The banking sector recently made big headlines for the wrong reasons - 4 banks collapsed in 4 months, triggering fears of a major crisis not seen after 2008. The demise of the banks has made customers nervous and resulted in an environment of uncertainty. Regaining the trust of the clients requires management of risks in a proper manner, and more importantly, effective communication of the steps being taken to prevent trouble.
Many banks, especially those that are more vulnerable to external factors such as increasing interest rates, are likely to face serious problems in raising funds. This, in turn, badly affects their liquidity causing panic among anxious depositors.
While the issues over the last few months had more to do with shattered confidence in the banking sector than an absence of inherent strength, many clients are not aware of the actual reason; they are only interested in the coverage provided by the Federal Deposit Insurance Corporation (FDIC) or taking their money out to overcome the effects of a volatile banking landscape.
So, how can your bank reassure its clients that their money is safe? What does it take to win back the trust and confidence of customers? You need to use cutting-edge technology to communicate with all stakeholders in real time and leverage solid business data to allay their concerns. Let us see how.
Ensure High Levels of Transparency
Transparency plays a key role in handling a crisis deftly, enabling your bank to manage risk effectively. When things go on as usual, make an effort to learn about your stakeholders. Personalize your business interactions with stakeholders to strengthen your customer relationships and earn their deep trust to retain your clients in challenging times.
Make the best use of your Customer Relationship Management (CRM) system to leverage data about each of your clients to gain a complete understanding of his needs and how you can communicate with him with high efficacy. This will go a long way in providing the right response in a timely manner during a crisis. A big picture of your customers helps you segment them efficiently, identify those who are likely to be at risk (such as venture capital firms, in the case of Silicon Valley Bank) and reassure them they have got nothing to worry about.
By making your business operations transparent, you can also educate your clients on volatile conditions in the banking sector and instill confidence in them everything is fine.
Make the Best Use of Analytics to Manage Risk
As we have seen, laying a strong focus on cementing relationships with customers helps you retain business with them. But that is only one element of risk management. You can utilize your CRM data to create different segments of clients and closely monitor their customer journeys. This will go a long way in identifying potential problems and enable you to resolve them well in time.
Proper use of information and technology will allow you to deal with risks and relationships in an effective manner. By creating a single, fully-integrated client data management platform, you can get a 360-degree view of each customer. This will help you ensure your banking business thrives.
You can use state-of-the-art analytics software to accurately predict client attrition rates and flows of deposits by each customer segment; this will help you determine if your clients will withdraw their money en masse causing your bank to collapse.
Analytics tools can provide a bird’s eye view of the impact on customer portfolios and financial plans, allowing you to determine how they are likely to evolve and assess changes in volumes. This, in turn, will help you identify whether any retention problems will occur.
You can also pinpoint risks pertaining to credit, interest rate fluctuations and concentration of business very precisely -- and come up with suitable mitigation strategies. A unified data system will make it easy to track these important metrics and manage risks well.
Utilize Technology to Communicate Effectively
Ensuring agile operations enables your bank to take swift actions and make faster decisions in times of volatility. It’s better to avoid a myriad of systems as this can lead to confusion and problems in sharing information, which lead to poor decisions - exactly the things you don’t want during a crisis.
When you foster a culture that revolves around data and provide all required information at a single location, you can easily connect different teams and customer conversations. You can also share knowledge faster and enable sound, data-backed decisions.
Centralization of business processes and communication plays a key role in enhancing the efficacy of automated workflows and provide faster resolution of customer complaints. In times of a crisis, the right technological tools help your team to exchange information and take stock of the situation. Needless to say, this will allow the team to chart out a suitable course of action.
As you can see, using technology effectively helps your banking organization manage risk and win the trust of its clientele. At Solunus, we help you utilize cutting-edge Salesforce applications to harness the immense potential of customer and marketing data to mitigate risk and reach your revenue goals. Our team of technology veterans has enabled banks and other financial institutions of all sizes to make the best use of Salesforce to achieve rapid growth. This rich experience coupled with our strong focus on understanding your specific business requirements allows us to deliver the perfect solution to the needs.
Hope you liked this post. How do you handle risks in your banking business and gain the trust of your customers? We’d like to know.
Solunus is a leading Salesforce consulting company, based in Dallas, TX, USA. Our proven ‘needs-first’ approach coupled with our unrivaled expertise of the Salesforce platform enables us to provide the perfect solution to help you deliver delightful services to customers and achieve rapid growth.