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The digital transformation and online networking have changed customer behaviour. Companies that underestimate these changes will quickly become irrelevant in the marketplace.

The rapid spread of smartphones in particular has produced customers who are more mobile and better informed than ever. Interactions between customers and companies are changing, with parts of the customer journey shifting to digital channels. Customers research, compare, and shop both onand offline. The boundary between online and offline is becoming blurred. At the same time, the Internet is creating market transparency. Information asymmetries between providers and customers are being eroded, ultimately leading to a power shift in favour of the customer.


Personal advice remains important

 However, advice is still an important factor in purchase decisions, because customers look for personal contact especially when they are faced with complex and emotional issues. At the same time, customers are seeking ever greater mobility and flexibility. They expect to be able to control interactions with companies on an individualised, context-dependent basis. Customers take self-service options for granted but want to spend as little time as possible using them. So the services need to be easy to use, reasonably self-explanatory, and seamlessly expandable with additional channels such as personal advice.

The digital transformation holds the promise of additional benefits for customers in the form of innovations and personalised offers. This is opening up new opportunities for companies to position themselves with new products, services, and business models. The key factor for success is to create an excellent customer experience in line with customer needs. This is also the greatest challenge.


Learning from Internet companies

Companies that have mastered this discipline include Google and Amazon. They manage to systematically record and analyse customer expectations and transform them into real services that are in line with customer needs. For them, new technologies are one means to the end of creating better services to meet customer needs. They achieve their success by rigorously simplifying their processes or by offering customers easier access to the company. They also address customer needs that are not covered by the company’s own services. This rigorous focus on customer needs allows these companies to strengthen their power position at the customer interface.

Services like these also change customer expectations of other companies and industries. What does this mean for banks in Switzerland? While e-banking is hugely popular in Switzerland, take-up of new digital services has failed to meet expectations in many cases, as is evidenced by Twint and Samsung Pay.

UK start-up Revolut is proving that it is still possible to attract customers using digital services, even in Switzerland. By its own account, the company has managed to gain over 50,000 customers within two years – without advertising – by offering a smartphone-based product. Aside from attractive pricing, Revolut offers a bundle of products and services tailored to the needs of digitally savvy customers. Many of these involve cooperation with partners, because the central focus is the relationship with the customer and its mission to meet the needs of its target group.


Customer needs must be the central focus

Unlike Revolut, the established Swiss banks are confronted with the challenge of an existing and therefore heterogeneous customer base. In order to reconcile the sometimes divergent customer needs, banks will have to focus squarely on customers and their expectations. The following five points are worth considering:

  1. All the old ideas about segmentation should be thrown away. There needs to be segmentation based on customer behaviour in order to recognise customer needs at an early stage and address customers in a more individualised, personal, and proactive way.
  2. The bank can use its knowledge of its customers proactively to approach customers with relevant information and thereby increase customer loyalty and engagement. This will cement the bank’s position as a partner and the advisor’s role as a supporter and enabler.
  3. Designing products exclusively from a product- and service- oriented perspective is an obsolete approach. Customers are not looking for bank products; they are looking for a solution to a problem they are currently facing, such as buying a home. The product has to be designed to meet these needs.
  4. A true requirement-based offering extends beyond the bank’s core services and covers additional aspects on the customer journey. Partnerships and third-party providers can provide added value throughout the customer journey.
  5. Financial institutions must also ensure that customers can access processes and products anytime, anywhere by making them seamlessly available across all channels. For this to work, advisors and customers must have access to an identical view of information and data.


A dialogue with customers

Customer needs are constantly changing. Companies must be in a position to anticipate these changes and react to them quickly and efficiently. They need to have the courage to forge new paths and enter into a dialogue with customers about their wants and experiences. In this context, data analysis is becoming increasingly important as the foundation underpinning this shift. Experiments and surveys can also be used to measure behaviours and obtain customer feedback. For traditional, risk-averse companies, such as banks, this will require both a cultural change and a flexible, reactive organisation. Successful companies will actively seek out opportunities to create a good customer experience and will be willing to learn from their own experience and, sometimes, their mistakes.