This time of the year is significant not only because of the never-ending amount of Christmas log cakes (or puddings) that we guiltily consume without restraint at our offices, it is also when we sit together to talk about everything that has transpired in the past year. As we go into the festivities over the next few days, this is the time for us to pause and reflect on the things that have gone well, and those that haven’t quite gotten to the stage of being ideal.
For the financial services sector in particular, this means taking stock of your digital transformation journey by evaluating your progress in digital banking in the age of the customer.
At Forrester, we have done extensive research that involved speaking to incumbent banks globally and leveraging our consumer technographics data for our digital banking strategy playbook. We have recently published the digital banking strategic plan, processes, and benchmark chapters.
For our performance management chapter specifically, we found that although digital banking strategy executives depend on measurement to justify digital initiatives, many banks fail to effectively and meaningfully measure the impact of digital banking on wider business objectives. Typical digital banking KPIs are often product-focused or channel-siloed, rather than business-focused, and do not encourage cross-functional collaboration. That’s because banks, which have been organized along channel and product lines for decades, struggle to break free of siloed metrics.
It’s extremely important that banks today develop cross-touchpoint metrics because your customers today interact with you from a variety of touchpoints and expect great experiences as they move across touchpoints. Metrics like app downloads or website conversion rates fail to capture cross-touchpoint interactions and fail to deliver insights into how customers think and behave across touchpoints. The increasing number of customer touchpoints only complicates this picture.
Therefore, digital banking teams need to hit the reset button on digital banking metrics. Building the case to justify further investment in digital is crucial and depends on having the right metrics in place. For a start, digital banking teams must:
- Link metrics to business outcomes. Some banks put a huge focus on mobile app downloads and how long customers spend within the app although the link between these metrics and achieving business objectives is tenuous. Instead, digital banking teams should focus on digital metrics that connect to broader business objectives, like improving the bank’s cost-income ratio.
- Adopt customer-obsessed metrics. Customer-focused metrics like customer satisfaction, customer experience index and customer lifetime value help create alignment and encourage collaboration between siloed teams toward a shared goal. However, this requires banks to accumulate data from across the entire orgnaization, which is a Herculean task when data is managed and tracked independently in silos along product lines.
Long-term success in digital banking strategy requires measurement to be baked into the entire process. As Peter Drucker, the modern management pioneer, put it, “What gets measured gets improved.” Digital banking teams are in a unique position to spearhead cross-touchpoint metrics because they are the bridge between business units and technology teams. To find out more about the five steps that digital banking leaders should take to improve digital banking performance management, please read our Establish Customer-Centric Metrics For Digital Banking report.
And here’s to a new year of new and improved metrics; happy holidays and Merry Christmas!