs sends that message loud and clear. Does the data tell you they are going to need a mortgage, or that they’re overlooking an opportunity that might be very handy at this particular time in their lives?  Maybe they are sending kids to college and some re-fi information would be useful. Their need for solutions is as unique as their lives.

In the same way that online merchants can follow patterns to know when you’ll want more pet food, prescription refills or other timely, but less obvious needs, banks have the data to follow customer life patterns. They can recognize needs in advance and proactively step forward to offer a solution. The difference is, it’s much-needed advice, not a sales pitch.  Thoughtful guidance—genuinely helping solve problems—builds trust.

What will it take?

What’s needed is strategic discussion about growing relationships. Legacy banking goals that focus on acquiring the next customer are missing a huge opportunity to grow existing relationships by acting on the data banks already have. Meanwhile, the financial institutions that are worried about new competitors nibbling—or chomping away—at their services can use that fear as motivator for doing something better.

There needs to be a change in mindset, followed by a change in infrastructure, to genuinely embrace a customer-centric approach that will allow banks to step up to the role of the customer’s friend. Yes, at the core of that ability is data. Pumping the brakes on the hard sell and steering towards the role of advisor is going to move the sales machine forward. It may progress haltingly at first, but eventually, it will help the bank go further, and more profitably, than was possible with the old model.

Moving forward

Data may also provide a window into areas where the current selling model is falling short. Once there is a truly customer-centric initiative underway at the bank, it can serve as a good comparison point for showing which approaches work best. But it takes time. We are talking about building relationships, not slam-dunking sales.

Remember that although these concepts aren’t new, shifting to a stronger focus on relevance and customer-centricity still represents a big change for some banks. If you take on too much, too early, the launch project tends to get weighted down with different interests and goals—and it may come to a halt before it begins. Start small, contain your initial program within specific parameters and get some quick wins that show a path to bigger wins down the road.

Executed right, then gradually rolled out throughout the organization, the ability to “act like a friend” is a powerful mindset that touches practically every department in any financial institution.

When a bank proves that it knows its customers, the customers value the relationship more highly and rely on the bank for help with future decisions before reaching out to any other professionals. It’s all about the power of acting like a friend. Because, faced with all the financial decisions big and small that we have to make for ourselves and our families, who doesn’t need a friend?

Tyson Nargassans is CEO and founder of Saylent, empowering financial institutions to proactively and confidently meet the individualized needs of each customer through data-driven solutions, building customer loyalty and growth. LinkedIn.