How Misys’ customer-centric strategy helped land and retain 48 of the top 50 banks

Technology vendors selling to banks have a special problem: The customer pool is pretty limited. In this environment, retention and references are vital.

Three years ago, Misys, a global software provider for banks, realized it was losing about $50 million because of lack of reference. . Now, after launching a company-wide project to focus on customers, in the last 24 month references contributed to a total of $200M pipeline. The bank counts 48 out of the top 50 banks as clients.

“When I joined Misys, I was looking how we treated the customer along the lifecycle,” said Martin Häring, CMO of Misys. For almost two decades, he explained, the NPS was the primary measurement of customer loyalty. However, that score is driven mostly by the last interaction the customer had and does not indicate the overall health of the customer relationship. The result is lost accounts and an inability to effectively manage the customer relationship.

The alternative, which London-based Misys branded as the Customer Health Index, breaks the customer relationship into a 10 step journey spanning from awareness to advocacy, with 3 customer-focused KPIs for each step. The company collects data from different departments in near real time and aggregates it to give decision makers a wide and deep view of the customer lifecycle.

Traditionally, different departments might come up with their own KPIs, like fixes to software bugs reported by customers. But those KPIs might not be aligned with those of the other departments. The demand to boil down each department’s goals to only three customer-centric KPIs, visible to all executives, ensures that the entire company is working together towards the goals of increased customer satisfaction, advocacy, and referrals.

In addition to the Customer Health Index, the company launched Misys Connect, a hub that helps customer-facing staff drive the conversation at each of the 10 steps in the lifecycle, with easy access to different marketing and communication materials.

Getting internal buy-in was very easy, Häring explained. It was enough just to point out the lost business as a consequence of not using such a program. The first 18 months of the project were spent ramping up the Misys Connect program. The 12 months after that were spent introducing the company to the idea of measuring the customer health across the lifecycle, making sure the processes and IT were in place to calculate and analyze the CHI in real time. The next stage will be to survey current clients to see whether the internal indicators of customer health match the client’s perspective.

“A lot of companies are very vocal about customer centricity,” Häring concluded. “But when you ask them ‘how do you measure success’ and ‘do you have a system in place to predict customer health going forward’, a lot fall flat. A lot of vendors and banks do not make use of the data they have already in their system to improve customer service.”

The long, slow journey towards true customer-centric banking

Banks are working to improve their customer experience. The future of banking will be more than just a digital facelift and will include proactive use of consumer data and cognitive computing to sell to and service the customer.

Banking executives report that customer experience and mobile banking are the main drivers behind software investments they plan to make during the next 18 months, according to The State of Retail Banking 2016. Consumers, on their part, are giving banks higher grades on customer experience, according to Capgemini’s World Retail Banking Report 2016

Is that enough? According to Capgemini, even with the increase in customer experience satisfaction, profitable customer behavior increased only marginally.

With the advance of cognitive computing and analytics, banks have the opportunity to deepen their relationship with customers and drive more profits.

“A lot of banking CMOs are giving lip service to digital banking,”said Martin Häring, CMO of Misys, a banking software company. “Many banks say ‘we are customer-centric’, but in effect they are not.”

Häring envisions a world in which banks leverage transactional, behavioral and even location data to touch the customer with the right message at the right time, and proactively help the customer take control over his financial decisions.

Banks can use data to predict customer needs and proactively cross-sell products in a way the customer will appreciate. For example, software can warn a customer his expenses are higher this month, or perhaps, if expenses are lower, offer a deal on a product the customer needs, based on his purchase history.  

“What we we think of as digital banking today is actually just digitized banking,” explains Jason Bates of 11FS in a blog post. “In the same way that putting a copy of a newspaper onto an iPad is not digital news, selling albums on iTunes is not digital music, and getting fast access to taxi numbers is not digital transportation, looking at a digital copy of your paper statement and account balance on your iPhone just doesn’t cut it any more.”

Banks face many challenges in developing new products, like aging core banking systems and data or organizational silos that restrict innovation. That’s not to say nothing is being done. Efforts to launch customer-centric product are underway.

Though some banks will try to develop next generation banking apps in-house, most will turn to partnering with startups and leveraging open APIs to provide a truly personalized customer experience that empowers users.

Banks will turn to companies like Misys or Strands to power their personalization efforts. Other companies, such as Ayasdi, or IBM’s Watson, provide banks with AI or cognitive computing abilities that can better leverage consumer data.

It took newspaper almost two decades to move from online text and photos to a full digital experience that includes interactives, video and infographics. Similarly, even with some experiments in customer-centric banking, it will take banks some time to fully deliver on the promise of digital banking.


Photo via Visualhunt