RSS FeedBy M. Isi Eromosele
A major implementation challenge for banks worldwide is the integration of product departments across the organization. Most banks still operate in a "silo design", with each product line operating independently in an attempt to maximize sales. The integration of retail and investment products across the organization is crucial to a profitable strategy.
Product Design
Banks must offer products designed specifically for their target segments to leverage existing customer relationships and bank channels. For the mass market, this means offering retail and investment products that can be easily understood by consumers and easily sold by the bank through multiple channels.
For the affluent market, banks must introduce asset management accounts that combine checking, investing and brokerage into one account. This account can be extended to include insurance coverage.
Sales Model
Both generalist and sales models are effective in retail and investments. The generalist model allows banks to realize two primary benefits: superior economics and product integration. A generalist sales force can result in lower compensation costs, higher productivity and reduced administrative costs.
A sales model could be made up of a specialist team. This team might include experts in banking, brokerage, mortgage, trusts and insurance, coordinated by a relationship manager. This model has proven to be very successful in deepening relationships with affluent families, but it also typically generates higher costs and presents significant training and coordination challenges.
Distribution Challenges
Multiple distribution channels- branches, phone banking, Internet banking and direct mail - constitute a competitive advantage banks have over their non-bank competitors. The branch network is perhaps the greatest untapped advantage banks have in selling investment and retail products - products that are sold face-to-face more than 70% of the time. While customers still open investment accounts and buy insurance in person, they increasingly transact and expect services from other channels.
Support Systems
Integrating support systems is one of the biggest challenges global banks face in introducing retail and investment products into their customer relationships. The implementation of relational databases that track a customer’s relationship across all products and channels will considerably increase the bank’s ability to cross sell retail and investment products effectively. Additionally, expert advice must be available to support generalist sales staff and systems should be coordinated to produce a consistently excellent customer experience across product and service lines.
Human Capital Management
Finding, developing and retaining customer service and financial sales professionals has been a major challenge for global banks. For the mass market, the challenge is to improve branch and Internet sales. For the affluent market, most banks need to hire and train high caliber investment planners to meet customer demands.
Developing an in-house expertise requires a willingness to spend time and funds necessary to train individuals in non-traditional products. Evaluating personnel for appropriate skills and abilities is a necessary component for re-engineering the sales and delivery process.
Banks need to realign human capital resource practices to support a sales culture that is oriented more towards delivering financial advice and a long term profitable customer relationship than simply completing transactions.
M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance
Copyright Control © 2011 Oseme Group
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