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Customer Satisfaction Is Key to Driving Organic Growth at Banks

The best way for banks to maximize organic growth is to personalize the customer experience.

As Usual, It Starts With Data

To achieve the holistic view of customers' holdings needed to enable a bank to react quickly to their changing needs, a financial institution first must gather the appropriate data. To facilitate these efforts, Credit Suisse (Zurich, Switzerland; US$1.3 trillion in assets) supports its growth strategy with its organizational strategy. The financial institution's global IT group spans the entire bank, including its three divisions -- the investment bank, the private bank and the asset management group, says Philip Cushmaro, head of IT for Credit Suisse's investment bank.

"Before we became one bank, Credit Suisse had been three separate firms," Cushmaro says. "We had separate repositories and separate rolodexes. When we brought the firms together, sharing data was not easy."

"We are building and investing quite a lot in systems that give us information on our clients," Cushmaro continues. "We build databases with MIS [management information systems] to see trends in information. We are building platforms that integrate to help us understand clients."

Cushmaro's group also builds online reports that are delivered to senior managers. The reports allow those managers to observe client profitability and to be more successful serving different segments, he says.

While the enabling technology, including service-oriented architecture, is "sexy," what really matters is the data behind the systems, Cushmaro stresses. "This is all cool and nice, but the real heavy lifting is the quality of the data," he says. "A lot of this effort is underestimated."

A significant part of Credit Suisse's growth strategy is the coupling of IT and business, Cushmaro adds. "I sit on the investment bank management committee. ... In terms of growth itself, any plan or market segment we may want to get into, I get that information right away and bring it down to my group," he says. "Right now we are looking at the areas we want to grow, and we make decisions on how to shift investments from one area to the next based on that plan."

Getting Results

So are banks' strategic efforts to foster organic growth paying off? Research from TowerGroup's Nelsestuen indicates that financial institutions that excel in one-to-one customer experiences will be able to reduce customer attrition and see their asset growth outpace the competition by 30 percent -- representing more than $360 billion in assets.

National City primarily measures its customer management efforts with incremental profitability, according to the bank's Oschmann. It also uses the metric of balance change. "Underlying it all is fundamental improvement in profitability in households," Oschmann says. "In terms of retention, we saw very strong results in test versus control. ... It's improving [by] about a third." To take National City's strategy to the next level, Oschmann notes, the bank plans to improve channel synchronization, including online banking, ATMs and intelligent call routing.

Credit Suisse maintains a central group that monitors its organic growth initiative. The organization currently is building systems to measure the success of the new strategy, according to the bank's Cushmaro. Although the initiative is at an early stage, he says, the bank already has seen an increase in business opportunities related to referrals from the private bank and a pickup on business activity as a result of one-to-one marketing.

"We started to up our game in how we deal with clients and use technology about a year ago," Cushmaro says. "I think we have another good year left to improve the environment. The third year is going to be much more about improving our internal procedures."

"We want client information that is the best in the industry," Cushmaro adds. "This is the main tool that we use to improve our revenue, service our clients better and operate at a higher level."


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