Throwback Thursday: The Myth of the Customer Record

So way back in February, 2015 we posted a blog on why the customer record in Banking doesn’t really exist. And, what followed was incredible conversations with people from all across Financial Services.

In short? It hit a chord. And frankly, what was true more than a year ago remains true today.

The concept of a record of all customer information converged in one place? It’s a myth in far too many organizations…even outside of Financial Services!

So, I hope you’ll read and enjoy this Throwback Thursday piece, “The Myth of the Customer Record in Banking.”

Zach Messler

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The idea of a complete customer record is simple. It’s all information about a customer converged in one place, available when needed to make better decisions and take better action. There’s even a banking industry term for it – Customer Information File or CIF. But, ironically, the idea of the customer record in banking is largely a myth.

Many things prevent that unified customer view. In our experience, the ones that consistently come up? Silos, systems, and mergers…and they’re all interrelated. Do any of these sound familiar?

  • Information organized by products, not customers
  • Different systems for different business units
  • Completely separate IT systems running in parallel for a short (or long) time
  • New system upgrades that require “rip and replace” that break prior integrations

There are traditionally two approaches financial services institutions take to have a complete unified customer view.

The first? A single, mega information system for everything. The challenge? It’s practical only for smaller institutions. Even then, those institutions usually find they must modify their own practices and procedures to fit the way the software works!  Getting the software vendor to make changes to accommodate unique practices? Too expensive or just not realistic, despite all the promises made by the software salesperson.

The second approach? Lots of integration projects. In taking this path, IT teams connect disparate (and ever-changing) systems so they can appear to function as one unified system to the end user. The challenge?  Complexity.  Ask anyone in IT across any industry. Getting lots of different applications and systems to work together seamlessly is really difficult. These projects need massive time and resource allocation. They are never quick fixes and often get backlogged as higher priorities emerge.

Here’s the thing. Neither approach solves the problem for banks, no matter their size. Especially for larger financial institutions though, true insight into customer interactions, behaviors, and other data becomes next to impossible, if for no other reason than the massive amount of data that is captured and managed across many, many systems. And, considering the number of products, relationship touch points, and other variables, the unified record is especially challenging for commercial banking. At best, it’s embarrassing when clients know much more about their relationships with their bank than customer-facing staff. At worst? The threat of customer defection looms large.

Almost all large financial institutions struggle with these problems. And because of that, for the leaders a unified customer record represents a big opportunity to expand the lead. For the smaller players or less respected brands, it’s a chance to dramatically improve customer interactions and engagement and steal market share.

Think about what a truly unified customer record could mean. It’s easy to see how immediate access to relevant information detail on customer interactions, right at the moment they are needed could make a hugely positive impact, no matter the business.

So how can you get there?

Download the paper, The Mythical Customer Record in Commercial Banking, and learn more.