FINANCIAL SERVICES MARKETING

Changes Impacting Marketing in the Financial Services Sector

The recent past has witnessed a variety of changes. One that has affected the financial services sector most significantly has, of course, been the capital market crash. That apart, there have been many other changes relating to technology, customer expectations, and so on. This article takes a look at some of these changes and how they have impacted marketing in the financial services sector.

Over the last one and a half years, people across the globe have felt the impact of the economic downturn in one way or the other, resulting in significant changes in living and working conditions, relationships, leisure time, etc. This is basically a testing time for the human community at large. It is a time of transition, and a time of struggle; and one of seeking the path to recovery and growth.

There is a famous stock exchange maxim - "No one was ever ruined by taking a profit." This is quite true. However, one should also give a thought about the changes that were behind the earnings of those profits. The financial sector landscape of our country has altered substantially during the past decade, beginning with the reforms initiated during the 1990s. These reforms have undeniably opened up the constituent segments to competition and liberalized operations, making marketing their life blood.

The integration of Indian financial markets with the global markets is now well-established. The earlier growth trend, last year's downturn and the current upward movement of the Indian capital markets have completely defied the well-established historical pattern, and stand in evidence of the enmeshing of the domestic and global markets. In fact, going further, it could be said that the Indian financial system enjoys some kind of a "best of both worlds" advantage.

At this juncture, we should all understand that out of every life situation, no matter how bad things get, there is good that comes our way. Therefore, one should anticipate changes rather than dread them. One has to look for ways of making life better and look forward to economic recovery, rather than give in to bitterness.

Enhancing Business Competitiveness

The efforts to increase profitability without simultaneous improvement in one's competitiveness will lead us nowhere. With increasing economic globalization, intensifying interdependence, technological advancements, and growing competition in the market in both domestic and international spheres, there is an unprecedented need for us to find strategies to remain competitive. This is imperative for ensuring sustainable growth, continuous productivity and enhancing the balance among people, processes and possessions.

Going on further, there is a cyclical linkage between life-long learning and employability, employability and business competitiveness, business competitiveness and profitability, profitability and life-long learning. In a nutshell, business competitiveness is extremely important for realizing one's potential in the knowledge-driven economy (Exhibit 1).

Laying the Path to the Customer's Heart

No doubt, competition is one of the major challenges of the new millennium. To become the No.1 is always an easier task in comparison to staying there forever, as the latter requires continued innovation and competitive advantage. Strategic theorists argue that competitive advantage lies in acquisition and protection of singular knowledge. However, this static perspective of gaining competitive advantage relies on the ability to find short cuts to beat the competitors, while maintaining legitimacy. This should, no doubt, form the core of every strategy designed to overcome the competition and continue on the path to success.

During good times, when people have the resources, customers do come to one's doorstep seeking various services. However, the new order also means that every one has to take responsibility in taking the organization forward. One has to acquire and develop a broad range of skills/products/services and update these continuously in harmony with market demands. The bottom line is that one has to own the processes and products to improve service quality and achieve customer delight (Exhibit 2).

Customer Driven Change - Contact Center in a Financial Services Organization

With the advent of ITES/BPO, contact centers have become the main feature for organizations serving offshore clients/customers. However, contact centers have been part of the financial services industry since much earlier. While a representative board line was there, it was simply viewed as a channel for receiving customer requests, as against perceiving and pursuing it as a proactive tool for winning the customers' heart. It was rarely viewed as a profit-center. Rather, it was run as a cost-center on a slim budget.

However, one particular event triggered a major transformation. It was in the year 2006 that a financial services giant serving 60 million investors was taken by shock and its continuity in business was in a peril due to oversight on `Know Your Client' (KYC) norms. Consequent to the same, the company had to lose business to the tune of Rs. 2 cr per month for a period of one year. This led to the need for periodic interactions with existing customers, enhanced marketing efforts to make good the losses during the following financial year, and acquisition of new clients.

While personal interactions continued to be a reliable source for boosting sales through cross-selling and up-selling of products and services, the organization explored other ways of running cost-efficient operations. In the process, it zeroed in on the idea of running a virtual sales network that would result in increased productivity and transparency in its processes, while serving as an effective means for being in touch with the customers. This idea translated into the establishment of a commercial contact center, which was considered a key instrument in changing investors' perception about the company, building an impressive customer experience/service culture and driving the business goals of the company as a whole.

By implication, the service objectives accomplished by the contact center were:

 Cross-selling and up-selling

 Increased productivity and transparency

 Positive customer experience.

Strategies for Success in Response to Change

Cross-Channel Interactions

These include - phone, fax, e-mail, Short Messaging Services (SMS) and websites/chat, etc., thereby enabling investors to transact business as and when they want. Offering superior channel interactions also allow investors to use the channel of ease, thereby increasing the chances to differentiate one's product/service portfolio, deliver personalized services and ensure cross-selling/up-selling cost-effectively. Thus, a seamless experience to the investor across all channels ensures that interactions are consistent and efficient, thereby laying the foundation for strengthening the relationship with the investor.

 Example

For example, a system of handling all IPO/Demat/trading account-related requests predominantly through phone; retail investment inquiries relating to mutual funds, insurance, fixed deposits, etc., through online application; tax planning services through web chat; application status check through SMS, dedicated lines/contact points to institutional clients, etc., can be formalized.

Knowledgeable Doorway

It is very unlikely that customers would like going through a long menu tree offered by the automated Interactive Voice Response (IVR) system, which often leads to frustration for the investor. The product/service-specific interaction channels, referred to above, serve as an effective alternative to meet the specific needs of the investor. This approach also gives the representative the time to update himself with the information relevant to the product/service the investor is looking for, thus making the interaction with the prospective client more knowledgeable and prompt. This, in turn, builds confidence in the service provider on the part of the investor.

 Example

An investor who has applied for a Demat Account would like to check the status as to whether it is processed. In such a case, the investor sends an SMS by typing DEMAT space <ref. no.> to the designated number. Such requests are routed to the team handling the specific product/service for responding to the investor via SMS and updating the processing of the account.

Platform Integrations Between Back Office and Contact Center

The integration of back-office data with the contact center enables the service provider to resolve investor queries quickly and effectively. Thus, reduced turnaround time will provide greater comfort to the investor in terms of being better heard and informed.

 Example

In the specific case referred above, the reference number serves as the primary key for retrieving information pertaining to the investor, thereby displaying the required information on the employee's computer monitor. This reduces the turnaround time of manually navigating through the system to locate the information relating to the particular investor.

Wiring the Web for Self-Service

Web self-service facilitates the process of allowing investors to interact with the representatives of the service provider at any time, irrespective of the day of the week/working hours. This scales up customer service and helps the service provider to focus on the sales activity, rather than spending time responding to operational queries. Integrating self-service with the web agent allows investors to interact in a convenient way and, at the same time, gives them the same personalized advisory service offered by the contact center.

 Example

The snapshot of a web-chat (Exhibit 3) shows an employee of a company in conversation with the service provider to learn about medical coverage related to his treatment.

Improved Call Handling for Preferred Investors

It is very important for the service provider to show higher quality in handling institutional (preferred) investors based on their investment levels, as compared to retail investors. Institutional clients expect higher levels of maturity by the service agent/employee in dealing with their queries/investment requirements. As such, it is necessary that the service requirements of such investor community are met in an efficient manner through skill-based routing, shortest possible virtual hold and business priority. In such cases, the facility of call pick-ups (service provider calls back the investor) enables the service provider to have a sufficient breather to understand the objectives of the investors and the products/services they are looking for. At the same time, it also helps the service provider to market the products/services to meet their additional needs. This provides the customer a feeling of being identified as a valued investor, thereby impressing institutional customers to do repeated business with the service provider.

 Example

In the case of IPOs, when applications are received in large volumes, the `call pick-up' service helps in focusing on institutional clients by calling them at their convenience; and this is in compliance with the criterion set for call response times. It also helps to improve service satisfaction levels, without additional resources or costs.

Opportunities for Cross-Selling and Up-Selling

It is obvious that investors knock the doors of the service provider only when they are in need of a service relating to investments. If the service provider initiates proactive contact with the investor at this stage, it facilitates cross-selling and up-selling. This also provides the service team a background for pitching various products/services to the investor in the future.

 Example

Sending a thank you message to the investor's mobile/e-mail for the business done leaves a mark on the service culture of the service provider. Further, proactive interactions in the form of wishing the investors on special occasions such as birthday, children's birthdays, wedding anniversary, etc., will make them feel elated, as these stand out as examples that the service provider cares for little things that matter to the investor. After such initiatives, it becomes easy for the service provider to sell additional financial products or services, covering the investor's children/family at large.

Effective Investor Segmentation

Human beings tend to be comfortable when they are in the midst of their own community. Therefore, it is important to anticipate investors' future needs and segment customers based on systematic data, rather than mass market the products and services. Demographic matching is one way by which the service provider may assign the investor to a sales team member who has a similar demographic profile. This creates a non-apprehensive environment for the investors to interact with the service agent, as they will be able to readily relate with their commonalities such as language, age group, life stage, etc., thus understanding the expectations of the investors. Customizing the guidance right from the very stage of routing the request will provide an edge in facilitating the further business processes. This also speaks volumes about the expertise that the service provider has in providing financial solutions relevant to the investor's requirement.

 Example

An investor inquiring about a retirement planning product may be directed to the service agent who deals with the sale of insurance policies specific to retirement planning. Similar should be the routing of requests received regarding planning of children's education, etc.

Optimization of Business Process Execution

Investor - service provider interactions usually involve multi-step business processes, which may also include multiple contacts between the investor, service provider and third parties. In such cases, the contact center may be groomed as the communications hub of the organization that helps in delivering end-to-end business processes supporting the communications, thereby enhancing business efficiency.

 Example

An investor approaching the service provider for offshore travel insurance serves as the gateway for forex business. Such leads, if routed to the appropriate service provider (whether in-house or an external tie-up with the organization), can help enhance the sources of revenue, besides boosting business relationships.

Virtualization of the Contact Center

Regardless of location, the investor calls the contact center of the service provider. This arrangement enables the geographically dispersed sales team to operate as one, thereby ensuring investors access to the required expertise with quick response cycles. Engaging the investors in such a manner, instead of keeping them glued to the busy connecting lines, will make their business experience a more pleasant one.

 Example

An investor from Delhi dials the contact center and queries about his service needs. Based on the availability of free lines, the call is routed to the Hyderabad office. The service representative speaks to the investor to understand his requirement and accordingly connects the caller to the respective local service agent at Delhi.

Blending Interactions Increase Productivity

Call blending is based on identifying the nature of service and sales response required as either call-based or skill-based. It allows the service provider to offer the required assistance through appropriate channels of interaction, such as through e-mail, web chat, etc., in addition to telephonic conversations. Such interaction blending helps in driving away the monotony faced by call center personnel, thereby helping in sustaining their performance.

Measuring Productivity, Performance and Profits

The objective of employee assessment (Exhibit 4) should be to review and evaluate performance, identify further opportunities for improvement, track the statistics (quantitative and qualitative aspects of the performance), and realign the contact center's strategies to ensure that the inspiration for serving the investor is continued to be nurtured.

Customer and Change

The goal should be to pool one's collective wisdom through the exchange of views and experiences in order to identify the ways and means that are best suited to given situations. It is then for the sales and service team members to question themselves and turn the ideas discussed into reality in their respective work spheres.

These are times for us to grow, reap the rewards for all the work we have put into reading, attending meetings, and deliberating. These are the times to let our faith grow even stronger. As such, it is the time for all of us to re-evaluate priorities and recovery goals. May be, it is also the time for us to sit up, pay closer attention to our needs, and take better care of the community at large.

This is a time, characterized by continuous changes with the changing expectations of each customer; and it keeps us on a continuous move on the `high tide of change'. It is solely because of customers that we were able to surf the highs and lows of the business cycle.

Customers and Change complement each other, and service marketers have to be ever ready to respond to them in the appropriate manner. Customer and Change are the only constants of our life, no matter how big or small they are.

Every customer's heart needs your constant care. It needs the salt - it needs a sense of duty, to keep it from spoiling!

-- Shankar Anappindi
Manager - HR, 
Karvy Group, Hyderabad.
The author can be reached at 
shankar@karvy.com

-- M S Manohar 
Group Head & Vice President (HR), 
Karvy Group, Hyderabad.
The author can be reached at 
manohar@karvy.com