Every business—and every bank—has a corporate culture. And cultures are made up of attitudes, behaviors, and company values. The question of culture is a key one for banks that are looking to become more customer-centric.
Customer centricity is a hot topic of discussion among banks in the Middle East in particular. It is a strategy that both global and local banks are taking very seriously in their quest to stay ahead of growing competition in the region.
At a time when most banks are struggling to grow, many banks in the region are well-capitalized and have the funds at their disposal to exploit new growth. They are engaged in pursuing new revenue opportunities and diversifying their income streams. In this environment, customer centricity fits as a natural strategy for many reasons.
Many banks are seeing impressive growth in the number of new, young customers. These customers are increasingly sophisticated and value customer centricity. They see how customer focus is being applied in other industries and with new technologies. They expect the financial services industry to keep up.
There is rising intolerance for bank service that simply goes through the motions. Customers are demanding more. Relationships are very important culturally when doing business in the region, and customers are looking to build a trusting relationship with their bank. Most want respect in the relationship to be reciprocal. They want to be treated as people rather than as just account numbers. Competition is fierce as banks look to capitalize on the region's wealth, its growing young population, and pace of economic development.
Most importantly, however, becoming a customer-centric bank can have tangible benefits for the bottom line. Turkey's Isbank, for example, implemented an enterprisewide customer-centric transformation within the past few years, with its stated mission to be the "bank closest to customers." Working with Peppers & Rogers Group, it implemented measures such as installing customer relationship managers in every branch, overseeing specific "customer portfolios" (i.e., groups of customers with similar needs) and centralizing reporting functions previously performed by branch personnel in order to allow more time to interact with customers.
This approach achieved some impressive results:
- Total assets rose by 130 percent
- Loans rose by 160 percent
- Deposits rose by 137 percent
- Net interest income rose by 140 percent
In addition, Isbank branches operating within the new business model increased their assets under management by 25 percent compared to branches in which transformation initiatives were not carried out.
Egypt's CIB is also very focused on customer service and customer-friendly banking channels. In a 2008 interview, CEO Hisham Ezz Al-Arab said that he believes the bank's reputation for well-established customer relationships is a distinct competitive advantage. He believes that each customer deserves to enjoy a unique banking experience. The bank has invested heavily in training, for example, empowering a knowledgeable workforce to provide an outstanding service.
The best examples of customer-centric transformation from anywhere in the world all share a common thread—leadership that drives change in favor of customer focus.
What is the role of leadership in changing culture?
Strong leadership is integral for any bank that wants to develop a customer-centric corporate culture. Leaders must be the driving force for cultural transformation and they must relentlessly promote values such as openness, innovativeness, friendliness, and personalization that are key to a customer-centric banking experience. A strong, consistent message from the top is a signal that customer service is no mere window dressing and that employees need to take it seriously as a key priority.
The leader must articulate a vision for the future of the bank as an organization that focuses on customers' needs through every process and on every level of doing business. For the truly customer-centric bank, the customer IS king. The leader must help everyone in the bank understand this and lead them in working together to make that vision a reality.
The bank will first have to identify its strengths and weaknesses regarding customer centricity. Honest feedback from everyone in the company is desirable here to get a true picture of the company culture as it really is, rather than what employees think management would like it to be.
There are several tools banks can use for such assessments, ranging from in-house surveys to internal working groups, that will best be determined according to the needs of the organization. In some cases, bringing in outside consultants who specialize in change management can allow a bank to benefit from others' experiences and create a change plan based on proven methods.
The bank will also need to identify what customer centricity means for its organization and the expected benefits of the change. These should be clearly outlined so that employees can see the reason for the changes. Employees will be much more enthusiastic and much less resistant to positive change when they can see that the desired changes will be good for the organization, as well as for them personally.
The end goal is for the new culture to be internalized rather than imposed from the outside. New ways of thinking and behavior should become automatic and the organization will use the new cultural principles to drive development and progress.
Going from the old culture to the new will not be accomplished instantly. Culture is deeply ingrained and encompasses not only processes, but attitudes, assumptions, communication styles, goals and roles, among other elements. True change will require carefully planned, step-by-step progress that is closely monitored and guided by management.
A dedicated change management team, composed of representatives from all areas of the organization, can oversee the change effort and help it stay on track. Leaders must clearly emphasize the importance of the change management effort and give the team the status and authority needed to implement effective initiatives.
Before the plan is rolled out, those spearheading the change initiatives must dig deep into the details of how the organization can go from point A to point B. Part of this process must be anticipating how the changes will affect people on a day-to-day basis, as well as thinking ahead to the questions and objections that could be raised as every level of the organization.
Reaping the rewards
Transforming a bank's corporate culture to be truly customer-centric is not an easy task, but it is a must in the atmosphere of growing competition and high customer expectations that banks in the Middle East are experiencing today.
Once leaders decide on a customer-centric cultural change, communication and consistency are critical, starting with the highest levels of the organization and working down to every single employee.
Ideally, each person in the organization will become an associate for change who can influence those around him or her. Think of it as a cascade of change that starts at the top and gathers strength as it pours down through the organization.
Middle East banks that succeed in creating a customer-centric corporate culture will reap the competitive advantages of an improved reputation for customer service, stronger relationships with customers, a mindset that contributes to more successful products designed with the customer in mind and more selling opportunities, among others. Focusing on the customer is another way to focus on success for the future.