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Deena M. Amato-McCoy
Deena M. Amato-McCoy
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New technology reinvigorates the concept of the financial services hub.

A saturated marketplace, a finite group of potential customers and the commoditization of new products are jeopardizing banks' customer bases. As a result, they are beefing up retail banking strategies with innovative wealth management programs. By adding collaboration platforms and partnering with other financial service providers, banks are evolving into one-stop financial liaisons that are building customer loyalty.

To gain a competitive edge, banks are launching new products at a furious pace. But, though being first to market with a new product may help some companies sign up new customers, the strategy is not enough to keep banks competitive or build customer loyalty in the long term. "All firms are trying to stand out among a finite customer base," says Peter Rossi, director of financial planning and investing for Atlanta-based NetBank ($4.5 billion in total assets). "The clear winners will be those banks that can present a needs-based selling strategy to the customer."

Toronto-based Scotiabank's growth strategy, for example, is focused on a combination of needs-based selling processes and advice-based solutions, explains Barbara Mason, EVP, marketing, sales and service for Scotiabank ($268.8 billion in total assets). "All of these are supported through enabling technology." Among the enabling technologies are Web-based aggregation solutions, which provide Scotiabank and other banks with a holistic view of their customers' personal or household net worth.

"In the past, traditional banks featured their offerings, but had no insight into services at another organization," says Geoff Galat, vice president of marketing and product strategy for TeaLeaf Technology. The San Francisco-based company's solutions provide visibility into the online customer experience. "With aggregation tools, banks can use portals to gain a single perspective on a customer."

By exploiting TeaLeaf's RealiTea solution, San Francisco-based Wells Fargo ($436 billion in total assets) is learning more about its customers while enhancing their day-to-day experiences with the bank's Commercial Electronic Office (CEO) portal. CEO offers cash management, credit, international, and trust and investment services through a secure Web site. "When our customers access the CEO, TeaLeaf provides us the ability to get a clear picture of their experience," says Danny Peltz, executive vice president and head of Wells Fargo's wholesale Internet and treasury solutions.

Sitting on Wells Fargo's Web server, RealiTea monitors customer traffic. TeaLeaf's solution allows Wells Fargo to replay its customers' sessions instantly and understand the impact of any user problems immediately. "Whether we monitor the adoption of a new service or feature, or follow how a customer uses an application, the tool gives us a better understanding of their typical workflow and verifies whether the flow we've set up ensures the application is intuitive and easy to use," explains Peltz.

Translating Information Into Action

Like Wells Fargo, many banks have made significant strides in gaining aggregated views of their customer bases, particularly in the past five years. Yet, very few companies "are truly satisfied with their levels of retention based on the cross-selling efforts developed [solely] around this information," claims Peter Harvey, president and CEO of Hingham, Mass.-based Intellidyn, a provider of data and marketing products and services designed to boost campaign performance and returns on investment. "The ability to get that aggregated view has gone from complex to simple, though banks are still challenged by how to interpret these aggregated views into direct marketing offers that will be most appealing to customers," Harvey says.

Of course, techology solutions have been developed for this, as well. An analytics tool from Chicago-based SSA Global aims to ease the pain of translating data into actionable offers. As banks gather customer information, "Our predictive models analyze this data and help banks determine which products or offers customers should get," contends Pradeep Amladi, director of industry solutions for SSA Global.

But NetBank's Rossi stresses that if banks really want to gain a better understanding of customer needs, they cannot merely analyze a customer's existing account balance sheet. Instead, banks must learn the customer's future financial expectations, "and then sell them products that will help them achieve their aspirations," he says. "This opportunity takes selling to a different level," Rossi adds. "This forward-looking strategy develops customer loyalty and retention, and it strengthens the customer relationship with the bank."

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