Banks will lose when not changing their perspective on how to realise customer centricity

Don’t get us wrong, Innopay values clients as much as anyone else. Hence, we fully comprehend the urgency that is felt throughout the sector to become more customer centric. However, from experience we know that most existing operating models are so much intertwined with the DNA of traditional banks that it has proven to be nearly impossible to completely renew, unless you are willing to go through a long, disrupting and very uncertain transformation. Therefore, where most conventional consultants recommend banks to start with defining the customer journey, Innopay suggests to start with establishing an activity-based view of the existing operating model.

We have learned from experience that this pragmatic approach provides management and employees an agreed view on how the organisation really works, how it creates value and how everyone contributes - directly or indirectly - to customer facing teams and their clients as opposed to the disjointed functional or process representations of organisations that only deepen the existing siloed mentality. Only then, banks will be able to effectively transform step by step while delivering on both customer and business objectives.

New regulation and rapid digitisation force banks more than ever to focus on their clients. Where in the good old day’s banks may have believed they would be able to outlive these trends, it has become crystal clear that in order to stay relevant, change is needed in the way customers are managed and served.

Policy makers use regulation (PSD2) to accelerate a change in mind-set and openness in the banking industry, redefining the relationship between customer and bank. As a result, start & scale ups introduce, new customer centric business models at a high pace, disintermediating the existing client relationships with banks without being hindered by any legacy infrastructures or complex operating models.

For most banks, owning the primary client relationship has always been key in maintaining a profitable and future proof business. Consequently, banks now spend a lot of time and money on rethinking their customer strategy and execute on it by plotting customer journeys on their existing organisations to make them seamless and digital. At the same time, in support of these efforts, innovation labs and start-ups are embraced and customer facing teams are trained to work agile practically overnight.

Unfortunately, most of these initiatives have not yet resulted in the necessary transformation to a more customer centric bank. The complexity, siloed and closed design of the banks’ existing operating models do not support the customer facing teams in executing the (digital) customer centric strategies in their day-to-day operations. As a result, operational inefficiencies, unclear roles and fragmented client communication have put even further pressure on the primary client relationship of the bank. 

“In many cases, banks' existing business applications are unable to support these changing business needs…..Failure won't deliver application systems that support the business processes needed to win, serve, and retain customers. “Source: Anatomy of A Disaster — Learn From Major Banking Platform Transformation Failures by Forrester, August 15, 2014


It is understood that opening up bank operating models is needed to support a successful customer centric strategy. However, this is an even more time consuming and costly enterprise. A seamless digital experience is a vital element in becoming more customer centric and simplifying the operating model is essential in the long run for banks. To continue defining costly customer journeys as the leading approach, without the support of operational processes, banks may end up losing clients as the customer experience will not improve in the short term.

 “Too often, bankers focus only on how people work rather than on what work they do. Yet one of the biggest sources of cost is complexity” Source: Big, Bold Bank Cost Transformation by Bain and Company, December 20, 2016


Innopay believes that clients will continue to value a relationship with the bank that serves their needs and rightly balances a digital customer journey with a personal and meaningful experience. Therefore, we propose an alternative perspective on how to deploy a customer centric strategy in a complex, siloed and closed organisation and in the meantime safeguard, or even improve the existing client relationships. 

Blog customer centricity Picture1

Figure 1: Evolving to a customer centric bank 

Innopay’s approach is based on three elements that contribute to delivering on a customer centric strategy: business model, operating model and customer experience (see Figure 1 above).

This activity-based Crosslinx© view of the organisation changes the mind set of employees, reduces internal silo thinking and acting, and thus helps existing operating models to open-up. It triggers a virtuous cycle where the three elements complement and reinforce each other, maximising the results of the change initiatives from a customer satisfaction and a profit & loss perspective:

  • Establishing the activity-based view of the existing Operating model enables the organisation to immediately improve its operational performance. This is done by ‘de-cluttering’ the organisation from redundant processes and tools, improving effectiveness of time spent, defining most valuable customer segments, redefining roles & responsibilities and empowering employees to reach across silos. In addition, the Crosslinx Framework can act as the catalyst to successfully deploy customer journeys within the existing organisation;
  • Improved operational performance positively impacts the Customer experience. Banks can increase satisfaction levels by redirecting time spent towards activities more highly valued by the client and deploying effective (digital) customer journeys. To better understand what the client wants, banks should use direct test methods, such as Agile, and implement effective ways to capture the voice of the customer. These lessons learned should be incorporated in the ongoing improvement of the customer journey on for instance topics such as onboarding and account opening;
  • Increased customer satisfaction leads to cost efficiencies (e.g. less calls to support teams) and potential revenue increase (e.g. increased share of wallet) within the existing Business model. Improved business performance will help build confidence in the customer centric strategy and will secure the required funding to evolve to a more open banking model step by step. Those changes then need to be incorporated in the operating model and related customer journeys as part of the virtuous cycle towards the customer centric bank.

The Innopay Crosslinx approach delivers immediate results by unleashing the untapped potential that resides within existing operating models and focuses on initiatives that empower customer facing teams and increase customer satisfaction without disrupting core operating models.

Becoming customer centric, means that banks need to be in it for the long haul and it is therefore imperative to balance long term spend with effective short term results. This is the only way to face competition, deal with regulation and safeguard and sustain your client relationships.

In the next blog, Innopay will further deep dive into the Crosslinx methodology© that drives this approach and framework. If you would like to know more, do not hesitate to contact Esther Groen – Sector Lead Banking & Payments (esther.groen@innopay.com / +31625062034) or Willem Mosterd – Strategy execution Lead (willem.mosterd@innopay.com / +31646407656).

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